Tax changes for new families, small businesses and more

By Janet Kanters Times Editor

The 2018 federal budget outlined many changes that will impact taxes this year and these updates will affect tax returns.
According to Lisa Gittens, an H&R Block tax expert, the changes will be positive for the average person, with parental benefit sharing extended and additional medical expenses allowed for claims.
“The government has also made clear that Canadian business is a priority, with the reduction in corporate taxes for small businesses,” she noted.
Tax laws most likely to have the biggest impact on returns include the EI supplemental parental sharing benefit which provides an additional five weeks of benefits when both parents agree to share parental leave. This pilot program allows claimants to keep 50 cents of their EI benefits for every dollar they earn, up to a maximum of 90 per cent of their EI benefits.
Effective this year, taxpayers suffering from a severe mental impairment will be able to claim the costs of caring for a service animal. However, animals that provide comfort or emotional support, but have not been specially trained to perform the tasks above, will not be eligible.
The small business corporate tax rate was reduced from 10.5 per cent to 10 per cent effective for 2018 and will be further reduced to nine per cent for 2019.
And finally, retirement income security benefits received by veterans are now eligible for pension income splitting. This provision is retroactive to 2015. The amount that can be split is subject to a cap of $103,056 for 2018.
Not new but something to remember is most Canadian parents are eligible to apply for the Canada Child Benefit, a tax-free monthly payment to assist with the cost of raising children. When the program was revamped in 2016, eligibility was extended to foreign-born status Indigenous individuals who resided in Canada but were not Canadian citizens or permanent residents. For those taking time off with their little one, they may be eligible for Employment Insurance benefits, which will need to be reported as income on their tax return. More recently, expenses for assisted reproductive technologies to help with getting pregnant can now be claimed as a medical expense.
Also, if you’re buying a house for the first time, you can take advantage of the First-time Home Buyers’ Tax Credit, a $5,000 credit that works out to $750 in tax savings. You can also tap into your Registered Retirement Savings Plan to help with your down payment, as a part of the Home Buyers’ Plan, and borrow up to $25,000 in one year, tax free.