Small business deduction limit is increased
$400,000 to $500,000 as of January 1,
2009. Tax savings of (28% - 11%) x
(500,000-400,000) = $7,000, maximum.
Canadian Controlled Private Corporations
(“CCPC”) - The enhanced investment tax credit
for SR&ED will claw-back at $500,000
(previously $400,000). Additional refund of
15% x (500,000-400,000) = $15,000,
maximum.
Employment insurance to be frozen at $1.73
per $100 of insurable earnings for 2009 and
2010.
Fast write off of machinery used
Manufacturing and Processing (class 29 and
class 50)
50% straight line CCA rate for machinery
and equipment used primarily for
manufacturing or processing goods for sale or
lease, which was to expire in 2010, will
continue to apply for eligible assets acquired
in 2010 and 2011. The half year rule will
continue to apply.
Fast write off Computer Equipment, after
January 27, 2009 and before February 2011
will be eligible for a 100% write off rate.
First year half year rule will NOT apply.
Home Buyers’ Plan - withdrawal from
RRSP’s available to first time home buyers
to finance the purchase of a home will be
increased from $20,000 to $25,000. This will
apply to withdrawals after 27th January 2009.
A non-refundable credit of up to $750 (15%
of $5,000) will be available to first time home
buyers who complete the purchase of a home
qualifying for the $25,000 withdrawal from
RRSP
Home Renovation Tax Credit - A temporary
15% non-refundable tax credit of 15% of the
eligible expenditures in excess of $1,000 and
not more than $10,000 incurred between
January 27, 2009 and before February 1,
2010, resulting in a maximum credit of
$1,350. This non-refundable credit can only
be claimed in the individuals’ 2009 tax return
and also applies to renovations contracted prior
to 28th of January 2009.
Basic personal amount will be increased from
$9,600 in 2008 to $10,320 for 2009. Tax
savings of (10,320-9,600) x 15% = $108,
maximum.
The upper limit of the first personal tax
bracket of to which Federal Tax of 15%
applies will be increased to $40,726 from
$37,885 in 2009. Tax savings of (40,726-
37,885) x 7% = $198.80, maximum.
The upper limit of the second personal income
tax bracket of 22% will be increased to $81,452
from $75,769 in 2009. Tax savings (81,452-
75,769) x (26%-22%) = $227.32 maximum.
The income levels on which eligibility for
benefits under the Canada Child Tax Benefit
and the National Child Benefit Supplement
are based will be increased so that the income
level at which the phase-out of both benefits
begins will be increased to $40,726.
Penalty for late filing of information returns
(T4, T5 etc ) reduced from $25 per day to $10
per day and a maximum of $2,500 to a
maximum of $1,000 for entities filing less
than 50 returns.
Losses in RRSP/RRIF after the death of an
annuitant and before the distribution of funds
can be carried back to the year of income
inclusion. This provision will apply effective
2009.
Note:
This newsletter cannot replace professional
advice. The reader is invited to contact the writer to
discuss the contents of the newsletter. Readers are
advised to seek professional advice before acting on the
material in this newsletter.
