What’s new for Canadian taxes in March 2022
April 5, 2022
Let’s review what’s new with the Canada Revenue Agency (CRA), Revenu Québec, and H&R Block this month which might affect your tax situation. This monthly update includes:
- New feature! Self-employed tax toolkit added to PROTECTION package in DIY tax software
- One-time payment of $500 for many Québec residents
- The Climate action incentive (CAI) rebate is now the climate action incentive payment (CAIP)
- Additional guaranteed income supplement (GIS) payment coming soon
- The deadline to file your 2021 taxes is May 2, 2022
- Important changes to the Canada Workers Lockdown Benefit (CWLB) and Local Lockdown Program
- New luxury tax on cars, aircrafts, and boats
New feature! Self-employed tax toolkit added to PROTECTION package in DIY tax software
If you’re self-employed, filing your return just got a little easier! We’ve simplified the process of preparing your statement of business and professional activities (T2125 and TP-80-V) with our new self-employed tax toolkit.
Take advantage of a guided workflow and other features that make it simpler to file, including:
- Add information from your tax slips (T4, T4A, RL-27, and more) directly into your statement of business and professional activities
- Use expense calculators to get the most accurate deductions for your work expenses
- Check your refund amount in real time
- And more!
One-time payment of $500 for many Québec residents
A new tax credit has been announced for Québec residents to help with the rising cost of living. Québec residents who have a net income of less than $100,000 will receive a $500 refundable tax credit when they file their 2021 return.
If your net income was over $100,000 but less than $105,000, the $500 tax credit will be reduced by 10% on the part of your income that’s over $100,000. For example, if your net income is $103,000:
$100,000 (income threshold) - $103,000 (your net income) = $3000
$3000 (the amount of income over $100,000) x 10% = $300
$500 (original tax credit amount) - $300 (the amount your credit is reduced by) = $200
This means if your net income is $103,000, you’re eligible for a $200 tax credit.
Keep in mind, this tax credit is only available for 2021 returns. It’s also worth keeping in mind that if you owe taxes this year, you can use this credit to lower the total amount you owe.
The Climate action incentive (CAI) rebate is now the climate action incentive payment (CAIP)
The CAIP can’t be claimed as a refundable tax credit starting in tax year 2021. Instead, you’ll receive tax-free payments in April, July, October, and January. You’ll receive your first payment in July 2022, which will include the CAIP amount you’re owed from April 2022. The next payments will be in October and January 2023.
You’ll need to file your 2021 return to be eligible for the CAIP, even if you have no income to report.
The eligibility for the CAIP is still based on your province, age, and family situation. However, starting in tax year 2021, you’ll need to be at least 19 by December 31 to be eligible. In previous years, you needed to be 18 by December 31 to be eligible for this amount.
How much will I receive?
If you’re eligible for the CAIP, you’ll receive one or more of the following amounts based on your situation:
*These amounts don’t include the 10% supplement for residents of small and rural communities.
To learn more about the CAIP, visit the H&R Block Online Help Centre.
Additional guaranteed income supplement (GIS) payment coming soon
In July 2021, an estimated 183,000 guaranteed income supplement (GIS) and 21,000 Allowance recipients discovered their GIS payment was lowered because they received the Canada Emergency Response Benefit (CERB) in 2020. The government announced earlier this year that it will be sending an additional one-time payment to those affected by the lowered rate.
If you’re eligible, you’ll receive your one-time payment by April 19, 2022. Details about how the top-up payment will be calculated are coming soon.
The deadline to file your taxes is May 2, 2022
The deadline to file your 2021 return is April 30, 2022. Since the deadline date falls on a weekend this year, you have until the next business day to file, which is May 2, 2022. Beginning May 3, 2022, the CRA and Revenu Québec will start charging late-filing penalties and adding interest to any amount you owe.
If you’re self-employed, your deadline to file is June 15, 2022. Keep in mind that if you owe taxes, your payment is still due on May 2, 2022.
If you and your spouse or common-law partner are preparing your returns together and only one of you is self-employed, you can file both returns by June 15, 2022 as long as any balance owing is paid by May 2, 2022.
Important changes to the Canada Workers Lockdown Benefit (CWLB) and Local Lockdown Program
On March 12, 2022, important changes were made to the Canada Workers Lockdown Benefit (CWLB) and Local Lockdown Program.
Starting on March 12, 2022, the CWLB is only available to employees who can’t work because of government imposed public health lockdowns. The CWLB and Local Lockdown Program will still be in effect until May 7, 2022, but only for those who meet the changed eligibility criteria.
The subsidy available through the Local Lockdown Program has been lowered. Businesses who are limited to at least 50% of their capacity are eligible for a subsidy of 25% of their wage and rent costs. The previous subsidy rate was 75%.
New luxury tax on cars, aircrafts, and boats
Starting September 1, 2022 a new luxury tax will be added to the sale of luxury items, including:
- Cars and aircrafts that sell for more than $100,000; and
- New boats over $250,000.
If you buy a luxury item, you’ll be taxed whichever amount is less:
- 20% of the retail price over $100,000; or
- 10% of the full value.
For example, if you buy a new car for $110,000:
$110,000 (retail price you paid) - $100,000 (threshold) = $10,000;
$10,000 (amount you paid that’s over $100,000) x 20% = $2000;or
$110,000 (the total retail price you paid) x 10% = $11,000.
Because $2000 is less than $11,000, you’ll pay $2000 as the new luxury tax.
Keep in mind, the GST/HST you owe is based on the total price of your item, including the new luxury tax. For example, if you purchased a car for $110,000 and owe luxury tax, bringing the total cost to $112,000, you’ll be charged GST/HST on the total cost of $112,000.
Ready to file? H&R Block can help you get through this year’s tax changes. Choose from one of four convenient ways to file: File in an Office, Drop-off at an Office, Remote Tax Expert, or Do It Yourself Tax Software.