Tax season is in full swing and Alan Rowell from the Accounting Place joined us with everything you need to know to file your taxes this year.
Rowell says 2021 Tax Changes can be better classed as “tinkering” with the Income Tax Act as opposed to changes. He explains while some things have changed, for the most part, everything will look similar, but slightly different.
He notes that for the 2020 tax year, taxpayers who received COVID-19 relief benefits were able to defer payment of their tax balance due. That due date is April 30, 2022. So, some taxpayers who owe taxes to Canada Revenue Agency (CRA) may also have a doubled-up amount due this year.
What’s new for 2021 Tax returns?
Rowell says there is a number of things that are new. The “Working From Home” simplified method tax credit introduced for 2020 has been increased to a maximum of $500 through to the end of the 2022 tax year. Still $2 per day, but now up to 250 days.
He also says the “Educator School Supply Tax Credit” has been increased to 25 percent of eligible expenses up to $1,000. The list of eligible expenses has also been expanded to include things such as laptops, webcams, and speakers due to school closings and online learning.
The “Climate Action Incentive” is also being changed to a quarterly payment made to the taxpayer where in prior years, it was a refundable credit on the tax return.
CERB and COVID income support payments
Rowell says this is complicated. He says repayments made to CRA for benefits previously received and taxed will show on a T4A slip. The taxpayer will have a choice as to whether it’s best to apply the repayment against their 2020 or 2021 tax return of a combination of both- whichever is their best overall benefit.
What is the “STAYCATION” tax credit?
Rowell says the STAYCATION refundable tax credit applied to the 2022 year and is designed to increase and assist Ontario tourism and hospitality business by taking your vacation this year in Ontario.
He says Ontario taxpayers who vacation in Ontario will receive a 20 percent tax credit on eligible expenses up to $1,000 for an individual or $2,000 for a family.
The qualification to it is receipts are required and the expense is for accommodations where HST has been charged and paid. This means something like the occasional rental of a friend’s cottage may not qualify.