Budget 2016: What Previously Announced Tax Provisions Remain?

If you are confused by the numerous family tax changes over the past couple of years, you are probably not alone.

Here is a summary of the tax preferences you enjoyed in 2015 that didn’t make the cut in the latest federal budget on March 22, 2016. They include:

UCCB - Universal Child Care Benefit. In 2015, this benefit rose to $160/month for children under age 6, and a new benefit of $60/month for children 6-17 was introduced. However, that’s now all been replaced by the new Canada Child Benefit, which will begin in July of 2016. On your 2016 tax return, (that’s the one you’ll file next year), the UCCB will appear for the last time, to account for payments received from January 1 to June 30, 2016, which are taxable.

The Non-Refundable CTC. The Child Tax Credit for minor children was eliminated on the 2015 tax return. Many taxpayers have been looking for it this year, but the only non-refundable amount that can be claimed for minor children on line 367 is if the child is infirm and qualifies for the Family Caregiver Amount. The 2016 budget maintained the status quo and made no further changes to this tax credit.

The Child Care Expense Deduction. In 2015, the maximum claim increased by $1,000 to $8,000 per child under age 7; to $5,000 for each child aged 7 to 16 as well as infirm dependent children over age 16; and to $11,000 for children who are eligible for the Disability Tax Credit. This deduction will be claimed on your 2015 tax return and will continue into 2016 and the foreseeable future.

Family Tax Cut Credit. It’s gone for 2016 and going forward. Make sure you optimize it in the 2014 and 2015 returns. And don’t forget that the pension income-splitting provision is still with us, for those who receive periodic pension income receipts.

Children’s Fitness Tax Credit. This doubled to $1,000 in 2014, and is a refundable credit as of 2015. Eligible parents can claim 15% of expenses for qualifying activities to a maximum of $1000. This credit will be cut in half to a maximum of 15% of $500 in 2016 and will be eliminated for 2017 and future years.

Children’s Arts Amount. The federal credit will be halved in 2016 and eliminated in 2017. Remember that this is a non-refundable credit, so it doesn’t help those who don’t pay federal taxes.

Family Caregiver Relief Benefit and Critical Injury Benefits are now non-taxable to Veterans, as per March 2015 announcements. These provisions remain intact.

Now History however. . .

Donations of Proceeds from the Sale of Private Corporation Shares or Real Estate. The 2015 budget announced that starting in the 2017 tax year, an exemption of the capital gains taxes would have been allowed as well as a charitable donation tax credit to individual donors (with a deduction available to corporate donors) when shares of a private corporation or real estate were sold and proceeds donated to qualified donees within 30 days of the disposition. . Unfortunately, this provision was completely cancelled in the 2016 budget.

Evelyn Jacks is President of Knowledge Bureau and author of 52 books on personal tax preparation and family wealth planning. Her latest is Family Tax Essentials: How to Build a Wealth Purpose with a Tax Strategy available at www.knowledgebureau.com.

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