(File Photo)

Lower taxes, new RRSP rules among 2020 changes in Canada

$75 credit for digital news subscriptions and Alberta now has a federal carbon tax

Federal changes coming into effect Jan. 1 will lower taxes for most Canadians and affect retirees, recently separated individuals who want to use their retirement savings to buy a home, and digital news consumers.

The basic amount most Canadians can earn tax-free is going up on Jan. 1, resulting in slightly lower federal income taxes.

The increase in the basic personal amount was promised by the Liberals during the federal election campaign and is being phased in over four years until it reaches $15,000 in 2023.

For this year, the exemption amount will increase from $12,069 to $13,229. That will result in federal income tax savings of $113 in Quebec and $138 in the rest of Canada, according to the Canadian Taxpayers Federation.

The benefit will be lower for anyone earning more than $150,473 during the year and will be reduced to zero for Canadians with incomes above $214,368.

The tax cut will also be offset on individual paycheques by an increase in Canada Pension Plan premiums of up to $97, the CTF calculated. At the same time, employment insurance premiums will decrease, producing savings of about $20 for workers outside of Quebec, where the EI premium benefit will add up to $48 for some individuals.

Overall, residents of Ontario and Quebec earning less than $100,000 annually will see net savings of between $55 and $116, the federation estimated.

Also effective Jan. 1, Canadians experiencing a breakdown in their marriage or common-law partnership can qualify to withdraw money from their registered retirement savings plan, without incurring a tax penalty, to buy a home.

The Finance Department said individuals who make a withdrawal in the year a breakup occurs, or in the four preceding calendar years, can access the Home Buyers’ Plan, even if they are not a first-time home buyer.

It allows first-time home buyers to withdraw up to $35,000 from an RRSP to put toward a down payment without having to pay tax on the withdrawal.

KEEP READING: Hiking carbon tax to $210 cheapest way to hit Canada’s climate targets, commission says

Among the other federal tax changes coming into effect:

— Canadians who pay up to $500 for digital news subscriptions can apply for a $75 tax credit.

— Certain journalism organizations operating as not-for-profits will be allowed to register to receive donations from Canadians who can claim the amount for a charitable donation tax credit. Businesses donating money can also apply for tax savings.

— Two new types of annuities are being permitted under the tax rules for certain registered plans to provide Canadians with greater flexibility in managing their retirement savings.

— And, the federal carbon tax is being implemented in Alberta. The $20-per-tonne charge for carbon emissions will add to the cost of gas, diesel and heating fuels. Albertans had been paying a provincial carbon tax until it was abolished by the UCP government less than two months after the party won the Alberta election in the spring. Canadians in other provinces are already paying some form of carbon tax.

Terry Pedwell, The Canadian Press

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

City of Terrace’s public consultation budget meeting sees one-person turnout

75 per cent of tax increase earmarked for new city staff

Expect delays on Nisga’a Highway 113

Avalanche control work is planned between Laxgalts’ap and Gingolx

B.C. premier talks forestry, service needs with handful of northern mayors in Prince George

Prince George meeting completes premier’s tour of Kitimat, Terrace, Fort St. James and Quesnel

Indigenous LNG supporters chide human rights advocates over pipeline comments

Coastal GasLink has signed agreements with 20 elected First Nation councils along the pipeline’s 670-kilometre path

Four things ‘not’ to do if you run into Prince Harry and Meghan in B.C.

Here is a list of some things you definitely should NOT do, according to the BBC

B.C. RCMP spent roughly $750K on massive manhunt for Port Alberni men

Manitoba RCMP helped with 17-day search through the province’s northern terrain

Future space homes could be made of mushrooms

NASA explores use of fungi to build structures in space

Man killed by police in Lytton called 911, asking to be shot: RCMP

Howard Schantz, also known as Barry Schantz was killed following a standoff at his Lytton home

Canadian public health agencies ramping up preparations in response to new virus

Health officials have said there are no confirmed cases of the emerging coronavirus in Canada

‘Naughty boy’: Monty Python star Terry Jones dies at 77

The comedian has been suffering from a rare form of dementia

Theo the 800-pound pig trimmed down and still looking for love on Vancouver Island

“He’s doing really well, lost quite a few pounds and can run now.”

Horgan unveils B.C. cabinet shuffle changes

Premier John Horgan has made three major changes to his cabinet

Most Read