The budget highlights below are not comprehensive and only refer broadly to some of the changes that have been made in the budget. For a complete review of the 2011 budget, please direct yourself to the official government website.
BUSINESS
· Charities
o Monetary penalties and suspension of receipting privileges for charities who issue improper donation receipts.
· Hiring Credit
o A one-time temporary hiring credit is available to employers with total employment insurance premiums of $10,000 or less. This credit of up to $1,000 has been introduced on the excess of 2011 employment insurance premiums over those paid in 2010.
· Changes in Accelerated CCA
o Clean Energy Generating Equipment
§ Class 43.2 has been expanded to include clean energy generation equipment that has been acquired on or after March 22, 2011. Depreciation will be at 50% on a declining basis.
o Manufacturing and Processing Equipment
§ Class 29 manufacturing and processing equipment acquired between March 18, 2007 and before 2014, are able to be depreciated at a 50% CCA rate on a straight-line basis, subject to the half year rule. Subsequent to 2013, the rate will be decreased to 20%.
· Stub Period- Corporate Deferrals With Use of Partnerships
o New rules to limit deferral opportunities for corporations with involvement in partnerships. Income earned in a fiscal year by the corporation for its participation in a partnership will need to be claimed on a calendar year basis. Therefore income will need to be accrued for the income from the partnership for the portion of the year that falls within the corporate tax year.
INDIVIDUAL
· Changes To Tax Credits
o Family Caregiver Tax Credit
§ New non-refundable tax credit at 15% of $2,000. This credit is available to caregivers of infirm dependent relatives.
o Medical Expense Tax Credit
§ Currently there is a cap of $10,000 on medical expenses that caregivers can claim for dependent relatives. The budget proposes to remove this limit to years beginning in 2011.
o Child Tax Credit
§ Changes to the current legislation to repeal the limit of one claimant per household. This will allow for multiple families sharing a home to each claim this credit.
o Tuition Tax Credit
§ Changes to the credit that will allow for fees paid to an education institution, provincial ministry, professional association or similar institution to be recognized.
§ Tuition abroad will now be eligible for programs that are three consecutive weeks, instead of the former 13 weeks.
§ Certain exam fees are now tax deductible such as purchase of examination materials, lab coats, calculators, etc.
o Children’s Arts Tax Credit
§ New non-refundable tax credit at 15% of $500 for children under 16 years of age at the start of the tax year. Eligible activities include arts, cultural, recreational and developmental activities. This credit is available for tax years beginning in 2011.
o Volunteer Firefighters Tax Credit
§ Volunteer firefighters are now able to claim a 15% non-refundable tax credit at a base rate of $3,000.
o RESP Transfers
§ Changes to RESPs will allow for subscribers of separate plans to allocate assets among siblings.
· Guaranteed Income Supplement (GIS)
o Seniors will receive increase GIS payments.
· Registered Disability Savings Plan (RDSP)
o Individuals with shortened life expectancies will be allowed to withdraw annual amounts without triggering the ten year repayment rule. This is to allow for these individuals to more easily access their funds.
· RESP Transfer
o Changes to RESPs will allow for subscribers of separate plans to allocate assets among siblings.
· Individual Pension Plan
o The budget proposes that minimum withdrawals be made from the IPP on an annual basis.
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