Economic Action Plan - Royal Assent Received

On March 12, 2009, Bill C-10 received Royal Assent, passing some key tax measures for Canadians for both households and businesses alike.  Tax relief in the form of increased basic personal and age amounts and expanded EI benefits form part of the stimulus package provided for in Budget 2009.  Some items of interest that were passed into law under Bill C-10 are as follows:

• In November 2008 the Government proposed that the minimum RRIF required withdrawal be reduced by 25% for the 2008 tax year. With Royal Assent for the bill being received, re-contribution of RRIF withdrawals that are made up until April 11, 2009 are deemed to be made in the year ended December 31, 2008.  For example, if an individual was required to make a $20,000 withdrawal under the current rules then that minimum amount would be reduced to $15,000 under the new rules.  A $5,000 re-contribution to the RRIF account could be made by the taxpayer with respect to the 2008 tax year.  
• Basic personal amount and age amount for 2009 are increased to $10,320 and $6,408 respectively.
• Increase in the upper limits of the two lowest tax brackets from $38,823 to $40,726 and from $77,664 to $81,452 respectively.
• The home renovation tax credit (HRTC) is available for the cost of renovations in excess of $1,000 to a maximum of $10,000 from January 28, 2009 to January 31, 2010.
• Home buyers' tax credit (HBTC) is a new non-refundable tax credit available for first-time home buyers who purchase a qualifying home after January 27, 2009.
• Home buyers' plan now allows for RRSP withdrawals in the amount of $25,000 (up from $20,000).

The Government of Canada has also launched a new website so that the details of Canada's Economic Action Plan can be tracked and, in turn, public officials can be held accountable for action on the economy.