(File Photo)

Lower taxes, new RRSP rules among 2020 changes in Canada

$75 credit for digital news subscriptions and Alberta now has a federal carbon tax

Federal changes coming into effect Jan. 1 will lower taxes for most Canadians and affect retirees, recently separated individuals who want to use their retirement savings to buy a home, and digital news consumers.

The basic amount most Canadians can earn tax-free is going up on Jan. 1, resulting in slightly lower federal income taxes.

The increase in the basic personal amount was promised by the Liberals during the federal election campaign and is being phased in over four years until it reaches $15,000 in 2023.

For this year, the exemption amount will increase from $12,069 to $13,229. That will result in federal income tax savings of $113 in Quebec and $138 in the rest of Canada, according to the Canadian Taxpayers Federation.

The benefit will be lower for anyone earning more than $150,473 during the year and will be reduced to zero for Canadians with incomes above $214,368.

The tax cut will also be offset on individual paycheques by an increase in Canada Pension Plan premiums of up to $97, the CTF calculated. At the same time, employment insurance premiums will decrease, producing savings of about $20 for workers outside of Quebec, where the EI premium benefit will add up to $48 for some individuals.

Overall, residents of Ontario and Quebec earning less than $100,000 annually will see net savings of between $55 and $116, the federation estimated.

Also effective Jan. 1, Canadians experiencing a breakdown in their marriage or common-law partnership can qualify to withdraw money from their registered retirement savings plan, without incurring a tax penalty, to buy a home.

The Finance Department said individuals who make a withdrawal in the year a breakup occurs, or in the four preceding calendar years, can access the Home Buyers’ Plan, even if they are not a first-time home buyer.

It allows first-time home buyers to withdraw up to $35,000 from an RRSP to put toward a down payment without having to pay tax on the withdrawal.

KEEP READING: Hiking carbon tax to $210 cheapest way to hit Canada’s climate targets, commission says

Among the other federal tax changes coming into effect:

— Canadians who pay up to $500 for digital news subscriptions can apply for a $75 tax credit.

— Certain journalism organizations operating as not-for-profits will be allowed to register to receive donations from Canadians who can claim the amount for a charitable donation tax credit. Businesses donating money can also apply for tax savings.

— Two new types of annuities are being permitted under the tax rules for certain registered plans to provide Canadians with greater flexibility in managing their retirement savings.

— And, the federal carbon tax is being implemented in Alberta. The $20-per-tonne charge for carbon emissions will add to the cost of gas, diesel and heating fuels. Albertans had been paying a provincial carbon tax until it was abolished by the UCP government less than two months after the party won the Alberta election in the spring. Canadians in other provinces are already paying some form of carbon tax.

Terry Pedwell, The Canadian Press

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Single vehicle rollover on Highway 16 claims life of young woman, seriously injures another

The single vehicle incident occurred at Highway 16 and Hillcrest Way

Unofficial holidays: Here’s what people are celebrating for the week of Sept. 27 to Oct. 3

World Farm Animals Day, Drink Beer Day and Virus Appreciation Day are all coming up this week

COVID-19 cases grow to 13 at B.C. First Nation near Fort St. James

“This is very serious,” says Nak’azdli Whut’en Chief

Directional traffic change coming to one-way street beside McLeod Elementary

This change will be in effect starting Monday, Oct. 5.

Vanderhoof’s Brian Frenkel takes on top job in tough times

We can get through this, new local government leader says

Weekend sees 267 cases, 3 deaths in B.C.; Dr. Henry says events leading to COVID spread

There are currently 1,302 active cases in B.C., while 3,372 people are under public health monitoring

Lightning strike: Tampa Bay blanks Dallas 2-0 to win Stanley Cup

Hedman wins Conn Smythe Trophy as playoff MVP

16 MLAs retiring from B.C. politics add up to $20M in pensions: Taxpayers Federation

Taxpayers pay $4 for every dollar MLAs contribute to their pensions

Liberals seek to fast track new COVID-19 aid bill after CERB expires

Government secured NDP support for legislation by hiking amount of benefits by $100 to $500 per week

B.C. VOTES 2020: Echoes of HST in B.C. debate over sales tax

Cannabis, tobacco, luxury cars still taxed in B.C. Liberal plan

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

She warned her son about toxic drugs, then he was dead

Donna Bridgman’s son died at the age of 38 in Vancouver

B.C. food and beverage producers set record sales in 2019

Farmed salmon again leads international exports

Most Read