2022 Tax Changes - Personal Income Taxes

2022 Tax Changes - Personal Income Taxes

• First-time home buyers' tax credit - Increased to $10K for qualifying home purchased after Dec. 31, 2021. Note: RRSP withdrawal limit for first-time home buyers' is 35K. 

• Taxable Covid-19 support, CRA will issue T4A slip to report amounts paid to you under taxable programs including Canada Recovery Sickness Benefit (CRSB), Canada Worker Lockdown Benefit (CWLB), and Canada Recovery Caregiving Benefit (CRCB). 

• Home office expense deduction - If you worked more than 50% from home for a period of at least four consecutive weeks in 2022 due to Covid-19 you may be eligible to claim a home office expense deduction. Which gives you two options, temporary flat rate of $2/day, maximum $500. Or the traditional detailed method, discuss with me which option is advantageous to your situation.

 • To be eligible for Climate Action Incentive Payments you must file a personal return. 

2023 Changes:

• TFSA contribution as of January 1, 2023 is $6,500 increased from $6,000 to index with inflation. 

• Residential property flipping rule-Profits arising from disposition of residential property owned less than 12 months are deemed business income. Instead of traditional capital gain which is tax at 50% inclusion rate. 

• Multigenerational Home Renovation Tax Credit - great opportunity for those planning renovations to their homes, credit on expenses up to $50K that are in-relation to building a secondary suite for a family member who is a senior or an adult with a disability.

 • and the First Time Home Savings Account (FHSA rules) - Effective April 1, 2023 asve up to $40,000 tax-free ($8,000/year). Qualifying home purchases are not taxable. Any leftover funds after purchase can be transferred to a RRSP. penalty free. 

Finally, Indexation adjustments: 

• CPP maximum pensionable earnings increased to $66,600 (6.3% indexation) 

• Max EI contribution increased to $1,002.45, while maximum insurable earnings increased from $60,300 in 2022. 

• And RRSP limit increased to $30,780 from $29,201, or 18% of total income whichever is lower.