(File Photo)

Lower taxes, new RRSP rules among 2020 changes in Canada

$75 credit for digital news subscriptions and Alberta now has a federal carbon tax

Federal changes coming into effect Jan. 1 will lower taxes for most Canadians and affect retirees, recently separated individuals who want to use their retirement savings to buy a home, and digital news consumers.

The basic amount most Canadians can earn tax-free is going up on Jan. 1, resulting in slightly lower federal income taxes.

The increase in the basic personal amount was promised by the Liberals during the federal election campaign and is being phased in over four years until it reaches $15,000 in 2023.

For this year, the exemption amount will increase from $12,069 to $13,229. That will result in federal income tax savings of $113 in Quebec and $138 in the rest of Canada, according to the Canadian Taxpayers Federation.

The benefit will be lower for anyone earning more than $150,473 during the year and will be reduced to zero for Canadians with incomes above $214,368.

The tax cut will also be offset on individual paycheques by an increase in Canada Pension Plan premiums of up to $97, the CTF calculated. At the same time, employment insurance premiums will decrease, producing savings of about $20 for workers outside of Quebec, where the EI premium benefit will add up to $48 for some individuals.

Overall, residents of Ontario and Quebec earning less than $100,000 annually will see net savings of between $55 and $116, the federation estimated.

Also effective Jan. 1, Canadians experiencing a breakdown in their marriage or common-law partnership can qualify to withdraw money from their registered retirement savings plan, without incurring a tax penalty, to buy a home.

The Finance Department said individuals who make a withdrawal in the year a breakup occurs, or in the four preceding calendar years, can access the Home Buyers’ Plan, even if they are not a first-time home buyer.

It allows first-time home buyers to withdraw up to $35,000 from an RRSP to put toward a down payment without having to pay tax on the withdrawal.

KEEP READING: Hiking carbon tax to $210 cheapest way to hit Canada’s climate targets, commission says

Among the other federal tax changes coming into effect:

— Canadians who pay up to $500 for digital news subscriptions can apply for a $75 tax credit.

— Certain journalism organizations operating as not-for-profits will be allowed to register to receive donations from Canadians who can claim the amount for a charitable donation tax credit. Businesses donating money can also apply for tax savings.

— Two new types of annuities are being permitted under the tax rules for certain registered plans to provide Canadians with greater flexibility in managing their retirement savings.

— And, the federal carbon tax is being implemented in Alberta. The $20-per-tonne charge for carbon emissions will add to the cost of gas, diesel and heating fuels. Albertans had been paying a provincial carbon tax until it was abolished by the UCP government less than two months after the party won the Alberta election in the spring. Canadians in other provinces are already paying some form of carbon tax.

Terry Pedwell, The Canadian Press

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Langley author pens Somebody’s Story

Bryan Bellec’s debut coming-of-age novel was inspired by upbringing in Fraser Valley

LETTERS: Public ignoring COVID rules in Langley park

What lessons do children learn when people ignore safety precautions?

Rideshare expands into eastern Langley

As of Thursday, Lyft is now offering service throughout Metro Vancouver

LETTER: Langley man wants to see bank machine cleaned

The ATM is a high-touch spot that should be cleaned frequently, a local man argues

Langley Eats Local challenge promotes homegrown foods and products this summer for 11th year

Residents encouraged to participate in farm gate passport program in a bid to buy local

Horgan says B.C. restart making gains as more people come out of their homes

B.C. announced the easing of more restrictions on businesses, recreation and travel last month

Conservatives say police should be called into investigate WE charity scandal

Trudeau is already under investigation by the ethics commissioner for potential conflict of interest

Amber Alert continues for missing Quebec girls, 6 and 11, and their father

Police issued the alert for Norah Carpentier, 11, and Romy Carpentier, 6, from Levis, Que.

Limit police access to lethal weapons in Indigenous communities: Justice Summit

Grassroots-organized National Indigenous Justice Summit was a free-to-attend two-day videoconference

Wanted Burnaby man arrested in White Rock

34-year-old facing 15 charges, including sexual assault

Canadian policing organization calls for decriminalization of simple illicit drug possession

Canadian Association of Chiefs of Police want policing focus of opioid crisis to be replaced with a health one

Filing deadline in RCMP sexual-harassment class-action extended due to COVID-19

Plaintiffs now have until January 2021 to submit claims for up to $222,000

Hefty undeclared driver charges piling up, ICBC warns customers

Average extra penalty $2,971 after an at-fault accident

Survey, hotline launched amid probe into racist blood-alcohol guessing game at B.C. hospital

Mary Ellen Turpel-Lafond has been appointed to lead an investigation by Health Minister Adrian Dix

Most Read