What’s New 2020

There were a few major changes announced this tax filing season.

The highly anticipated redesign of the T1 General Income tax return came into effect early January of this year.

Aside from the aesthetic look of more white space and larger font, this redesign sees the T1 return go from 4 pages to 8 pages and has now merged the formerly Schedule 1 into the return. This allows the CRA to calculate federal tax directly on your return.

If you are anything like me, the first thing you noticed is the line numbers have changed from 3-4 digits to 5 digits. Line 101 – employment income is now Line 10100.

Pages 1-5 (titled parts 1-4) mimic the previous years T1 General for entering personal information and net income. There is a new question to note from the CRA to complete Form T90 if you have exempt income, under the Indian Act.

Page 6 and 7, Steps 5&6 previously schedule 1 are where you may notice, what’s new.

Typically schedule 1 amounts change from year to year, based on factors such as cost of living and inflation.

This year’s changes include: a jump to the basic personal amount now $12,069 up from 2018 amount $11809.

The age amount for people born before 1953 is $7494 up from $7333.

As well as minor changes to the Canada Caregiver Amount, disability amount and EI premiums.

The Climate Action Incentive, a refundable tax credit will be adding more of a refund to your tax return this filing season. This credit is due to Carbon taxation brought in by the Liberal government. 2018 filing season was the first year we seen the Climate Action Incentive. The basic amount for a family of 4 was $307. This year the amount has jumped to $448 for a family of 4, with 10% added if you live in a rural area. Note for the climate action incentive, it is ONE claim per household.

First time home buyers credit remains the same this year with a claim of $5,000 and a refundable tax credit of $750.

What has changed here, is the Home Buyers Plan…. The HBP allows potential first-time homeowners, to withdraw $35,000 from RRSP up from $25,000 in previous years and allows this withdrawal to not be marked as taxable income, rather a 15 year pay back plan.

The maximum pensionable CPP earnings is up to $57,400 up from 2018 amount of $55,900, and the EI max up to $53,100, up from $51,700.

Another exciting change to note is the CRA is now accepting new forms of payment. Previously you could pay via cheque, at the bank or online banking. Now you can pay your balance owing using a credit card, PayPal or Interac e-transfer. This is excellent news to paying balances on time!

Filing date is April 30th this year for personal income tax returns, and June 15th for small businesses, but any amounts owing are due April 30th, ensuring filing and any amounts owing paid by this date will avoid penalties and interest.

If you have any questions or need some tax advice, feel free to visit SheDoTax.ca or email info@shedotax.ca. We are always happy to help!

Posted in 2020 Tax season.