Well the new Canadian Economic Budget was released and there is a lot of reading in it. I saved you the time and this is to let you know some key points that will affect you, the basic taxpayer for your 2009 tax filing. So keep scrolling, till a headline catches you.

Tax Relief [...]]]>

Well the new Canadian Economic Budget was released and there is a lot of reading in it. I saved you the time and this is to let you know some key points that will affect you, the basic taxpayer for your 2009 tax filing. So keep scrolling, till a headline catches you.

Tax Relief for Canadians

Budget 2009 proposes significant new personal income tax relief that will provide immediate benefits, particularly for low- to middle-income

Canadians. Specifically, Budget 2009 will increase the basic personal amount and the top of the two lowest personal income tax brackets by 7.5 per cent

above their 2008 levels, effective January 1, 2009.

• The basic personal amount will be increased to $10,320 in 2009 from $9,600 in 2008, allowing individuals to earn more income before paying

federal income tax.

• The top of the first personal income tax bracket will be increased to $40,726 in 2009 from $37,885 in 2008, allowing more income to

be taxed at the lowest 15-per-cent rate, rather than the 22-per-cent rate.

• The top of the second personal income tax bracket will be increased to $81,452 in 2009 from $75,769 in 2008, allowing more income to

be taxed at the 22-per-cent rate, rather than the 26-per-cent rate.

Increases to the National Child Benefit Supplement and Canada Child Tax Benefit

Budget 2009 proposes to apply the new upper limit for the 15-per-cent tax bracket for income testing the National Child Benefit supplement (NCBs) and

the Canada Child Tax Benefit (CCTB). As a result, low-income families will be able to earn an additional $1,894 and still receive the maximum NCBs.

Families will also be able to earn an additional $1,894 before their NCBs is fully phased out or before their base benefit under the CCTB begins to be

phased out. These increases will result in additional benefits for families with income in the current benefit phase-out ranges—up to $436 for a low-income family

with two children, and up to $76 for a middle-income family with two children.

Targeted Tax Relief for Seniors

To provide further tax relief to seniors, the Government is proposing to increase the Age Credit amount by $1,000 for 2009 and subsequent

taxation years. This increase will provide tax savings to about 2.2 million seniors in 2009. With the $1,000 increase, the Age Credit amount for 2009

will be $6,408 and provide tax relief of up to $961 for eligible seniors. The Government will also be proceeding with the proposal announced in

the November 2008 Economic and Fiscal Statement to reduce the required minimum Registered Retirement Income Fund withdrawal for 2008 by

25 per cent. This will provide one-time tax relief of $200 million to seniors, in recognition of the impact of the deterioration in market conditions on

retirement savings.

An Extra Five Weeks of EI Benefits

The EI program exists to provide financial support to Canadians who have lost their jobs. Accordingly, the Government will increase

all regular benefit entitlements by five extra weeks to a maximum of 50 weeks for the next two years at an estimated cost of $1.15 billion.

This five-week extension effectively makes available nationally an enhanced version of the current five-week pilot project that until now has only been

provided in regions with the highest unemployment rates. This will provide all regular EI clients with the reassurance that they will

have financial support for a longer period while they find new employment, should it be required. It will also provide additional income support to

unemployed Canadians who would otherwise have exhausted their benefits.

Long-Tenured Workers

As the global economic slowdown has unfolded, a number of communities across the country have been particularly hard hit. Individuals who have

spent years working in one industry or for one employer now face the prospect of unemployment and the need to retrain for a new job, possibly

in an entirely different industry.

Strategic Training and Transition Fund

Not all Canadians are eligible for EI training. Examples include the self-employed,or those who have been out of work for a prolonged period of

time. These individuals also often require a broader range of programs than EI can provide.

Budget 2009 is providing $500 million for the Strategic Training and Transition Fund to be invested over two years to support the particular

needs of individuals whether or not they qualify for EI. This two-year fund will help to ensure that all Canadians will be able to

access the training and other assistance they need, and should benefit 50,000 more people.

Apprentices

Changing demographics mean that the current shortages of skilled labour in certain parts of the country are expected to continue and potentially expand,

presenting a challenge to maintaining productivity and economic growth. The Government has put in place key initiatives to begin addressing this

challenge. The Apprenticeship Job Creation Tax Credit encourages employers to hire new apprentices and the Apprenticeship Incentive Grant

encourages young people to pursue careers in one of the Red Seal skilled trades.

To build on these measures and further respond to skilled labour shortages, Budget 2009 is providing $40 million a year to launch the Apprenticeship

Completion Grant. Apprentices who complete their certification in any of the Red Seal skilled trades will be entitled to receive a taxable grant

of $2,000. This grant will provide an additional incentive for young Canadians to finish their training and launch rewarding careers in the skilled trades. It will

benefit an estimated 20,000 apprentices each year.

Home Renovation Tax Credit

Home renovations can represent a smart investment in the long-term value of a home and generate broad-based economic activity. They can also reduce

energy consumption and the long-term cost of owning a home. To support economic growth during these challenging times, Budget 2009 proposes

to introduce a temporary Home Renovation Tax Credit (HRTC). The HRTC will provide a temporary incentive for Canadians to undertake

new renovation projects or accelerate planned future projects, thus providingtimely stimulus to the Canadian economy while boosting energy efficiency

and the value of Canada’s housing stock.

How the Temporary HRTC Will Work

The proposed HRTC will provide a temporary 15-per-cent income tax credit on eligible home renovation expenditures for work performed, or

goods acquired, after January 27, 2009 and before February 1, 2010, pursuant to agreements entered into after January 27, 2009. The credit may

be claimed for the 2009 taxation year on the portion of eligible expenditures exceeding $1,000, but not more than $10,000, and will provide up to

$1,350 in tax relief.

Who Can Claim the HRTC

The HRTC will be family-based. For the purpose of the credit, a family will generally be considered to consist of an individual, and where applicable,

the individual’s spouse or common-law partner. Family members will be able to share the credit.

The amount eligible for the credit will be based on the total value of eligible expenditures incurred across all eligible dwellings. A dwelling will generally

be considered eligible if it is used for personal purposes. This will include a house, a cottage, and a condominium unit.

It is estimated that about 4.6 million families in Canada will benefit from the HRTC.

Benefits of the Temporary Home Renovation Tax Credit— Examples

The following examples illustrate how homeowners can benefit from the HRTC.

1. Sally and Ed are a couple who have recently purchased a house. To take advantage of the temporary HRTC, they decide to replace their windows

and improve the insulation in their home in 2009, instead of waiting, incurring $10,000 in expenditures. After taking account of the $1,000

minimum threshold, a 15-per-cent credit will be available on $9,000 in eligible expenditures, providing tax relief of $1,350.

2. William and Marie are a couple who are planning to purchase a more energy-efficient furnace for their home, and build a deck at their cottage

sometime later. To take full advantage of the temporary HRTC, they decide to do both projects in 2009 rather than waiting. They pay $5,000

for the furnace and $3,500 for the deck. They also decide to have the area around the deck landscaped for $2,500, bringing their total costs

to $11,000 ($5,000 + $3,500 + $2,500). Marie claims a credit of $1,350 on the maximum allowable amount of $9,000. This credit is in addition to

the ecoENERGY Retrofit grant that William and Marie expect to receive for installing a more energy-efficient furnace.

3. Karen and Heather are sisters who share ownership of a condominium unit. They each incur $7,500 in expenditures renovating the kitchen in

the condominium, in part to provide access for Heather’s wheelchair. Karen and Heather each claim a $975 credit on eligible expenditures

of $6,500 ($7,500 – $1,000). This credit is in addition to the Medical Expense Tax Credit that Heather may claim on the portion of expenses

eligible for that credit.

Expenditures Eligible for the HRTC

It is proposed that the HRTC be claimed for renovations and alterations to a dwelling or the land on which it sits that are enduring in nature.

For example, homeowners will be able to claim expenditures for major renovation projects such as finishing a basement, renovating a kitchen, or

building an addition. Costs associated with such projects will be eligible for the credit, including permits, professional services, equipment rentals and

incidental expenses. Routine repairs and maintenance normally performed on an annual or more

frequent basis (e.g. cleaning, lawn fertilization, and snow removal) will not qualify for the credit. The cost of purchasing furniture, appliances, audiovisual

electronics and construction equipment will not be eligible. Individuals will need to keep receipts for expenditures, and may claim the

HRTC when filing their income tax returns for 2009. The HRTC will complement support provided by the Government for

Canadians to undertake energy-saving improvements to their homes. Federal grants paid through the ecoENERGY Retrofit program will not reduce the

value of claims made for these expenditures under the HRTC. Eligible renovation expenditures claimed under the Medical Expense Tax Credit

may also be claimed under the HRTC.

Examples of HRTC-Eligible and Ineligible Expenditures

Eligible

• Renovating a kitchen, bathroom or basement

• New carpet or hardwood floors

• Building an addition, deck, fence or retaining wall

• A new furnace or water heater

• Painting the interior or exterior of a house

• Resurfacing a driveway

• Laying new sod

Ineligible

• Purchase of furniture and

appliances (e.g. refrigerator,

stove, and couch)

• Purchase of tools

• Carpet cleaning

• Maintenance contracts (e.g. furnace cleaning, snow removal, lawn care, and pool cleaning)

General renos: Rob Hitchcock (403) 277-3355 or email hitchcocks99@yahoo.ca

General renos and landscaping (decks, etc) Jeremy Ennett (403)870-3282 zotrain@shaw.ca

Electrical : SOS Electric (403) 243-8558 Talk to Scott, Don or Chris soselectric@shaw.ca

And don’t forget you are going to have to get new furniture and stuff for your new room, yard etc.The Consignment Gallery has everything you need at 403-253-7880. www.consignmentgallery.ca

Yes, these are nods to my clients. It is my newsletter after all!

Enhancing the Energy Efficiency of Our Homes

Promoting energy efficiency and conservation is an effective means of reducing energy demand. The ecoENERGY Retrofit program provides

home and property owners with grants of up to $5,000 to offset the costs of making energy-efficiency improvements. Grants apply to a variety

of measures that reduce energy consumption from increasing insulation to upgrading a furnace.

Building on the success of the existing program, Budget 2009 provides an additional $300 million over two years to the ecoENERGY Retrofit

program to support an estimated 200,000 additional home retrofits

So all in all, a lengthy budget but there are things we can all benefit from in it.

Of course most of this will be tweaked as the year goes on, but at least you know what to watch for.

Deb