New Changes and New Credits for the 2023 Tax Season
The 2022 tax year has shown a steady transition back to the norm of pre-pandemic tax considerations. While the government is still focused directly on providing support to Canadians experiencing greater financial needs, they have made significant changes. Our team, at K Liu Accounting Services has been working hard to keep you up to date on the ongoing changes, proposals, and announcements. Listed below are some of the most notable changes….
Individual
2022
Canada Housing Benefit – This one-time top-up to the Canada Housing Benefit is intended to help low-income renters with the cost of renting.
Canada Dental Benefit – The purpose of this benefit is to help lower dental costs for eligible families earning less than $90,000 per year.
Underused Housing Tax (UHT) – Levies a national 1% tax annually on the value of non-resident, non-Canadian-owned residential real estate that is assessed to be vacant or underused.
Labour Mobility Deduction – A labor mobility deduction of up to $4000 for workers in the building and construction trades is available for eligible travel and temporary relocation expenses.
Disability Tax Credit (DTC) Enhancements – Type 1 Diabetes, Life-Sustaining Therapy, and Mental Functions – This tax credit is available to qualifying individuals with type 1 diabetes to claim the disability tax credit, regardless of the time spent on life-sustaining therapy.
2023
Tax-Free First Home Savings Accounts (FHSA) – This is a new registered savings plan, which gives prospective first-time home buyers the ability to save $40,000 on a tax-free basis.
Permanent Elimination of Federal Interest on Canada Student Loans and Canada Apprentice Loans – This includes loans like these that are currently being repaid, beginning April 1, 2023. The repayment assistance threshold has been increased to $50,000 for Canada Student Loan borrowers who are single.
Multigenerational Home Renovation Tax Credit – This is a new tax credit that allows qualifying applicants to receive a 15% refundable tax credit up to $50,000 of eligible expenses to construct a secondary suite for a senior or person with a disability to live with a relative, resulting in a maximum benefit of $7,500 and applies to 2023 and subsequent taxation years.
Residential Property Anti-Flipping Tax Credit – All gains arising from the disposition of residential property (including rental property) owned for less than 12 months are deemed to be business income. This provision applies to transactions occurring on or after January 1, 2023.
For more in-depth details on each of these tax credits and other tax credits that you may be eligible for, please visit K Liu Accounting Services 2023 Tax Season Guide. Should you have any additional questions, please contact our specialists at Contact Us | K Liu Accounting Services Inc.
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