Y2022 has been an incredibly challenging year for most if not all Canadians throughout the country amid rising inflation and high cost of living. The federal and provincial (Ontario) governments have come up with relief programs to provide benefits and aid to combat inflation to individuals and families resident in Canada. Of the several relief measures, the three programs in particular could be beneficial for Canadians who are eligible to avail.
ONE-TIME $500 TOP-UP TO THE CANADA HOUSING BENEFIT
For many Canadians, rising inflation and the high cost of living have made it even more challenging to find a safe and affordable place to call home. Renter households are four times more likely to experience core housing needs than homeowners. That is why the Government of Canada has taken concrete action to help renters who need it most.
This benefit is a one-time payment of $500 to eligible lower-income renters experiencing housing affordability challenges.
Canadians must meet all the following conditions to be eligible for the new benefit:
- have filed a 2021 tax return;
- be at least 15 years of age as of December 1, 2022;
- be a resident in Canada in 2022 for tax purposes;
- have an adjusted family net income of $20,000 or less for individuals, or $35,000 or less for families;
- have paid at least 30% of their 2021 adjusted family net income on rent for their principal residence in the 2022 calendar year; and
- be able to provide their 2022 address(es) and landlord’s contact information.
Eligible applicants can quickly and easily apply for the one-time top-up to the Canada Housing Benefit through their Canada Revenue Agency (CRA) My Account. If applicants are registering for My Account for the first time, they will not need to wait for their security code in the mail; they can still access limited services in My Account and apply for this benefit immediately. Those who apply online and are signed up for direct deposit could receive their one-time top-up within five business days.
CANADA DENTAL BENEFIT
The interim Canada Dental Benefit is intended to help lower dental costs for eligible families earning less than $90,000 per year. Parents and guardians can apply if the child receiving dental care is under 12 years old and does not have access to a private dental insurance plan.
Depending on your adjusted family net income, a tax-free payment of $260, $390, or $650 is available for each eligible child. This interim dental benefit is only available for 2 periods. You can get a maximum of 2 payments for each eligible child. Benefit payments are administered by the Canada Revenue Agency (CRA).
The first benefit period is for children under 12 years old as of December 1, 2022 who receive dental care between October 1, 2022 and June 30, 2023.
Eligibility criteria
For dental care services your child receives in:
- Period 1: October 1, 2022 to June 30, 2023
- Period 2: July 1, 2023 to June 30, 2024
First benefit period – Eligibility checklist
Period 1: October 1, 2022 to June 30, 2023
You must meet all of the following for each child you apply for:
- Your child was born on or after December 2, 2010 (under 12 years old as of December 1, 2022)
- Your child receives dental care services in Canada between October 1, 2022 and June 30, 2023
- If your child does not have a dental appointment
- You should book a dental appointment for your child before applying. Details about your child’s dental provider and expected appointment date must be provided when you apply.
- You will need to repay amounts you received if your child does not receive dental care within this period.
- Your child does not have access to a private dental insurance plan
- Who can provide dental care services for your child
- a dentist
- a denturist
- a dental hygienist
What counts as access to private dental insurance. Your child is considered to have access to private dental insurance if:
- Some or all of your child’s dental costs are covered by a private dental insurance plan of any kind
- Your employer provides a dental insurance plan for your child
- Your child’s other parent or caregiver’s employer provides a dental insurance plan for your child
- You or someone else declined an employer provided dental insurance plan that would have covered the dental care for your child
- Your child’s dental costs are not fully covered by another dental program provided by any level of government
You are the only parent or caregiver receiving the CCB for your child as of December 1, 2022
- Who receives CCB payments
- You must be the person who is eligible to receive CCB payments for your child as of December 1 2022 to apply for the dental benefit.
- If you are getting the CCB, you can see your payments in “Benefits and credits” in your CRA My Account. If there are no CCB payments and you have a spouse or common-law partner, they should check their account.
- You can also review your bank statements or the name on the cheques.
or
You have shared custody of your child and receive half of the CCB for your child as of December 1, 2022- Shared custody benefit amounts are split
- If your child only lives with you part-time, you may be considered to have shared custody for the Canada Child Benefit (CCB). This benefit uses the same custody arrangement as the CCB as of December 1, 2022.
- Your benefit payment will be adjusted to 50% of your Canada Dental Benefit amount which is based on your own adjusted family net income. This means you may receive a different amount than your child’s other parent.
- You filed your 2021 taxes
- Your spouse or common-law partner filed their 2021 taxes
or - You do not have a spouse or common-law partner as of December 1, 2022
- Your adjusted family net income is less than $90,000 in 2021
- How your adjusted family net income is calculated
- The CRA calculates your adjusted family net income for this benefit based on your 2021 tax information.
- You do not need to calculate your adjusted family net income, but you can use it to estimate your benefit amount.
You need all of the above to be eligible
To be eligible for the Canada Dental Benefit, you must meet all of the above criteria for each child you apply for.
If you have more than one child, check your eligibility for each child.
Additional payment for higher dental costs
An additional payment may be available starting on July 1, 2023 for some eligible children. You may meet the criteria if you are not applying for both benefit periods and your child’s dental costs are more than $650 in the period you apply for. You must have already applied and been eligible in order to meet the criteria for the additional payment.
ONTARIO STAYCATION TAX CREDIT
The temporary Ontario Staycation Tax Credit for 2022 aims to encourage Ontario families to explore the province, while helping the tourism and hospitality sectors recover from the financial impacts of the COVID‑19 pandemic.
Ontario residents can claim 20% of their eligible 2022 accommodation expenses, for example, for a stay at a hotel, cottage or campground, when filing their personal Income Tax and Benefit Return for 2022. You can claim eligible expenses of up to $1,000 as an individual or $2,000 if you have a spouse, common-law partner or eligible children, to get back up to $200 as an individual or $400 as a family.
The credit will provide an estimated $270 million in support to about 1.85 million Ontario families.
Eligibility
You are eligible to claim the credit if you are an Ontario resident on December 31, 2022.
Only one individual per family can claim the credit for the year. Your claim can include the eligible expenses of your spouse or common-law partner and your eligible children. An eligible child is not entitled to claim the credit.
You can claim the Ontario Staycation Tax Credit for accommodation expenses for a leisure stay of less than a month in Ontario, at a short-term accommodation or camping accommodation, such as a:
- hotel
- motel
- resort
- lodge
- bed-and-breakfast establishment
- cottage
- campground
- vacation rental property
The tax credit only applies to leisure stays between January 1, 2022, and December 31, 2022, regardless of the timing of payment for the stays.
The accommodation expenses must have been paid by you, your spouse or common-law partner, or your eligible child, as set out on a detailed receipt provided by a supplier registered for the Goods and Services Tax (GST)/Harmonized Sales Tax (HST).
As long as all other conditions are met, you can claim any of the following expenses:
- accommodation for a single trip or multiple trips, up to the maximum expense limit of $1,000 as an individual or $2,000 as a family
- accommodations booked either directly with the accommodation provider or through an online accommodation platform
- the portion of the expense that is necessary to have access to the accommodation
- the accommodation portion of a tour package expense
You must keep your detailed receipts for any eligible expenses you claim for the credit. Those receipts must include:
- the location of the accommodation
- the amount that can reasonably be considered to be for the accommodation portion of a stay
- the amount of any GST/HST paid
- the date of the stay
- the name of the payor
OTHER IMPORTANT CHANGES FOR 2022 YEAR
- Increase in First Time Homebuyer Amount: The First-Time Home Buyer’s Tax Credit is a $10,000 non-refundable tax credit. Up until 2021, the tax credit amount was $5,000, but in 2022 legislation was passed to increase this to $10,000 for 2022 and all subsequent tax years. If you’re buying a home for the first time, claiming the first-time homebuyer credit can land you a total tax rebate of $1,500 ($750 until the 2022 budget was approved). While $1,500 isn’t a life-changing amount of money, it can make buying your first home a little bit easier. The First-Time Home Buyer’s Tax Credit was first introduced in 2009, and is available to all qualifying Canadian taxpayers.
- Increase in Annual TFSA Limit: The TFSA contribution limit has increased to $6,500 for the year 2023. This means that if you’ve had an account since 2009, were 18 years of age and have been a resident of Canada throughout that period, the cumulative total you can have in your TFSA is now $81,500.
- New OAS Limit Amounts: The OAS is designed to provide retirees with a source of income to support their retirement. However, if your income is over certain limit amounts, you might find your OAS amount reduced, and even canceled entirely. For the 2022 tax year, if your taxable income was over $81,761, you would need to repay some of your OAS. Similarly, if your taxable income was over $134,626, you would not have received any OAS payments. Thanks to the CRA’s new Affordability Plan, seniors aged 75 and over received an automatic 10% increase of their Old Age Security pension, as of July 2022.
- Increase in RRSP Dollar Limit: The RRSP annual dollar limit for tax year 2022 is $29,210. Remember that your RRSP contribution limit is capped at 18% of your earned income in the previous year. This means the dollar limit is the maximum amount you can contribute regardless of your income.
Some credits have been added, changed, reinstated, or expanded for the 2022 tax year.
Below are some of the Federal changes to tax credits:
- Air Quality Improvement Tax Credit: Eligible businesses including sole proprietorships, can claim 25% of their qualifying ventilation upgrades to a maximum of $10,000, creating a $2,500 tax credit.
- Automobile Income Tax Deduction Limits: The changes include an Increase in Capital Cost Allowance (CCA) ceiling limits for zero emission and passenger vehicles, deductible monthly leasing costs also increased by $100, and the per kilometer rate paid by employers to employees who use their personal vehicle for work has increased by 2 cents per km from last year.
- Home Accessibility Tax Credit (HATC): If you’re 65 or older, are eligible for the disability tax credit, and have remodeled your home for safer access, you can claim up to $20,000 of your related HATC expenses.
- Labour Mobility Deduction (LMD): This new deduction allows tradespeople, apprentices, and employees working in construction to claim meals and lodging expenses paid to earn income at a temporary work location.
Below are some of the Ontario changes to tax credits:
- The Ontario Seniors Care at Home Tax Credit: is a refundable personal income tax credit to help seniors with eligible medical expenses, including expenses that support aging at home. The credit is equal to 25% of your eligible medical expenses up to $6,000, for a maximum credit of $1,500.
- The Seniors’ Home Safety Tax Credit: is a new credit that supports seniors in making their homes safer and more accessible, with a credit of 25% up to a maximum of $10,000 in eligible expenses. The maximum credit is equal to $2,500 per year.
We at PSingh CPA Professional Corporation can help you understand your eligibility and help you proactively organize for the upcoming tax season and file your personal tax returns in the most tax-efficient way. We provide full course bookkeeping, accounting and tax advisory services to small businesses and individuals. Contact us today to book an appointment and we’d be happy to help.
References:
https://www.knotia.ca/Knowledge/News.aspx?AlertID=146160
Canada revenue Agency: www.canada.ca
https://www.ontario.ca/page/ontario-staycation-tax-credit
https://turbotax.intuit.ca/tips/9-biggest-tax-changes-canadians-need-to-know-in-2023-14386
