What’s new for tax professionals and tax preparers for the 2020 tax-filing season?
The Canada Revenue Agency (CRA) has made some changes this tax season to help Canadians get the most out of their services, benefits, and credits. Here's what you need to know:
New and enhanced services
Check CRA processing times – Want to find out quickly how long we'll take to handle your request? Use the Check CRA Processing Times tool on canada.ca to get a targeted completion date. The new tool uses published service standards and information you select from drop-down menus to calculate targeted completion times for various programs.
Dedicated telephone service for tax service providers – We're offering this service to small and medium income tax service providers across Canada for the 2020 tax filing season. By using this service, income tax service providers can connect with experienced CRA officers who assist with complex tax questions.
Changes to the income tax and benefit return – We've made a couple of formatting changes. Line numbers that were three or four digits are now five digits (for example, line 150 on the return is now line 15000), and the former Schedule 1 is now part of the return.
Representative authorizations – A new e-authorization process for online access to individual tax accounts will be introduced February 10, 2020. You will be able to request access to individual tax accounts using a web form through Represent a Client. The existing T1013 form will be discontinued for access to individual tax accounts. The T1013, RC59, and NR95 will be combined into one form called the AUT-01 Authorize a Representative for Access by Phone and Mail. This form will only be used to request offline access to individual and business tax accounts.
Changes to benefits, credits, deductions, and programs
Canada Pension Plan (CPP) enhancement – Employed individuals should report their base CPP/Quebec Pension Plan (QPP) contributions on T4 earnings as a non-refundable tax credit at line 30800 of the income tax return. For 2019 and subsequent tax years, the new deduction for the enhanced CPP contributions on T4 earnings will be allowed at new line 22215 on the income tax return.
Self-employed individuals should report half of the base amount of their CPP/QPP contributions on self-employed income at line 31000 (formerly line 310 for 2018 and prior tax years) as a non‑refundable tax credit. The other half of the base amount and the full amount of the enhanced CPP contributions on self-employed earnings will be allowed as a deduction at existing line 22200.
Canada training credit limit – Eligible workers of at least 25 years old and less than 65 years old at the end of 2019 and later years, and who meet certain conditions will accumulate $250 a year, up to a lifetime limit of $5,000 to be used in calculating their Canada Training Credit, a new refundable tax credit available for 2020 and future years.
Based on the information on their return, the CRA will determine their Canada training credit limit for the 2020 tax year and provide it to them on their notice of assessment for 2019 and will be available in My Account.
For 2020 and future years, an individual may be able to claim a Canada Training Credit equal to their Canada Training Credit Limit for the year or 50% of their eligible tuition and fees paid to an educational Institution in Canada, whichever is less.
Canada workers benefit – The Canada workers benefit, formerly the working income tax benefit, is a refundable tax credit available to eligible individuals and families who work, but earn low income. As of February 2020, a simplified version of the advance payments application will be available in My Account.
Climate action incentive payment – The federal fuel charge will no longer apply in New Brunswick as of April 2020. This means that residents of New Brunswick will no longer receive the climate action incentive payment when they file their income tax returns.
Eligible individuals who are residents of Alberta may now claim the climate action incentive payment. The climate action incentive payment may still be claimed by eligible individuals who are residents of Saskatchewan, Manitoba, or Ontario.
A 10% supplement is available to eligible individuals in these provinces who are residents of small or rural communities. The climate action incentive payment is first used to reduce any balance owing, and then it may create or increase a refund.
Withdrawals have increased under the Home Buyers' Plan – The maximum amount that can be withdrawn from a registered retirement savings plan under the Home Buyers' Plan increased from $25,000 to $35,000, for withdrawals made after March 19, 2019.
Cannabis as a medical expense – Certain cannabis products bought for a patient for medical purposes are eligible for the medical expense tax credit.
The patient must:
- be a holder of a medical document as defined in the Cannabis Regulations
- be registered as a client of the holder of a licence for sale; and
- make their purchases from the holder of a licence for sale they are registered with.
Tuition and enrolment certificate – The new T2202, Tuition and Enrolment Certificate replaces T2202A, Tuition and Enrolment Certificate for the 2019 and following tax years. Flying schools and clubs will now report information on the new T2202.
Kinship care providers – For 2009 and later years, for the Canada workers benefit and the former working income tax benefit, a care provider may be considered to be the parent of a child in their care, regardless of whether they receive financial assistance from a government under a kinship care program. As a result, the care provider may be entitled to claim the child as an eligible dependent for purposes of claiming the benefit.
Also, for these years, financial assistance payments received by care providers under a kinship care program are not included in income and not included when determining entitlement to benefits and credits based on income.
Communal organizations – For 2014 and later tax years, business income earned by the trust that is allocated to a member of the communal organization is deemed to be income from a business carried on by that member. This may allow members of a communal organization to claim the Canada workers benefit for 2019 and later years and the working income tax benefit for the 2014 to 2018 tax years.
Canada Revenue Agency
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