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Tax Guide 2021

SAVING YOU MORE

A Message from John, 

Canadians must be able to rely on their Member of Parliament to be the voice of hard-working taxpayers, especially through tumultuous times like these. The COVID-19 pandemic and lockdowns have created massive economic damage leaving millions of Canadians struggling and having to face extreme hardships. 

I hear from constituents and Canadians across the country who are doing everything they can to get by, but many fear there are still dark days ahead.

Even before the COVID-19 pandemic, the Liberal government’s high-tax agenda was doing real damage to Canada’s economy and Conservatives are wary the Liberals will hike taxes even higher to pay for Justin Trudeau’s out-of-control spending. In fact, they already have, announcing increases to the carbon tax and the excise tax - meaning Canada has hiked taxes during a pandemic, which is unbelievable.

Canada finds itself in a deep financial hole exasperated by the Liberal government’s excessive spending. We need a sound fiscal plan to get businesses back open, Canadians back to work and our economy back on its feet. Canadians deserve a clear recovery strategy focused on supporting our small businesses as well as key industries like energy, agriculture and manufacturing. Conservatives are focused on supporting Canadians through these tough times, which is why we supported important programs such as the wage subsidy, CERB and CEBA. However, we now must turn our attention to recovery so the economy of Foothills doesn’t just survive COVID-19, but thrives afterwards.

That’s why, as income tax season approaches, it’s imperative you receive all the benefits for which you qualify. Take a look through this Tax Guide and find some of the tax savings you may claim. Also, be aware of scams and review these tips on how to ensure a call from CRA, for example, is legitimate.

Please feel free to contact my office with any comments or questions you may have.


Sincerely,
John Barlow

Supports Available

 Support for Individuals Impacted by COVID-19
 

Employment Insurance ............................................. 4
Canada Recovery Benefit ..........................................4
Canada Recovery Sickness Benefit  .........................4
Canada Recovery Caregiving Benefit ....................... 4


 

 Savings for All Canadians
  

Goods and Services Tax (GST) Credit...................... 5
Medical Expense Deductions ....................................5
Simplified Home Office Tax Credit for 2020................5
Canada Training Credit...............................................5
Carbon Action Incentive Credit for Albertans..............5

 Savings for Families
 

Child Care Expense Deductions.............................. 6
Canada Caregiver Credit..........................................6
Child Disability Benefit..............................................6
Adoption Expense Tax Credit...................................6
Registered Disability Savings Plan..........................6

 

 Savings for Seniors
 

Home Accessibility Tax Credit................................ 8
Doubling the Pension Income Amount................... 8
Increasing the Age Amount.................................... 8
Pension Income-Splitting....................................... 8
Increasing the Age Limit for Converting RRSPs to RRIFs..... 8

 

 Savings for Working Canadians
 

Canada Workers Benefit...................................10
Canada Employment Amount............................10
Apprenticeship Job Creation Tax Credit.............10
Lower Taxes for Local Business Owners, Farmers and Fishermen...  10
Eligible Educator School Supply Tax Credit ......11
Volunteer Firefighters’ Tax Credit.......................11
Search and Rescue Volunteer Tax Credit..........11
Tradespersons’ Tools Deduction.......................11
Meal Expenses of Long-Haul Truck Drivers......11

 

 Savings for Home Buyers
 

Home Buyers’ Amount....................................12
Home Buyers’ Plan.........................................12

 

 Protect yourself from CRA Scams
 

Types of scams to watch for…….…………13

 

CRA Information

Contact Information...................................14

 

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 Support for Individuals
Impacted by COVID-19

 

If you need financial assistance, have lost a job, are unable to work or are taking care of family members due to the COVID-19 pandemic, there are programs to help you. Please note that some may no longer be available.
 

Employment Insurance (EI) Program
For 2021, there are changes to the Employment Insurance (EI) program to better support Canadians who need financial assistance. As of September 27, 2020, the minimum benefit rate is $500 per week before taxes in most cases.
 

Canada Recovery Benefit

The CRB provides $500 per week for up to 26 weeks for workers who have stopped working or had their income reduced by at least 50% due to COVID-19, and who are not eligible for Employment Insurance (EI).
 
Canada Recovery Sickness Benefit (CRSB)
The CRSB provides $500 per week for up to a maximum of two weeks, for workers who:

  • Are unable to work for at least 50% of the week because they contracted COVID-19;
  • Are self-isolated for reasons related to COVID-19;
  • Have underlying conditions, are undergoing treatments or have contracted other sicknesses that, in the opinion of a medical practitioner, nurse practitioner, person in authority, government or public health authority, would make them more susceptible to COVID-19.

 
Canada Recovery Caregiving Benefit (CRCB)
 The CRCB provides $500 per week for up to 26 weeks per household for workers:

  • unable to work for at least 50% of the week because they must care for a child under the age of 12 or family member because schools, day-cares or care facilities are closed due to COVID-19; or
  • because the child or family member is sick and/or required to quarantine or is at high risk of serious health implications because of COVID-19. 

 

Canada Emergency Response Benefit (CERB)
Since CERB is taxable, you can expect to receive an information slip indicating the total amounts of CERB payments you received in 2020. If you repay all or a portion your account will be adjusted accordingly.

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 Saving for All Canadians

 

Keep your receipts for tax purposes when you see this symbol: 

Goods and Services Tax (GST) Credit: 
• Four times a year, this tax-free payment helps individuals and families with modest incomes offset all or part of the GST they pay. 
 
• If you have a spouse or common-law partner, just one of you can receive this credit.  When you file your 2020 tax return, CRA will determine your eligibility and will advise those who are eligible to receive the credit.

Medical Expense Deductions 

• Canadians who live in a province where the Liberal Carbon Tax applies – Alberta, Saskatchewan, Manitoba and Ontario – can claim the climate action incentive with their income tax return. The amount you receive depends on your province of residence and your personal living situation, and it probably won’t cover all the costs of the carbon tax.  You may also qualify for a 10% supplement if you are a resident of a small or rural community. (The basic amounts for 2020 are as follows: Alberta $490, Saskatchewan $500, Manitoba $360, Ontario $300.)
 
Simplified Home Office Tax Credit for 2020
• For 2020, employees who worked from home more than 50% of the time over a period of a least four consecutive weeks in 2020 due to COVID-19 can claim a deduction of $2 for each day they worked at home up to a maximum of $400.
 
Canada Training Credit
• The Canada Training Credit (CTC) is available for eligible tuition and other fees paid for courses taken in 2020 and subsequent tax years. An eligible individual can accumulate $250 in each year toward their CTC limit, up to a maximum of $5,000 in a lifetime, which can be accessed the following year to help cover up to half of eligible tuition and fees associated with training.

Carbon Action Incentive Credit for Albertans 
• The climate action incentive (CAI) payment (Line 45110) consists of a basic amount and a 10% supplement for residents of small and rural communities. This payment may reduce your amount payable or increase your refund when you file your income tax and benefit return. Only one person per family (you or your spouse or common-law partner) can claim the CAI payment.

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 Saving for Families

 

Keep your receipts for tax purposes when you see this symbol: 

Child Care Expense Deductions 
You can claim payments you have made to someone who has looked after your child while you either earned an income from employment, operated a business alone or as an active partner, attended school or conducted research.
 
The previous Conservative government increased the dollar limits that parents can claim up to $8,000 per child who is under the age of seven, up to $5,000 for each child aged 7 to 16 (and for infirm children over the age of 16), and $11,000 for any children who are eligible for the Disability Tax Credit. 
 

Canada Caregiver Credit 

You can claim $2,230 under the Canada Caregiver Credit if you support a spouse, a common-law partner or a dependent with a physical or mental impairment. For your spouse, common-law partner or eligible dependent over 18, you may also claim an additional amount up to a maximum of $7,140.
 

Child Disability Benefit 
To recognize the additional costs that can add up when caring for a child with a severe disability, families can continue to claim the Child Disability Benefit. It is an amount of up to $2,886 per eligible child.
 
 
Adoption Expense Tax Credit 
This credit is a 15% non-refundable tax credit that allows adoptive parents to claim eligible adoption expenses relating to the completed adoption of a child, up to a maximum of $16,563.
 
Registered Disability Savings Plan 
The previous Conservative government introduced the Registered Disability Savings Plan (RDSP) to ensure long-term financial security for Canadians and families who are dealing with severe disability. Over the years, we have also made a number of enhancements. In particular, the Plan now ensures that long-term financial security is provided to children whose parents are no longer able to provide support. 

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 Saving for Seniors

 

Keep your receipts for tax purposes when you see this symbol: 

Home Accessibility Tax Credit  
Seniors and persons with disabilities who are eligible for the Disability Tax Credit can qualify for tax relief of 15% on up to $10,000 in eligible expenses, delivered by the previous Conservative government. To be eligible, expenses must be incurred in relation to a renovation allowing for better mobility and functionality or reducing the risk of harm.
 

Doubling the Pension Income Amount 

Years ago, a non-refundable pension income credit was introduced to apply to the first $1,000 of eligible pension income. A lot has changed since then, which is why the previous Conservative government increased the maximum amount of eligible pension income that can be claimed to $2,000. This results in even more savings that will make a real difference for pensioners.

Increasing the Age Amount
The Age Amount allows seniors to claim up to $7,637 on their 2020 tax return, depending on the individual’s net income. 
 
Pension Income Splitting 
The previous Conservative government introduced pension income-splitting to help ease the tax burden and deliver fairness for Canadian pensioners.
 
Generally, each individual Canadian pays taxes on their full income earned. Pension income-splitting allows any Canadian resident who receives qualifying pension income to allocate to their spouse (or common-law partner), with whom they reside, up to one-half of that income. By doing so, a pensioner and their family can dramatically reduce their tax load. 
 
Increasing the Age Limit for Converting RRSPs to RRIFs
Registered Retirement Savings Plans (RRSPs) provide one of the best opportunities for Canadians to save for the future. Since RRSP contributions are not taxable below your RRSP deduction limit, they are an ideal way to plan for retirement. However, some Canadians have been restricted by the way RRSPs are structured. Even though they chose to work past 69 years of age, it was a requirement to convert their RRSP into a Registered Retirement Income Fund (RRIF) and begin making withdrawals.
 
The previous Conservative government increased the age limit for converting RRSPs to RRIFs from 69 to 71. Now, more Canadians have the freedom to choose when they convert their RRSPs.

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 Saving for Working Canadians

 

Keep your receipts for tax purposes when you see this symbol: 

Canada Workers Benefit  
This benefit, introduced by the previous Conservative government in 2007, is a refundable tax credit that supplements the earnings of low-income workers to ensure they aren’t penalized for getting a job. The Liberal government has since renamed and expanded the benefit.
 
For those low-income working Canadians with a disability who face even larger barriers to workforce participation, the Working Income Tax Benefit (WITB) provides an additional supplement. 
 

Canada Employment Amount

The Canada Employment Amount provides most employees of the public and private sector (excluding the self-employed) with help to offset the cost of work-related expenses such as home computers, uniforms and supplies. If you qualify for this amount, you can claim up to $1,245 on your 2020 tax return.
 
Apprenticeship Job Creation Tax Credit 
Employers who employ an eligible apprentice in a skilled trade in the first two years of an apprenticeship contract (registered with the federal, provincial, or territorial government) can be eligible to receive a non-refundable tax credit equivalent to 10% of the salaries and wages paid to the apprentice. Introduced by the previous Conservative government, this can translate into tax savings for an employer of up to $2,000 per eligible apprentice. Visit online for more information at www.red-seal.ca.  
 
Lower Taxes for Local Business Owners, Farmers and Fishermen
When an owner of a family farm, local business, or fishing enterprise passes from one generation to the next, the properties – or shares – are subject to a Capital Gains Tax. Previously, the first $500,000 of the value was tax-free.
 
The previous Conservative government increased this exemption to $800,000. (As it is indexed for inflation, the lifetime capital gains exemption is $883,384 for the 2020 tax year.) Additionally, Conservatives also increased the limit specifically for farm and fishing businesses to $1 million.
 
Eligible Educator School Supply Tax Credit 
Eligible educators can claim a 15% refundable tax credit on up to $1,000 of supply purchases per year. Some examples include flashcards, arts supplies, writing materials, books for the classroom and more.
 
Volunteer Firefighters' Tax Credit 
This is a 15% non-refundable tax credit based on an amount of $3,000 for volunteer firefighters who perform at least 200 hours of service per year. Delivered by the previous Conservative government, the option to claim the exempt amount of up to $1,000 for honoraria will remain in lieu of the credit, if desired. 
 
Search and Rescue Volunteer Tax Credit 
This is a 15% non-refundable tax credit based on an amount of $3,000 to acknowledge the valuable contributions of ground, air and marine search and rescue volunteers, who perform at least 200 hours of service per year. Delivered by the previous Conservative government, the option to claim the exempt amount of up to $1,000 for honoraria will remain in lieu of the credit, if desired. 
 
Tradespersons'  Tools Deduction 
This tax deduction on tools, delivered by the previous Conservative government, helps those tradespeople who often must pay for their work expenses up front out of their own pockets. 
 
Meal Expenses of Long-Haul Truck Drivers  
The Canadian tax system generally limits business-related meal, entertainment, and other expenses to be deductible only up to 50%. The previous Conservative government raised the deductible portion of meal expenses for long-haul truck drivers to 80%.

Employers can save up to $2,000 per eligible apprentice
Be sure to claim tools and meal expenses
12

 Saving for Home Buyers

Home Buyers' Amount 

The credit (delivered by the previous Conservative government) allows first-time home buyers to claim an amount of $5,000 on qualifying homes purchased. It’s also available to those who are not first-time home buyers but who are eligible for the Disability Tax Credit (DTC) when they purchase a more accessible or functional home.
 

 

Home Buyer's Plan 

Under the Home Buyers’ Plan, the previous Conservative government raised the amount Canadians can withdraw from their Registered Retirement Savings Plans (RRSP) for a down payment on their first home. The amount has increased again to $35,000.

13

 CRA SCAMS: What to look out for

Recognizing a Scam:
Many scams and frauds attempt to imitate government services in order to gain access to your personal and financial information.
 

Types of Scams


 Phone Call Scams:  If someone calls you saying they are from the Government of Canada, there are ways you can verify it’s official government communication. Ask for their first name and their agent identification number and tell them you will have to check it first with CRA before you discuss anything.  If they’re legitimate, they won’t mind.  If it’s a scammer, they will likely hang up or never call back. 

If they say it’s an ‘emergency’ or threaten to send the police or begin legal action, it’s a scam.   

 Prepaid cards, bitcoin, e-transfer payments:  The Government of Canada will not demand payment by Interac e-transfer, bitcoin, prepaid credit cards or gift cards.
 
 Email Scams:  In some cases, the Government of Canada will send you an email. For example, The Canada Revenue Agency may notify you by email when a new message or a document, such as a notice of assessment or reassessment, is available for you in secure CRA portal.

 Text message / Instant Messaging Scams:  The Government of Canada will not send texts asking you for personal information, to verify your Social Insurance Number has been stolen,  to receive a tax refund, to make a payment, to receive your Employment Insurance payment.

 Mail Scams:  Some scammers send fake mail pretending to be from the Government of Canada  asking for personal and financial information. The letters can be very convincing and look real. Before you act, confirm if the letter is official communication.


Protecting Yourself:
 
· Protect  your Social Insurance Number
· Protect your financial information
· Report fraud to the Canadian Anti-Fraud Centre



Learn more here: https://www.canada.ca/en/revenue-agency/corporate/security/protect-yourself-against-fraud.html
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CRA Information

Contact the CRA

1-800-959-8281

Extended hours of operation during tax season (excluding Easter):
Monday to Friday 9:00am – 9:00pm 
Saturdays 9:00am – 5:00pm

In an effort to handle more calls, CRA has increased their staff and for some types of requests, callers will be given the option to leave a call back name and number and have a CRA Representative call you back so you don’t have to remain on hold.

For more information: https://www.canada.ca/en/revenue-agency.html


**NEW THIS YEAR: If you use an accountant or tax preparation office to complete your taxes, you will normally be asked to sign an authorization form allowing the person/company to submit your taxes on your behalf.  This year a new level of security has been added.  CRA is doing random audit checks on this process, so you may receive a call from CRA to verify that you gave permission to the person/company to complete your taxes.   

If you receive a call from CRA, they should provide their first name and identification number, and ask you one question, “Did you authorize company XYZ to complete  your taxes this year?” All you have to answer is ‘yes’.   If they continue to ask questions, you can tell them to contact your authorized representative for more information.
 

Ottawa Office:
310 Justice Building
Ottawa, Ontario
K1A 0A6
Email: John.Barlow@parl.gc.ca

 

Constituency Office:

109-4th Avenue SW
High River, Alberta T1V 1M5
Tel: 403-603-3665
Email: John.Barlow.C1@parl.gc.ca

 

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