While filing a tax return is an annual event for just about every Canadian, the return that is filed, and sometimes the process of filing it, changes each year. Differences in the return itself arise from changes made in our tax laws, which occur on a regular basis. Changes to the filing process generally come about because of changes in the Canada Revenue Agency’s (CRA) administrative procedures, which themselves are usually the result of improvements in technology. The process of filing returns for 2015 includes both types of changes.
On the administrative side, the CRA has introduced a new feature which it calls “Auto-fill my return”. That feature allows certain parts of a tax filer’s return for 2015 to be automatically completed using information which the CRA already has on file. Most tax filers will know that, even though the use of tax preparation software minimizes the need to manually input a lot of figures, it is still necessary to gather a great deal of information from a number of sources in order to complete the return. Auto-fill my return, which is available only to tax filers who file online using certified tax preparation software and who are registered for the CRA’s online service My Account, automatically completes those lines of the return which include information relating to the following:
- T3, T4, and T5 slips;
- Registered retirement savings plans (RRSPs);
- Home Buyers’ Plans;
- Lifelong Learning Plans;
- Non-capital losses;
- Capital gains and losses;
- Capital gains deductions;
- Federal and provincial tuition, education, and textbook carryover amounts; and
- Instalment payments.
Changes will also be seen on the 2015 return when it comes to income to be reported and deductions and credits to be claimed. Many of those changes affect families and while some of the changes will be welcome, others may come as an unpleasant surprise.
On the good news side, families which incurred deductible child care expenses during 2015 will find that the maximum amount which can be deducted per child has increased by $1,000. Consequently, the basic limits for 2015 are $8,000 for children born in 2009 or later and $5,000 for those born from 1999 to 2008. The annual limit for child care expenses claimable for a child for whom the disability amount can be claimed is $11,000.
Parents whose child or children are involved in fitness related activities have been able, for the past several years, to claim a non-refundable tax credit to help offset the cost of those activities. As a non-refundable credit, the credit could reduce or eliminate tax otherwise payable, but could not create or increase a refund. For 2015, however, the credit has been made refundable. Parents should also be aware that the same change has not been made to the parallel credit for qualifying arts-related activities, which remains a non-refundable credit.
On the negative side, the tax cost of recent changes to federal benefits and credits for families will become apparent. The previous federal government introduced measures which increased the amount of the Universal Child Care Benefit (UCCB) and provided a new benefit of $60 per month for children aged 6 to 17. Families eligible for the new or increased benefits received a lump sum amount last summer which included all such amounts payable for the first six months of 2015. Thereafter, the monthly amounts payable to qualifying families were increased to reflect the new or increased benefits. However, whether received as a lump sum or on a monthly basis, all such new or increased amounts are subject to tax, and that tax will have to be paid when the return for 2015 is filed.
That is not, unfortunately, the only bad tax news to be found for families on the 2015 tax return. At the same time the UCCB was increased and the new benefit introduced, the existing child tax credit was eliminated. That child tax credit allowed a parent to make a claim, on his or her tax return for the year, for a non-refundable tax credit of $338 for each child under the age of 18. Each such credit claimed reduced the parent’s overall tax bill for the year by $338. Since there will be no child tax credit claim allowed on the return for 2015, every Canadian parent who claimed that credit in previous years will, as a result, see their federal tax bill increase by $338 per child.
Another change provides a benefit to taxpayers who have pursued apprenticeships as part of their education. Students who receive funds from government student loan programs for approved post-secondary education programs have for several years been able to deduct the cost of interest paid on those loans. For 2015, a deduction for interest paid will be provided to registered Red Seal apprentices who have paid interest on a Canada Apprentice Loan.
