2017 Tax Updates

A General Overview of Significant  Income Tax Changes Related to the 2017 Tax Year

 

Personal Income Tax Credits

Effective for 2017 and subsequent taxation years, the general caregiver tax credit, infirm dependent tax credit, and family caregiver tax credit are replaced by the new Canada Caregiver tax credit.

Effective for 2017 and subsequent taxation years, expenses incurred by an individual for the use of reproductive technologies to conceive a child qualify for the medical expense tax credit.

Budget 2017 expanded the advantage rules, the prohibited investment rules, and the non-qualified investment rules to apply to RESPs and RDSPs.

Budget 2017 repealed the public transit tax credit, effective as of July 1, 2017.

Budget 2017 repealed the home relocation loans deduction, effective as of January 1, 2018.

 

Business Measures

Taxpayers who invest in eligible child care spaces for their employees may claim a 25% investment tax credit for certain costs (not exceeding $10,000 per space).  Budget 2017 repealed this credit, effective for expenditures incurred on or after March 22, 2017.

Budget 2017 eliminated the ability for certain professionals to elect to exclude work-in-progress in determining income from a business for taxation years commencing on or after March 22, 2017, with some transitioning.

 

2017 Fall Economic Statement

On October 24, 2017 the Department of Finance proposed the following changes:

  • Increasing the small business deduction to 18% on January 1, 2018 and to 19% on January 1, 2019.
  • Decreasing the gross-up for non-eligible dividends to 16% for the 2018 taxation year and to 15% for the 2019 and subsequent taxation years.
  • Decreasing the dividend tax credit for non-eligible dividends to 8/11 for the 2018 taxation year and to 9/13 for the 2019 and subsequent taxation years.
  • Indexing the Canada Child Benefit beginning in 2018, instead of the previously legislated 2020.
  • The government will increase the Working Income Tax Benefit by an additional $500 million per year starting in 2019. This increase is in addition to the increase of approximately $250 million that will come into effect in 2019 a part of the enhancement of the CPP.   Further details will be provided in Budget 2018.

OTHER CHANGES

Effective for 2017 and subsequent years, the deduction for Canadian Forces members and police officers participating in deployed international operational missions is available to all who are eligible, regardless of the risk level of a mission.  The threshold has also been increased.

2017 ONTARIO PERSONAL INCOME TAX RATES  (INCLUDING SURTAXES)
Basic Tax Surtax
Rates Brackets
5.05% $0
9.15% $42,201 20% of tax above $4,556
11.16% $84,404 + 36% of tax above $5,831
12.16% $150,000
13.16% $220,000

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