Canada Pension Plan (CPP) enhancement
On January 1, 2019, Canadians began contributing more to the Canada Pension Plan. You can claim a deduction for your enhanced contributions to the CPP. Annual contribution rates will rise modestly over seven years. This change helps increase retirement income for working Canadians and their families.
Withdrawals have increased under the Home Buyers’ Plan
The maximum amount you can withdraw from your registered retirement savings plan under the Home Buyers’ Plan increased from $25,000 to $35,000 for withdrawals made after March 19, 2019.
New Temporary Flat-rate Method for Home Office Expenses
You are eligible to use this new method if you worked more than 50% of the time from home for a period of at least four consecutive weeks in 2020 due to the COVID-19 pandemic. You can claim $2 for each day you worked from home during that period plus any additional days you worked at home in 2020 due to the COVID-19 pandemic. The maximum you can claim using the new temporary flat rate method is $400 (200 working days) per individual.
CERB payments will be taxed
CERB will be considered taxable income on recipient’s 2020 tax returns. CERB recipients will receive a T4A from the Canada Revenue Agency on any benefit amount received.
Cannabis as a medical expense
Certain cannabis products bought for a patient for medical purposes are eligible for the medical expense tax credit.
The patient must:
• Be a holder of a medical document as defined in the Cannabis Regulations
• Be registered as a client of the holder of a licence for sale; and
• Make their purchases from the holder of a licence for sale they are registered with.
Digital news subscription expenses
For the 2020 to 2024 tax years, you may be able to claim a non-refundable tax credit for expenses you paid in the year for a digital news subscription with a qualified Canadian journalism organization.
Canada training credit limit
Eligible workers of at least 25 years old and less than 65 years old at the end of 2019 and later years, and who meet certain conditions will accumulate $250 a year, up to a lifetime limit of $5,000 to be used in calculating their Canada Training Credit, a new refundable tax credit available for 2020 and future years.
Published by Elite Accounting Inc.
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