Bill C-8 has passed: How does it support individuals and businesses?

What does this mean?

The Canada Revenue Agency (CRA) put processing on hold for 2021 Personal Income Tax Returns (T1) that included a claim for the Eligible Educator School Supply Tax Credit or the new Return of Fuel Charge Proceeds to Farmers Tax Credit. Now that Bill C-8 has been enacted, the CRA should start processing these returns and issuing refunds where applicable. Similarly, eligible taxpayers who did not claim these credits in their original return should now be able to file a T1 adjustment with the CRA.

Under the new legislation, starting in 2021 the refundable Eligible Educator School Supply Tax Credit has been increased from 15 per cent to 25 per cent with up to $1,000 in eligible expenditures. Furthermore, eligible supplies purchased to teach from an online platform due to COVID-19 may qualify when previously, they needed to be used in the classroom. Also, the list of eligible durable goods has expanded to include certain electronic devices, however some devices such as laptops and tablets must only be available to the educator to use in the classroom to qualify.

Starting in 2021, the Return of Fuel Charge Proceeds to Farmers Tax Credit is a new refundable credit for eligible farming businesses—including self-employed farmers actively engaged in earning income from farming with total farming expenses of at least $25,000—located in Ontario, Manitoba, Saskatchewan, and Alberta. It’s intended to refund a portion of the federal carbon pollution pricing system to farming businesses in provinces that don’t have a system that meets the federal requirements.

What other measures are in Bill C-8?

• Underused Housing Tax – a new annual 1 per cent tax for 2022 and onwards on the value of residential real estate located in Canada that is directly or indirectly owned by non-resident non-Canadians and is vacant or underused (subject to certain exemptions). The new Underused Housing Tax return and the related taxes owing are due April 30th each year.
• Small Businesses Air Quality Improvement Tax Credit - a temporary refundable tax credit for eligible taxpayers—including certain small Canadian-controlled private corporations (CCPCs) and unincorporated sole proprietors—for qualifying ventilation expenditures to improve air quality, up to a certain limit. The eligible expenditures must be incurred between September 1,2021 and December 31, 2022 and the credit is generally taxable the year it’s claimed.
• Extending the Northern Residents Deduction – gives qualifying northern residents the option to claim up to $1,200 in eligible travel expenses, including individuals who do not receive travel assistance from their employer.

Takeaway

If you need help navigating these tax credits or have any questions, our advisors are here to help you—reach out to us here.

^Disclaimer

^{The information contained herein is general in nature and is based on proposals that are subject to change. It is not, and should not be construed as, accounting, legal, or tax advice or an opinion provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, specific circumstances or needs and may require consideration of other factors not described herein.}