Canadian Tax Change Highlights for 2022-2023

Due to COVID-19 onslaughts and rising inflation, the last year has experienced a lot of economic turbulence. As a consequence, Canadian taxpayers need to be aware of them when submitting […]

Due to COVID-19 onslaughts and rising inflation, the last year has experienced a lot of economic turbulence. As a consequence, Canadian taxpayers need to be aware of them when submitting Income Tax Returns in 2023 and beyond. In this article, You will get an insight into the sectors where tax changes have taken place.

The Return Deadline

This year, April 30 occurs on a Sunday, making May 1 the due date for 2022 Canadian individual income tax filings. If you owe money for 2022, you must pay it by April 30 to avoid interest. Self-employed taxpayers and their spouses have until June 15, 2023, to submit without incurring late filing fees.

Tax Credit Related to Ontario Staycation

This short-term government credit intends to entice families to visit Ontario while assisting the tourist and hospitality industries in recovering from the financial effects of the COVID-19 epidemic. When submitting their personal income tax returns for 2022, Ontario individuals can deduct 20% of their qualifying lodging costs, such as those for a stay at a hotel, cottage, or campsite.

For a refund of up to $200 per individual or $400 per family, you can deduct up to $1,000 in qualifying costs for an individual or $2,000 if you have a common-law partner, spouse, or eligible children.

Making a Claim for a Deduction for COVID-19 Repayments

If you got COVID-19 benefits in 2022, a T4A slip will be provided to you. If you are required to refund any COVID-19 benefits you received in 2022, you might either:

  • Submit a Deduction Request for 2022;
  • You should divide the Deduction Across Your Tax Returns;
  • Claim a Deduction on Your Tax Return for the Year (2020 or 2021) that you received the benefit.

According to the Canada Revenue Agency, a new form will be made available in January 2023 to be used for deducting 2022 repayments from income in a prior tax year. Along with your 2022 tax return, you must Submit Form T1B, Request to Deduct Federal COVID-19 Benefits Repayment in a Prior Year.

United States Tax Change Highlights for 2022-2023

In this year, some new things comprise a rise in standard deductions along with adjusted tax brackets and some prime alterations to certain common tax deductions and credits.

New Credits for Nova Scotia

For 2022, Nova Scotia is implementing the following credits:

  • For approved expenses on artistic, cultural, and physical activities for kids under the age of 19, the Children’s Sports and Arts Tax Credit offers a $500 refundable tax credit. Programs in the performing arts, visual arts, music, media, languages, cultures, and heritage are also eligible for the credit, as are programs in organized physical activity.
  • The rebate for fertility treatments and surrogacy-related medical expenditures is a refundable tax credit equal to 40% of the price of fertility treatments delivered by a Nova Scotia-licensed physician or infertility treatment centre as well as for surrogacy-related medical costs. An individual may submit claims for as many treatments as desired, but there is an annual cap of $20,000 on acceptable charges, which results in a $8000 annual tax credit.

First Home Savings Account (FHSA)

The government is developing a new tax-sheltered account that combines RRSPs and TFSAs. You can give up to $8,000 each year for five years (2023-2027), with a cap of $40,000. Tax deductions will apply to contributions, and FHSA profits will increase tax-free. The cherry on top is that you can withdraw money tax-free from the FHSA to pay for an eligible house.

You should be aware of some restrictions. For instance, a taxpayer cannot have possessed a residence in which they resided for the portion of the year prior to the withdrawal or at any other time during the four years prior. It is suggested that concerned taxpayers keep an eye out for announcements on the websites of the Department of Finance or the Canada Revenue Agency.

Personal Amounts Inflation Adjustments for 2023

Each year, the Canada Revenue Agency adjusts some personal income tax and benefit levels for inflation; the adjustments for 2023 will increase by an unprecedented 6.3%. For instance, the federal rate on taxable income beyond the $50,197 level for the first tax band in 2022 will rise from 15% to 20.5%. For 2023, this amount will rise to $53,359. Another illustration: The base benefit amount for a kid under the age of six receiving the Canada Child Benefit (CCB) will rise from $6,997 in 2022 to $7,437 in 2023.

Tax Credit for Multigenerational Home Renovation

This new refundable tax credit, which became available on January 1, 2023, is intended to assist with the construction of a self-contained condominium for a family member who is a senior or an adult with a handicap. Depending on the size of your building or renovation costs, you may be entitled to claim a refundable tax credit of up to $7,500 on your 2023 tax return. The credit will be equivalent to 15% of qualifying expenses up to a maximum of $50,000.

The article delves into the Canada Tax Changes for 2022-23. You get to know about the policies and the changes that you must keep in mind.

However, if you are unable to understand the tax changes, then you should take the help of a professional tax expert. And if you have further queries, you should get in touch with our expert team.

Frequently Asked Questions

Who is Eligible for Ontario Staycation Tax Credit?

If you reside in Ontario on December 31, 2022, you may apply for the credit. The credit may only be used by one person per household for the whole year. Your claim may cover your eligible children as well as your eligible spouse or common-law partner’s expenditures. The credit cannot be claimed by an eligible kid.

What are Some of the Rules You Have to Keep in Mind While Filing Canadian Taxes?

The rules for filing of Canadian taxes are highlighted below:

• The deadline for the majority of people to file their income tax returns is April 30, 2023.
• Make a claim for any tax credits you may be entitled to.
• Use any tax deductions for which you may be eligible.
• If possible, maximize your RRSP but refrain from going over.
• If possible, maximize your TFSA but don’t go over.

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