Manitoba’s 2017-2018 tax budget brings in new credits and wipes out others

 

Provincial tax rates in Manitoba are staying consistent for the 2017-2018 tax year, but there are other changes that residents need to know about. If you’re an unpaid caregiver, a post-secondary graduate, a parent, or a manufacturer the changes pertain to you. Several tax credits are being eliminated this year as well, so you’ll want to take note of those.

Making good on a promise
Last year the government announced that tax bracket thresholds and the basic personal amount would be raised due to inflation in 2017. They have followed through, implementing a 1.5% raise this year. The chart below outlines the differences in tax bracket thresholds from 2016 to 2017. The basic personal amount has increased from $9,134 to $9,271 but remaining personal amounts are unchanged.

BC Medical Services Plan Changes in Monthly Premiums
Single Taxpayers
2009 to 2016 2017
10.8% of taxable income up to $31,000 10.8% of taxable income up to $31,465
12.75% of taxable income between $31,000 and $67,000 12.75% of taxable income between $31,465 and $68,005
17.4% of taxable income in excess of $67,000 17.4% of taxable income in excess of $68.005

Keep the kids active and creative too
While the federal government has done away with the Children’s Fitness and Arts amounts, the provincial government has kept both credits in place, so you’re still able to claim those expenses on a provincial level.

Get the numbers on education and tuition fees
Most provinces have followed the federal government’s lead in eliminating education and textbook amounts for the 2017 tax year. In fact, Ontario and New Brunswick have gone a step further and eliminated the tax credit for tuition fees as well. In Manitoba, both tuition fees and the education amount have stayed the same.

Phasing out tuition rebates for post-secondary grads
Although the education amount and tuition fees credits are being kept in the budget this year, Manitoba is phasing out the Tuition Fee Income Tax Rebate – a popular program that allows post-secondary graduates to get up to 60% of their tuition fees refunded over a period of 10 years, as long as they remained residents of the province.
For 2017, the annual cap an individual graduate can claim on this program is the lesser amount of either 10% of eligible tuition fees, or $500.

This rebate will be fully eliminated in 2018. No further rebate credits may be claimed and any unclaimed rebate credits will lapse. The Tuition Fee Income Tax Rebate Advance will also be eliminated, effective on tuition fees paid for school terms after April 2017.

Credit for caring for those in need
The Primary Caregiver Tax Credit recognizes the vital support caregivers provide to those need. You can claim the credit even if you don’t have taxable income. To be eligible, you must provide long term care for someone assessed as needing it at Level 2 or higher, who lives in a private home in Manitoba within an RHA area. You must live in Manitoba yourself, and receive no pay for the care you provide. Lastly, you must be designated as the primary caregiver by the person receiving the care.

Prior to 2017, the maximum credit that could be claimed under this program was $1,400 per care recipient, with a maximum of three recipients in total. Effective this year, the limit of three recipients is removed but the maximum claim for each recipient stays at $1,400.

Eligibility for the credit will now begin in the year that the application is submitted to the Regional Health Authority or the Department of Families. Retroactive claims are not permitted, however, going forward, if an application is submitted in 2017 and the credit is not claimed until 2019, the caregiver may still claim the credit for both 2017 and 2018.

Back your party
The Political Contribution Tax Credit is increasing from $1,275 to $2,325 in 2017, increasing the maximum credit from $650 to $1,000 as shown below.

Year Contribution Credit Rate Maximum Credit
2017 $0 to $400
$401 to $750$751 to $1,275

75%
50%

331/3

$300
$175
$175Total:    $650
2018 $0 to $400
$401 to $750$751 to $2,325

75%
50%

331/3

$300
$175
$525Total:    $1,000

Dollars back on R&D
The Research and Development Tax Credit (which is available only to corporations) has been reduced from 20% to 15% effective for eligible expenditures made after April 11, 2017.

Money for manufacturing equipment
Qualifying manufacturing equipment or property that is acquired after April 11, 2017 will be eligible for a 1% claim under the non-refundable portion of the Manufacturing Investment Tax Credit. This program is only available to corporations, and the rate has been reduced this year – down from 2%.

Say goodbye to certain tax credits
There’s quite a list of credits that are no longer part of the Manitoba budget as of April 12, 2017. Not great news, but the upside is that unused credits from prior years on any of these policies can still be carried forward.

Discontinued Tax Credits include:
• Co-operative Development Tax Credit
• Odour Control Tax Credit
• Nutrient Management Tax Credit
• Riparian Tax Credit
• Neighbourhoods Alive! Tax Credit
• Data Processing Investment Tax Credit

There’s good news too. Tax credits listed below, which would otherwise have expired by now, have all been extended:

• Manufacturing Investment Tax Credit (extended to December 31, 2020)
• Mineral Exploration Tax Credit (extended to December 31, 2020)
• Book Publishing Tax Credit (extended to December 31, 2018)
• Interactive Digital Media Tax Credit (extended to December 31, 2022)

Big or small, tax rates for businesses remain untouched
Last, but certainly not least, the small business tax rate remains at 0% for active businesses with an income of up to $450,000. The general corporate tax rate has remained the same too – standing steady at 12%.