It’s Official: April 15 Federal Budget Receives Royal Assent

Royal Assent was given on June 24, 2015, for the measures announced in the April 21 federal budget, thereby officially legislating the Economic Action Plan 2015 Act, No.1.

Among the changes that now take full effect are the following:

For Families:

• For 2014 and future years:  Introduction of the Family Tax Cut, effectively allowing a higher-income spouse to transfer up to $50,000 of taxable income to a spouse in a lower tax bracket.

• Starting January 1, 2015:  Increase in the Universal Child Care Benefit (UCCB) for children under 6, from $100 per month per child to $160 together with an expansion of the UCCB to include a benefit of $60 per month for each child aged 6 through 17, effective January 1, 2015.

• For 2015 tax year:  Increase in the Child Care Expense Deduction dollar limits by $1,000. The maximum amounts that can be claimed will increase to $8,000 from $7,000 for children under age 7, to $5,000 from $4,000 for children aged 7 through 16, and to $11,000 from $10,000 for children who are eligible for the Disability Tax Credit (DTC).

For Investors:

• For 2015 and future years:  Increased annual TFSA contribution limit, from $5,500 to $10,000, but with no indexing to this maximum amount.

For Retirees:

• For 2015 and future years:  Reduction in the minimum withdrawal factors for RRIFs, allowing seniors to preserve their wealth for longer in retirement.

For Caregivers and Their Incapacitated Loved Ones:

• For 2015 and future years:  Introduction of the Home Accessibility Tax Credit for seniors and people with disabilities, to help with costs of renovations that will allow them to stay in their homes and live independently for as long as possible. The maximum credit is $1,500 on up to $10,000 of eligible renovation expenses per year.
• For 2016 and future years:  Extension of the Employment Insurance Compassionate Care Benefits from six weeks to six months to support Canadians caring for gravely ill and dying family members.

For Businesses: 

• Starting in 2016:  A 0.5% reduction in the small business tax rate per year, falling to 9% by 2019.
• Starting January 1, 2016: a 10-year accelerated capital cost allowance for manufacturers.
• As of April 20, 2015: an Increase in the lifetime capital gains exemption for owners of farming and fishing businesses to $1 million.

These topics will be covered in detail, from a Family Business and Year End Planning perspective, at the Distinguished Advisor Workshops, being held in Winnipeg October 28, Calgary October 29, Vancouver October 30 and Toronto on November 2.  An opportunity to save on tuition fees when registering in the fall and January T1 Tax Update is available until October 15. Please call 1-866-953-4769 or register online.