Added, Improved, or Changed by the Budget

The June 6th, 2011  Federal Budget proposed a number of additions, improvements, and changes to existing legislation. The following are some of the items that might apply to you or a family member.

For Young Families

•  Children’s Arts Tax Credit — this new tax credit will benefit parents whose children participate in eligible artistic, cultural, recreational, or developmental activities

•  Child Tax Credit (CTC) — the rule that limits the number of CTC claimants to one per household will be repealed to ensure that sharing a home does not prevent otherwise-eligible parents from claiming the CTC

•  Canada Child Tax Benefit (CCTB) and GST/HST Credit — individuals receiving CCTB will be required to report a change in marital status; and advance payment threshold for CCTB and GST/HST Credit will increase

For Caregivers

•  Family Caregiver Tax Credit — starting in 2012, this new tax credit will be available for caregivers of dependents with a mental or physical infirmity

•  Caregivers will be able to claim an enhanced amount for an infirmed dependent under one of the existing dependency-related credits

•  Infirm Dependant Credit — in 2012, the threshold for phasing out the credit will be increased

•  Medical Expense Tax Credit — the existing $10,000 maximum limit on eligible expenses will be removed

For Volunteers

•  Volunteer Firefighters Tax Credit — a new tax credit will benefit eligible volunteer firefighters

For Students

•  Tuition Tax Credit — the eligible expenses will be expanded to include fees and certain other expenses paid to a qualifying institution for an examination required for a recognized professional status, license, or certification in order to practice in Canada

•  Registered Education Savings Plan (RESP) — similar flexibility between individual RESPs established for siblings will be allowed as currently exists for family plans

•  Education Tax Measures — in order to be eligible for the Tuition Tax Credit, Education Tax Credit, Textbook Tax Credit, and Educational Assistance Payments from a Registered Education Savings Plan, the minimum course duration requirement will be reduced from 13 to 3 consecutive weeks for Canadian students in full-time attendance at a university outside Canada

For Disabled Individuals

•  Registered Disability Savings Plan (RDSP) — earlier access to RDSP savings for those with a physician-certified shortened life expectancy will be allowed (With all the new RDSP rules that have been introduced, we urge anyone who qualifies to contact your Nakamun Advisor)

For Registered Retirement Plan Holders

•  Registered Retirement Savings Plan (RRSP) and Registered Retirement Income Fund (RRIF) — changes to existing anti-avoidance rules for RRSPs and RRIFs will be implemented to curtail certain complex tax planning strategies which purport to enable individual holders to access funds without incurring tax. Be wary of any scheme promising “tax free” withdrawals from RRSPs and RRIFs

•  Individual Pension Plans (IPP) — annual minimum withdrawals from IPPs will be required, similar to current minimum withdrawals required from RRIFs; and past service contributions to IPPs will change

For Taxpayers Income-splitting with Minors

•  New tax rules will apply to certain capital gains, when income-splitting with a minor

For Investors in Mineral Exploration

•  Mineral Exploration Tax Credit — eligibility for this tax credit will be extended for one year to flow-through share agreements entered into on or before March 31, 2012

For Further Information

If one or more of the Budget items apply to you, and you require further information, details are available at www.budget.gc.ca on the Internet.

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em. blair@onyxfinancial.ca

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