New for 2023 Personal Tax

• Electronic Remittances or Payments Above $10,000 – effective January 1, 2024, remittances or payments to the Receiver General of Canada should be made as an electronic payment if the amount is more than $10,000. Payers may face a penalty unless they cannot reasonably remit or pay the amount electronically. For more information, go to payments to the CRA
• Advanced Canada Workers Benefit (ACWB) – taxpayers no longer have to apply for advance payments of the Canada Workers Benefit (CWB) when they file their tax returns. These payments are now issued automatically to those who were entitled to receive the benefit in the previous year. For more information, go to Canada Workers Benefit
• Deduction for Tradesperson’s Tools Expenses – Starting in 2023, employees can deduct up to the $1,000 for tradesperson’s tools expenses (increased from $500)
• Residential Property Flipping Rules – Starting January 1, 2023, a new deeming rule applies to ensure profits from flipping residential real estate are always fully taxed. The rule deems profits from dispositions of residential property (including rental property) that was owned for less than 365 days to be taxable business income instead of capital gain, with exemptions for death, breakdown of marriage, eligible relocations and other life events. The flipping rules also apply to assignment sales. For more information, see Residential Property Flipping Rule
• First Home Savings Account (FHSA) – The FHSA is a new registered plan to help individuals save for their first home. Starting April 1, 2023, contributions to an FHSA are deductible and the income earned in an FHSA is not taxable. Qualifying withdrawals from an FHSA to purchase a qualifying home are also not taxable. If you opened one or more FHSAs in 2023, complete schedule 15, FHSA Contributions, Transfers and Activities. For more information, see FHSA
• Multigenerational Home Renovation Tax Credit (MHRTC) – This new refundable tax credit is available for up to $7,500 (15% of $50,000) of the costs of a qualifying renovation to an eligible dwelling that is completed to allow a qualifying individual to live with a qualifying relation. You can claim the credit for qualifying expenditures made or incurred after December 31, 2022, for services performed or good acquired after that date. For more information, see MHRTC
• Temporary Flat Rate Method For Home Office Expenses – the temporary flat rate method does not apply for 2023. Therefore, taxpayers looking to claim home office expenses for 2023 will be required to use the detailed method and get a completed Form T2200, Declaration of Conditions of Employment, from their employer

Other Notable Updates

• The 2023 cumulative lifetime capital gains exemption is $971,190
• The tax-free savings account (TFSA) limit has been increased to $7,000 for 2024, bringing the cumulative contribution limit to $95,000 for individuals that were eligible to make a TFSA contribution in 2009
• The RRSP contribution limit for the 2024 taxation year is 18% of earned income you reported on your tax return in 2023, up to a maximum of $31,560. For the 2025 taxation year, the RRSP contribution limit would be a maximum of $32,490