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Tax return changes for 2016 in Canada

Tax rules change every year and 2016 tax year is no exception. We have consolidated all the tax changes by province for your easy consumption. Review the federal change and the province specific changes applicable to you. If you have any questions, you can Contact Us with subject 'new tax changes'.

Federal Alberta British Columbia Manitoba New Brunswick Newfoundland and Labrador Nova Scotia Ontario Quebec Saskatchewan Prince Edward Island

Federal tax changes in 2016

Auto-fill my return

Starting 2016 tax year, you can download all your tax slips from CRA and automatically fill in parts of your tax return with the information the CRA has available at the time of your request. To use this secure service, you must be signed up and registered with CRA's My Account. This option is available once you sign in and start filing online.

Northern residents deductions (T1: Line 255)

The basic and additional residency amounts used to calculate the northern residency deduction have both increased to $11 per day.

Children's fitness tax credit (T1: Lines 458 and 459)

The maximum eligible fees per child (excluding the supplement for children with disabilities) has been reduced to $500.

Children’s arts amount (S1: line 370)

The maximum eligible fees per child (excluding the supplement for children with disabilities) has been reduced to $250.

Home accessibility expenses (S1: line 398)

You can claim a maximum of $10,000 for eligible expenses you incurred for work done or goods acquired for an eligible dwelling.

Family Tax Cut

The family tax cut has been eliminated for 2016 and later years.

Eligible educator school supply tax credit(T1: Lines 468 and 469)

If you were an eligible educator, you can claim up to $1,000 for eligible teaching supplies expenses.

Dividend tax credit

The rate that applies to “other than eligible dividends” has changed for 2016.

Investment tax credit (S1: Line 412)

Eligibility for the mineral exploration tax credit has been extended to flow-through share agreements entered into before April 2017.

Overseas employment tax credit

Overseas employment tax credit has been eliminated for 2016 on all federal and provincial return.

Labour-sponsored funds tax credit(S1: Lines 413, 414, 411, and 419)

The tax credit for the purchase of shares of provincially or territorially registered labour-sponsored venture capital corporations has been restored to 15% for 2016 and later tax years. The tax credit for the purchase of shares of federally registered labour-sponsored venture capital corporations has decreased to 5%.

Tax on taxable income

The tax rates and income levels have changed. Tax rate has been reduced to 20.5% for income between $45,282 and $90,563. A new tax rate of 33% has been added for income over $200,000.

Split income of a child under 18

The tax rate has increased to 33%.

Sale of principal residence

The sale of a principal residence must now be reported, along with any principal residence designation.

Alberta tax changes in 2016

Change in provincial non-refundable tax credit

Provincial non-refundable tax credits have been increased resulting in more income tax savings and a bigger tax refund for you. Here is the summary of changes:

  • Basic personal amount increased to 18,451 ;
  • Maximum age amount increased to 5,141 ;
  • Spouse amount increased to 18,451 ;
  • Amount for an eligible dependent increased to 18,451;
  • Maximum caregiver amount for dependent increased to 10,681 ;
  • Maximum amount for infirm dependent increased to 10,680 ;
  • Maximum disability amount increased to 14,232 ;
  • Maximum adoption amount for eligible child increased to 12,619 ;

New income tax rates for income over $125,000

Four new tax rates have been added for income over $125,000:

  • Tax rate will be 12% for income between $125,000 and $150,000;
  • Tax rate will be 13% for income between $150,000 and $200,000;
  • Tax rate will be 14% for income between $200,000 and $300,000;
  • Tax rate will be 15% for income greater than $300,000 ;

Dividend tax credit

The rate that applies to “other than eligible dividends” has changed for 2016.

British Columbia tax changes in 2016

Change in provincial non-refundable tax credit

Provincial non-refundable tax credits have been increased resulting in more tax savings for you. Here is the summary of changes:

  • Basic personal amount increase to 10,027 ;
  • Maximum age amount increased to 4,497 ;
  • Maximum spouse amount is now 8,586 ;
  • Maximum amount for an eligible dependent is now 8,586 ;
  • Maximum caregiver amount for dependent increased to 4,387 ;
  • Maximum amount for infirm dependent increased to 4,388 ;
  • Maximum disability amount increased to 7,521 ;
  • Maximum adoption amount for eligible child increased to 15,453 ;

Back-to-school amount - new non-refundable credit

You can claim $250 on line 5846 for each child who is at least 4 years of age and under 17 years of age at the beginning of the tax year.

Farmers' food donation tax credit - new non-refundable credit

Farmers can claim this credit for qualifying food donation to an eligible charity.

The British Columbia seniors' home renovation tax credit is now called the British Columbia home renovation tax credit for seniors and persons with disabilities and is expanded to include persons with disabilities who are eligible for the federal disability tax credit.

Manitoba tax changes in 2016

New tax credit and changes

  • The paid work experience tax credit has changed.

New Brunswick tax changes in 2016

Change in provincial non-refundable tax credit

Provincial non-refundable tax credits have been increased resulting in more tax savings for you. Here is the summary of changes:

  • Basic personal amount increased to 9,758 ;
  • Maximum age amount increased to 4,765 ;
  • Maximum spouse amount and amount for an eligible dependent increased to 8,286 ;
  • Maximum caregiver amount for dependent increased to 4,609 ;
  • Maximum amount for infirm dependent increased to 4,608 ;
  • Maximum disability amount increased to 7,900 ;

Change in provincial tax rate

  • The tax rate on taxable income over $150,000 has decreased to 20.3%;
  • The sixth tax bracket for taxable income over $250,000 has been eliminated.

Change in dividend tax credit rate

The rate used to calculate the dividend tax credit for eligible dividends has increased to 13.5% and has decreased to 3.625% for other than eligible dividends.

Newfoundland and Labrador tax changes in 2016

Temporary Newfoundland and Labrador deficit reduction levy

You may have to pay temporary deficit reduction levy if your taxable income is more than $50,000.

Change in provincial non-refundable tax credit

Provincial non-refundable tax credits have been increased resulting in more tax savings and bigger tax refund you. Here is the summary of changes:

  • Basic personal amount increased to $8,802 ;
  • Maximum age amount increased to $5,619 ;
  • Maximum spouse amount and amount for an eligible dependent increased to $7,192 ;
  • Maximum caregiver amount for dependent and amount for infirm dependent increased to $2,795 ;
  • Maximum disability amount increased to $5,939 ;
  • Maximum adoption amount for eligible child increased to $11,878 ;

Change in dividend tax credit rate

As of July 1, 2016, the rate used to calculate the dividend tax credit for other than eligible dividends has decreased to 3.5%.

Nova Scotia tax changes in 2016

Food bank tax credit for farmers - new non-refundable credit

Farmers can claim this credit for qualifying food donation to an eligible charity.

Change in dividend tax credit rate

The rate used to calculate the dividend tax credit for other than eligible dividends has changed from 3.33%.

Ontario tax changes in 2016

Change in provincial non-refundable tax credit

Provincial non-refundable tax credits have been increased resulting in more tax savings for you. Here is the summary of changes:

  • Basic personal amount increased to $10,011 ;
  • Maximum age amount increased to $4,888 ;
  • Maximum spouse amount and amount for an eligible dependent increased to $8,500 ;
  • Maximum caregiver amount for dependent and amount for infirm dependent increased to $4,719 ;
  • Maximum disability amount increased to $8,088 ;
  • Maximum adoption amount for eligible child increased to $12,214 ;

Change in dividend tax credit rate

The rate used to calculate the dividend tax credit for other than eligible dividends has changed to 4.2863%.

Quebec tax changes in 2016

RénoVert tax credit - new refundable tax credit - line 462 point 32

You can claim tax credit if you or your spouse paid, after March 17, 2016, but before October 1, 2017, eligible expenses for eco-friendly renovation work on your principal place of residence or cottage, provided that such expenses were paid under a contract entered into with a qualified contractor after March 17, 2016, and before April 1, 2017. The tax credit is equal to 20% of the portion of your eligible expenses that exceeds $2,500, up to a maximum cumulative tax credit for 2016 and 2017 of $10,000 per eligible dwelling.

Tax shield - new refundable tax credit - line 460

If your work income increased in 2016, you could be entitled to this tax credit. This credit will offset a part of the loss of the tax credit respecting the work premium and the tax credit for childcare expenses due to increase in work income.

Tax credits respecting the work premium - line 456

The rate used to calculate the maximum amount that may be granted as a work premium for a person living alone or for a couple without children has been raised from 7% to 9% for the work premium and from 9% to 11% for the adapted work premium..

Tax credit for children's activities - line 462 point 25

The maximum eligible registration or membership fees have been increased from $300 to $400 per child, for a maximum tax credit of $80 per child. The maximum tax credit for a child who has a severe and prolonged impairment in mental or physical functions has been increased from $120 to $160.

Deduction for residents of designated remote areas - line 236

The basic and additional housing deductions have been increased from $8.25 to $11 per day, respectively.

Tax credit for workers 64 or older - line 391

The eligibility age for the tax credit for workers has been lowered from 65 to 64. In addition, the maximum eligible work income has been increased from $4,000 to $6,000 for workers 65 or older.

Tax credit for home-support services for seniors

The tax credit rate has been raised from 33% to 34% of your eligible expenses.

Tax credit for caregivers

Tax credit for caregivers has increased to $1,000.

Tax credits for donations and gifts

The total eligible amount of charitable donations and gifts you can use to claim the tax credit is no longer limited to 75% of your net income. The eligible amount of the eligible food product donation to a food bank can be increased by 50% for the purpose of calculating the tax credit.

Gross-up percentage for dividend tax credit rate

the gross-up percentage applicable to ordinary dividends has been lowered from 18% to 17%.

Change in dividend tax credit rate

The rate used to calculate the dividend tax credit for ordinary dividends has been lowered to 8.2485%.

Tax credit for the acquisition of Capital régional et coopératif Desjardins shares

The tax credit rate has been lowered to 40% for shares acquired after February 29, 2016.

Health contribution

Effective July 1, 2016, the health contribution that you are required to pay has been reduced.

Québec prescription drug insurance plan

Maximum premium payable for the entire 2016 taxation year has increased to $650..

Change in provincial non-refundable tax credit

Provincial non-refundable tax credits have been increased resulting in more tax savings for you. Here is the summary of changes:

  • Basic personal amount increased to $11,550 ;
  • Deduction for workers increased to $1,130 ;
  • Age amount on schedule B increased to $2,485 ;

Saskatchewan tax changes in 2016

Change in active families benefit

The active families benefit and Form SK479, Saskatchewan Credits, have been eliminated.

Change in provincial non-refundable tax credit

Provincial non-refundable tax credits have been increased resulting in more tax savings and a bigger tax refund for you. Here is the summary of changes:

  • Basic personal amount increased to $15,843 ;
  • Maximum age amount increased to $4,826 ;
  • .
  • Maximum spouse amount and amount for an eligible dependent increased to $15,843 ;
  • Maximum caregiver amount for dependent and amount for infirm dependent increased to $9,334 ;
  • Maximum disability amount increased to $9,334 ;

Change in dividend tax credit rate

The rate used to calculate the dividend tax credit for other than eligible dividends has decreased to 3.367%.

Prince Edward Island tax changes in 2016

Change in provincial non-refundable tax credit

Provincial non-refundable tax credits have been increased resulting in more tax savings and a bigger tax refund for you. Here is the summary of changes:

  • Basic personal amount increased to $8000 ;
  • .
  • Maximum spouse amount and amount for an eligible dependent increased to $6,795 ;

Change in dividend tax credit rate

The rate used to calculate the dividend tax credit for other than eligible dividends has decreased to 3.05%.