Tax season is upon us and if you’re like us, you want to know all of the tax changes before sitting down to prepare your tax return.
You can find a great summary of all rates and amounts changed on CRA’s website. We don’t go into detail about all amounts that increased due to inflation, because these generally change every year.
Temporary work-from-home measures:
Government COVID initiatives such as the temporary work-from-home measure of $2/day are no longer available. This simplified deduction was introduced in 2020 and was available until 2022. If you continue to work from home, make sure you get a signed T2200 form and keep track of all your expenses, as you’ll need these to claim your employment expenses.
First Home Savings Account:
A new account was introduced to Canadians, the First Home Savings Account. This new type of savings account allows you to save for your first home and contributions are tax-deductible. If you opened and contributed to one of these accounts, you'll receive a T4FHSA slip.
Advanced Canada Workers Benefit:
Although the Canada Workers Benefit isn’t new, getting payments in advance is new for most Canadians. If you received the Advanced Canada Workers Benefit, you'll receive a tax slip for this. Make sure to report your RC210 on your tax return.
The grocery rebate you may have received in 2023 isn't taxable, you won't receive any tax slip nor do you need to include it anywhere on your tax return.
Property flippers beware, if you sold a home that you owned for less than 12 months, you're considered a property flipper. You won't be able to claim the principal residence exemption on this property and the income will need to be reported as either business income or a taxable capital gain.
Multigenerational home renovation tax credit:
If you have more than one generation in your household, you may be able to claim the new multigenerational home renovation tax credit. Renovations made to your home to make it adaptable can be claimed on your tax return.
Tradesperson’s tools deduction:
Tradespeople, good news! The tradesperson’s tools expenses have increased from $500 to $1000.
CRA interest rates have increased:
Do you have a balance owing? Make sure to pay it on time. CRA's interest rate doubled to 10% on the unpaid tax when the return is due plus 2% for each month the return is late.
Disability tax credit:
The process for claiming the Disability Tax Credit got much easier in 2023. Now you can begin the application in CRA My Account and your doctor also completes their portion online.
Provincial and territorial tax changes
Depending on your province or territory of residence, there may also be other tax changes that you should know about. If you don’t live in one of the provinces or territories below, there aren’t any big tax changes on your provincial forms.
- Charitable donations in Alberta now put more money back in your pocket. The first $200 in donations is now a credit of 60%. This means if you contribute $200, you’ll receive $120 in tax savings compared to $20 last year.
- Renters can now claim rent as a tax credit in 2023. This credit applies to lower income households and helps them with the increasing costs of housing.
BC Clean Buildings credit:
You can claim this refundable tax credit if you paid or incurred expenditures for qualifying retrofits that improve the energy efficiency of eligible commercial buildings and residential buildings with 4 or more units in British Columbia.
- The Ontario staycation tax credit has been eliminated. This temporary measure to boost travel within Ontario was only available in 2022. Sorry Ontarians, you can no longer claim your Ontario vacation as a tax credit in 2023.
- The Ontario seniors’ home safety tax credit has been eliminated.
- Ontario jobs training tax credit is no longer available in 2023.
For a list of all changes in Québec, visit their website.
- Good news Québecers, you’re paying less income tax to Québec in 2023. The first two tax brackets saw decreased tax rates of 1%; the first tax rate decreased to 14% from 15% and the second bracket decreased to 19% from 20%. This means if you earned $98,540, you saved more than $800 in taxes. Your tax credits are worth a little less due to the decrease in tax rates but overall a decrease in tax rates is good news.
- The tax credit for seniors’ activities has been eliminated in 2023.
- If you owe more than $10,000 on your tax return, you’ll need to pay that either online or through a financial institution.
- The Yukon Business Carbon Price Rebate now includes both the Yukon general business carbon price rebate and the new Yukon mining business carbon price rebate.