New for 2022 Personal Tax

Request to Deduct Federal COVID-19 Benefits Repayment in a Prior Year:

• The CRA has created a new form available for tax preparations of the 2022 personal income tax return (T1) for those who want to:
  • Deduct a repayment made in 2022 on their 2020 or 2021 return (depending on when they received the benefits) instead of their 2022 return, or
  • Split the deduction between their 2022 return and the return for the year that they received the benefit
• Once the form is filed with the 2022 T1, the CRA will automatically reassess the prior year return(s) and apply the deduction so the taxpayer does not need to request changes separately. Please note that benefits repaid after December 31, 2022 can only be deducted in the in in which the repayment is made

First-Time Home Buyers’ Tax Credit:

• The amount used to calculate the first-time home buyers’ tax credit has increased to $10,000 (from $5,000) for a qualifying home purchased after December 31, 2021

Home Accessibility Tax Credit:

• This non-refundable tax credit is available for eligible home renovation or alteration expenses that allow a qualifying individual to:
  • Gain access to, or be mobile or function within an eligible dwelling, or
  • Reduce the risk of harm to a qualifying individual within the dwelling or accessing it
• For 2022, the annual expense limit has increased to $20,000

Labour Mobility Deduction for Tradespeople:

• Under this new deduction, eligible tradespeople and apprentices working in the construction industry may deduct up to $4,000 in eligible, temporary relocation expenses per year

Ontario Staycation Tax Credit:

• The temporary Ontario Staycation Tax Credit is available for eligible Ontario residents to claim 20% of qualified, short-term accommodation expenses for vacations taken between January 1, 2022 to December 31, 2022 in Ontario. Up to a maximum amount of expenses of $1,000 for an individual and $2,000 for a family. Eligibility requires HST be charged on the accommodations

Employment Expenses for Working at Home due to COVID-19:

• The final year this temporary employment expense is available for 2022. If this applies to you and you have no other employment related expenses, you may be eligible to claim the temporary flat rate of $2/day as working from home deductions, to a maximum of $500 for 2022
• No employer documentation is required for this deduction. All you need to provide is the total number of days worked from home in 2022, not including statutory holidays, vacation time or sick time

New for 2023 Personal Tax

• Canada Dental Benefit - Applications are now available to eligible taxpayers via the CRA My Account. Taxpayers who do not have access to private dental insurance coverage and who have child(ren) who are under 12 years of age as of December 31, 2022 may be eligible for this benefit. For more information, please visit https://www.canada.ca/en/revenue-agency/services/child-family-benefits/dental-benefit/who-apply.html
• Canada Housing Benefit - Applications for the one-time top-up to the Canada Housing Benefit are now open via the CRA My Account. Applications are open until March 31, 2023. For more information, please visit https://www.canada.ca/en/services/taxes/child-and-family-benefits/top-up-canada-housing-benefit.html
• Residential Property Flipping Rules - effective January 1, 2023, profits from dispositions of residential property (including rental property) that was owned for less than 12 months would be deemed to be business income, subject to certain exemptions
• Electronic Notices of Assessment (NOA) - the CRA had proposed legislation that would allow the CRA to provide the NOA electronically to individuals who electronically filed their personal tax returns. This would have meant that NOAs would not be mailed to these individuals. As a reminder, this proposal has been deferred and we understand that the current process for issuing personal NOAs will not change until at least 2024. We strongly encourage all taxpayers to be registered for their CRA My Account. To register or access your My Account, please visit https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/account-individuals.html
• Tax-Free First Home Savings Account – Rules to enable this new type of account will take effect on April 1, 2023. For more information, please visit - https://www.canada.ca/en/department-finance/news/2022/08/design-of-the-tax-free-first-home-savings-account.html
• Multigenerational Home Renovation Tax Credit – Effective January 1, 2023, this is a refundable 15% tax credit for up to $50,000 of eligible expenses for a qualifying renovation, which is a renovation that creates a secondary dwelling unit to enable an eligible person (senior or person with disability) to live with a qualifying relation. This credit applies to 2023 and later taxation years for work performed and paid for and/or good acquired on or after January 1, 2023

Other Notable Updates:

• The 2022 cumulative lifetime capital gains exemption is $913,630
• The tax-free savings account (TFSA) limit has been increased to $6,500 for 2023, bringing the cumulative contribution limit to $88,000 for individuals that were eligible to make a TFSA contribution in 2009
• The RRSP contribution limit for the 2023 taxation year is 18% of earned income you reported on your tax return in 2022, up to a maximum of $30,780. For the 2024 taxation year, the RRSP contribution limit would be a maximum of $31,560