- March 23, 2016
- Posted by: Harpreet
- Category: Tax Tips
Highlights of budget 2016
The Federal 2016 budget was revealed today by the new Finance Minister, Bill Morneau. The budget forecasts big deficits over the next five years with $29.4B deficit this year and no surplus forecast before the next election.
Some of the highlights of the budget are as follows:
1. Old age security age reinstated to 65
2. Canada child tax benefit
- Effective July 1, 2016, the Universal Child Care Benefit and Federal Child Tax benefit regimes have been replaced by the Canada child tax benefit.
- The benefit received is tax free.
- Families with children with low income will benefit the most (less than $30,000 annual income)
- The benefits will be paid monthly to eligible families beginning in July 2016. Entitlement to the CCB for the July 2016 to June 2017 benefit year will be based on adjusted family net income for the 2015 taxation year
3. Children fitness credit or arts credit will be completely phased out starting 2017
4. Income splitting eliminated for couples with children under the Family Tax Cut regime previously introduced by the Conservatives (no changes to pension splitting between seniors)
5. Small business rate remains at 15% Ontario- no further reductions in federal rate past 2016
6. Some changes to the way the Eligible capital property is taxed – introduced a new CCA class
7. To help pay for this middle class tax cut, “wealthy” taxpayers will pay higher tax rate
8. Introduction of a new refundable tax credit for teacher and early childhood educator school supplies.
9. Education and textbook tax credits: Eliminated the education and textbook tax credits for 2017 and later taxation years but have left the tuition credit the same.
10. Increase in the Guaranteed Income Supplement Budget by up to $947 annually for low-income single seniors.
11. Improving tax compliance – Further investments were announced to crack down on tax evasion and combat tax avoidance by hiring additional auditors and tax specialists and investing in more resources to target criminal tax evaders.