As Ontarians consider personal tax strategies for 2016, it is important to note that there are changes on the horizon.
The 2016 budget does not include any changes to Ontario personal tax rates but certain personal tax credits are being eliminated. A few of the changes are highlighted below. However, for a detailed list please refer to http://www.fin.gov.on.ca/en/bu
Personal Tax
The Children’s Activity Tax Credit is to be eliminated effective January 1, 2017. Effective 2016, the Children’s Fitness and Arts tax credit will also be reduced to $500 for the child fitness tax credit,and $250 for the child arts tax credit. Both credits will be eliminated for 2017 and subsequent taxation years. The current credits resulted in annual tax savings of up to $150 and $175 respectively.
The Canada Child Benefit (CCB) has replaced the Canada Child Tax Benefit and universal child care benefit. The CCB will provide an annual benefit of up to $6,400 per child less than six years of age and up to $5,400 per child aged 6 through 17, contingent upon family net income. An additional amount of $2,730 per child will continue to be available for those eligible for the disability tax credit. The new monthly benefit is tax free and declines as income rises.
The Healthy Homes Renovation Tax Credit will be eliminated January 1, 2017
Tuition and Education Tax Credits are being eliminated effective fall 2017. Tuition for studies after August 2017 will no longer be eligible for the credit. Where the student is a resident of Ontario as of December 31, 2017, any carry forward credits will continue to carry forward and can be claimed in the future. Starting in the 2017-18 school year, Ontario is making college and university education more affordable and accessible with more non-repayable grants, and lowering tuition. See: http://www.fin.gov.on.ca/en/bu
Teacher and Early Childhood Educators as of January 1, 2016 who are holding a valid provincial teacher’s certificate in which they are employed can claim a 15 per cent refundable tax credit. The amount includes up to $1,000 in eligible supplies for use in a school or regulated child care facility.
Ontario Electricity Support Program amounts received by the taxpayer will be exempt from income.
The Family Income Tax Splitting Credit has been eliminated as of the beginning of 2016.