First-Time Home Buyer Incentive: New Possibility

Budget 2019 proposed the new Canada Mortgage and Housing Corporation (CMHC) first-time home buyer incentive, which is a shared equity mortgage that would give eligible first-time home buyers the ability to lower their borrowing costs by sharing the cost of buying a home with CMHC. Funding of 5% of the home purchase price would be available, enhanced to 10% if the home is newly constructed.

Continue Reading

Documents Required to Claim a US Foreign Tax Credit

Prior to the summer of 2015, CRA often accepted copies of the U.S. tax returns, as support to claim a U.S. Foreign Tax Credit (FTC). The "Federal Account Transcript" was selected as alternative evidence the return provided to CRA was filed and assessed as filed. Some practitioners report that obtaining "transcripts" from the Federal Government, and State Governments in particular, can be onerous, often requiring a request from the client rather than a representative. Form…

Continue Reading

2018 Tax Planning: Renumeration

Higher levels of personal income are taxed at higher personal rates, while lower levels are taxed at lower rates. Therefore, individuals may want to, where possible, adjust income out of high income years and into low income years. This is particularly useful if the taxpayer is expecting a large fluctuation in income, due to, for example, an impending maternity/paternity leave; large bonus/dividend; or sale of a company or investment assets. In addition to increases in…

Continue Reading

Active Business vs. Property Income: Music Royalties

A private corporation’s income from a specified investment business (SIB) is not eligible for the active business tax rates (varying from 10% to 31%, depending on a number of factors, including the total earnings from operations and the province or territory in which it is located). Rather, a corporate investment tax rate of around 50% is levied (again, it varies by jurisdiction). In a July 10, 2018 Tax Court of Canada case, at issue was…

Continue Reading

Interest on Delinquent Accounts: Proper Disclosure on Legal Documents

In a November 10, 2017 Alberta Court of Queen’s Bench case, the amount of a creditor’s claim was challenged after an uncontested default judgment. The claim included interest calculated at 1% per month as stated in the contract. However, where a rate is not stated in per annum terms, the legal maximum is capped at 5% annually under the Canada Interest Act. Therefore, the interest payable was legally capped at 5% per year, rather than…

Continue Reading

Director’s Liability: Helping Out Family

Being a director of a corporation comes with many responsibilities. Failing to exercise due diligence in ensuring source deductions (such as EI, CPP, and income tax) are properly withheld from wages and remitted to CRA may result in a director’s personal liability for the corporation’s outstanding amount. A June 12, 2018 Tax Court of Canada case examined whether an individual who set up a corporation (along with a bank account) for his brother to operate…

Continue Reading
Retaining Employment Insurance Benefits: Starting Part-Time Work
Photo by Stefan Lorentz from Pexels

Retaining Employment Insurance Benefits: Starting Part-Time Work

As of August 12, 2018, the “Working While on Claim” program became a permanent part of the Employment Insurance (EI) system. Prior to the program, an individual could earn a very low weekly amount, after which the EI benefit would be eroded on a dollar for dollar basis of earnings. Under the new rules, a person who earns income while receiving EI benefits can keep $0.50 of their EI benefits for every dollar earned, up…

Continue Reading
Close Menu