Summary of Changes to Charitable Donation Tax Deductions

On January 23, 2025, the Department of Finance released draft legislation regarding this proposed change, which will be introduced in Parliament.

Extended Deadline for Donations:

Donors can now make eligible charitable contributions until February 28, 2025, and still claim these donations on their 2024 personal income tax return.

Claiming Donations:

• If donors do not claim their donations on the 2024 tax return, they have two options:

• Claim on the 2025 Return: They can include the donations when filing their 2025 personal income tax return.

• Carry Forward Amount: Alternatively, donors can carry forward the eligible donation amounts to future tax years.

Feel free to contact us for more information!"

Filing your GST/HST return

CRA has noted that almost all returns for reporting periods that begin after December 31, 2023, with the exception of returns filed by registered
charities and selected listed financial institutions, are required to be filed electronically. The webpage stated that registrants who continue to file paper returns will be charged a penalty.

Please contact us to learn more about methods to file and avoiding filing penalties!

Post-mortem loss utilization and tax planning

A major obstacle in employing the loss realization strategy has been the requirement to recognize capital losses within the first taxation year of a graduated rate estate (GRE). On August 12, 2024, the Department of Finance released several draft legislative packages for feedback. Among these, the Technical Amendments package proposed allowing a Subsection 164(6) election, which would enable losses recognized in any of the first three taxation years of the GRE to be considered as realized in the final personal tax return. Additionally, relief from certain stop-loss rules for losses incurred by a GRE and subject to a Subsection 164(6) election would be applicable for the same three-year timeframe.

Please contact us for how this can affect Estate planning for your family

Deferral in Implementation of Change to Capital Gains Inclusion Rate

On January 31st, Finance Minister Dominic LeBlanc announced that the federal government is postponing the increase of the capital gains inclusion rate from 50% to 66.67% for capital gains above $250,000, now set for January 1, 2026. To protect middle-class Canadians from higher taxes, the government will maintain or enhance capital gains exemptions and introduce new incentives. Key measures include 

• maintaining the Principal Residence Exemption,

• introducing a $250,000 annual threshold for modest gains including sales of secondary property (effective January 1, 2026),

• increasing the Lifetime Capital Gains Exemption to $1.25 million effective June 25, 2024 on the sale of small business shares and farming/fishing property, and

• launching a Canadian Entrepreneurs’ Incentive that reduces the inclusion rate for eligible gains. This incentive would take effect starting in the 2025 tax year and the maximum would increase by $400,000 each year, reaching $2 million in 2029. Combined with the new $1.25 million lifetime capital gains exemption, when this incentive is fully rolled out, entrepreneurs would pay less tax and be better off on capital gains of up to $6.25 million

These changes aim to support individuals and entrepreneurs while ensuring they are not adversely affected by the new capital gains inclusion rate.

Canada Carbon Rebate for Small Businesses

The government has announced that corporations filing their 2023 tax return after July 15, 2024, and before December 31, 2024, will be eligible for a payment related to the fuel charge for the years 2019-2020 to 2023-2024. This retroactive payment is only available to Canadian-controlled private corporations (CCPCs), including Indigenous CCPCs. To qualify for this rebate, CCPCs must have filed their tax returns by the July 15 deadline and employed at least one person in a designated province with a total of 499 or fewer employees during the relevant fuel charge year. Note that British Columbia, Northwest Territories, Nunavut, Quebec, and Yukon are not designated to receive the rebate from 2019 to 2023.

Incentives for clean energy generation and conservation equipment

“Did you know…

The Government provides investment incentives for certain clean energy generation and conservation equipment used in businesses to generate income.

•  Equipment purchased after December 31, 2024 qualifies as Class 43.1, eligible for:

  •  75% depreciation (CCA) in the first year (2025/2026 only).

  •  30% annual depreciation (declining balance) afterward.
    

•  Related costs, such as pre-feasibility studies, feasibility studies, and process engineering, qualify as Canadian Renewable and Conservation Expenses (CRCE):

•  These are fully deductible in the year incurred or can be carried forward indefinitely.

•  To claim CCA:

•  The equipment must be purchased for income generation.

•  It must be available for use.
  

•  Additional tax credits and rebates include:

•  Clean Technology Investment Tax Credit (30%).

•  Provincial programs, such as: 

•   Clean BC rebate/incentive program.

•   Alberta-specific programs.

•   Rebates from BC Hydro.

Reach out to us for more information!"

Changes to the capital gains inclusion rate

The proposed changes to the capital gains inclusion rate, effective June 25, 2024, are currently subject to parliamentary approval.

In line with standard practice, the CRA is administering these changes based on the proposals outlined in the Notice of Ways and Means Motion tabled on September 23, 2024.

Under parliamentary convention, taxation proposals take effect as soon as a Notice of Ways and Means Motion is tabled, ensuring consistency and fairness for all taxpayers.

Please contact us to learn more about how this affects you!

Now operating in Calgary!

Great news!
We’ve had team members working from Alberta for a few years already, but now we can officially announce that James & McIntyre CPAs LLP has an office in Calgary.

The COVID-19 Canada Emergency Wage Subsidy and Temporary Employer Wage Subsidy: What they are and how to claim them.

[updated end of day April 8, 2020]

The government first announced a temporary 10% wage subsidy which would come in the form of an immediate reduction in payroll remittances for most small to medium businesses. That program is still going forward, and now there is a new (separate) subsidy program which provides up to a 75% wage subsidy for businesses that have seen a decline in revenue starting March 2020 due to COVID-19 (details below). You can claim both subsidies, but the maximum you can get is a 75% wage subsidy so if you qualify for that but receive the 10% subsidy, it will reduce your 75% amount coming back. Here are the details on how to claim these:

10% Wage Subsidy

• Qualification criteria: you need to be an employer in Canada and have an existing payroll account with CRA on March 18, 2020

• Amount of subsidy: 10% of gross wages paid your employees up to a max of $1,375 per employee or $25,000 total per employer

• How you claim it: you need to manually calculate the subsidy and reduce your payroll remittances by the 10%. There is no application process or reporting needed - you simply calculate and remit less.
  
  Example using random numbers:
  You paid employees $10,000 of wages in total on or after March 18th.
  You withheld $3,500 of income taxes on those amounts, plus CPP and EI. Instead of remitting the $3,500 as you normally would, you would remit $2,500 ($3,500 less 10% of $10,000) plus your CPP and EI as you normally would.

• Subsidies for non-arm’s length employees (ie. business owners and their family members) will need to be calculated on their normal pre-COVID earnings. In other words, you can’t increase your pay to get more subsidy.

• More details and FAQ from the CRA here: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/frequently-asked-questions-wage-subsidy-small-businesses.html

75% Wage Subsidy

• Qualification criteria: you need to be an employer in Canada and have experienced a drop in revenues of 15% or more due to COVID-19 in March 2020, and 30% or more in the following months. This is considered on a month-by-month basis, and is compared to either the same month of the previous year, or an average of January & February 2020 revenues.

• Amount of subsidy: 75% of gross wages paid your employees from March 15th 2020 onward, up to a max of $847 per week per employee. There is no cap on the total per employer, and wages paid to new employees hired and paid would be eligible under this program as well.

• Subsidies for non-arm’s length employees (ie. business owners and their family members) will need to be calculated on their normal pre-COVID earnings. In other words, you can’t increase your pay to get more subsidy.

• How you claim it: via your My Business Account on CRA’s website. You will receive the reimbursement by direct deposit if you are signed up, and it may take up to 6 weeks. As of this date, applications are not yet open but are coming soon so we expect to have more details when they do.

• More details from the CRA here: https://www.canada.ca/en/department-finance/economic-response-plan/wage-subsidy.html

Can I claim both?The short answer is YES. But you’ll only receive a maximum of 75% subsidy, so if you reduce your payroll remittances by the 10% subsidy and then claim the 75% subsidy later, you’ll only get up to 65% (bringing you to 75% in total).