Tax Return Changes For 2021 In Canada

Tax rules change every year and 2021 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 Tax Changes

COVID-19 related payments

You may have received federal, provincial, or territorial government COVID-19 payments such as the Canada Emergency Response Benefit. If these amounts are taxable, you will have received a slip, such as a T4A or T4E. They will also be available under My Account on CRA site and can be downloaded automatically using Auto-Fill My Return feature for filing your tax return.

Enhanced Canada Pension Plan/Quebec Pension Plan – Line 22215

Maximum allowable claim for this line has been increased to $290.50.

Federal COVID-19 benefits repayment

If you repaid federal COVID-19 benefits (CERB, CESB, CRB, CRCB, or CRSB) in 2021 that you received in 2020, the amount repaid will be reported in box 201 of your T4A slip or on your T4E slip along with other employment insurance (EI) amounts repaid. You can choose to claim a deduction on your return for the repayment in the year that the benefit was received or in the year that the benefit was repaid. You may also choose to split the deduction between these two returns as long as the total deduction is not more than the amount repaid. You can enter the deduction in Deduction tab under “other deductions”.

Employment Expenses for Working at Home Due to COVID-19 – Line 22900

If you worked from home in 2021 due to Covid-19, you may be able to claim work-space in the home expenses and supplies. You can choose simplified method to claim upto $500 without any receipt or you can choose detailed method with all the receipts to claim work-space in the home expenses and supplies. 

Social benefits repayment – Line 23500

If you received the Canada Recovery Benefit, you may have to repay all or part of it, if your net income after certain adjustments is more than $38,000. The repayment is calculated on the Worksheet for the return at line 23500, as part of the social benefits repayment calculation.

Basic personal amount – Line 30000

This has increased for most taxpayers to $13,808 whose income is less than $151,978. If your income is more than $216,511, you can claim basic personal amount of $12,421.

Spouse or common-law partner amount – Line 30300

This has increased for most taxpayers to $13,229 whose income is less than $150,473. If your income is more than $150,473, maximum for spouse amount will be limited to your basic personal amount.

Amount for an eligible dependent – Line 30400

This has increased for most taxpayers to $13,808 whose income is less than $151,978. If your income is more than $151,978, maximum amount for eligible dependent will be limited to your basic personal amount.

Eligible educator school supply tax credit – Line 46900

For the 2021 and subsequent tax year, the definition of “eligible supplies expenses” has been expanded and the rate the tax credit has been increased to 25% of the eligible supplies expenses upto a maximum of $250.

Climate action incentive

For residents of Ontario, Manitoba, Saskatchewan and Alberta, refundable tax credits will be paid quarterly. You do not have to apply for this on your tax return. You need to submit your tax return before due date to receive this credit.

Canada workers’ benefit – Schedule 6

The Canada workers benefit rates and income thresholds have changed for 2021. A new “secondary earner exemption” has also been introduced.

Alberta tax changes in 2021

Change in dividend tax credit for eligible dividends

The Alberta dividend tax credit rate for eligible dividends decreases from 10% to 8.12% for 2021 and subsequent taxation years.

British Columbia tax changes in 2021

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 11,070 ;
  • Maximum age amount increased to 4,964  ;
  • Maximum spouse amount is now 9,479 ;
  • Maximum amount for an eligible dependent is now 9,479 ;
  • Maximum BC caregiver amount for dependent increased to 4,844 ;
  • Maximum disability amount increased to 8,303 ;
  • Maximum adoption amount for eligible child increased to 16,729 ;

 

Manitoba tax changes in 2021

Change in provincial non-refundable tax credit

  • Basic personal amount increased to 9,936 ;

 

Manitoba seniors economic recovery credit – Removed

This new one-time refundable tax credit has been removed.

Reducing education property taxes

Beginning in 2021, Manitoba will begin phasing out the education property taxes that are included on annual property tax statements by implementing the Education Property Tax Rebate. Existing education property tax offsets including the Education Property Tax Credit and Advance, Seniors Education Property Tax Credit, Seniors School Tax Rebate, School tax credit for homeowners and Farmland School Tax Rebate will be proportionately reduced by 25% in 2021.

Teaching expense tax credit

A new refundable teaching expense tax credit has been introduced. An eligible educator can claim up to $1,000 as an eligible supplies expense. The amount of the refundable tax credit is 15% of the expenses or $150, whichever is less.

Manitoba small business venture capital tax credit for individuals

The lifetime maximum investment for the small business venture capital tax credit has increased from $450,000 to $500,000. New line 60856 has been added to the Form T1256-1 to capture shares issued after April 6, 2021, which will allow a maximum credit of $225,000. The maximum amount of the tax credit that you can apply against provincial tax in the year has increased from $67,500 to $120,000.

Other changes

The cultural industries printing tax credit and community enterprise development tax credit have been extended until the end of 2022.

The book publishing tax credit has been made permanent.

New Brunswick tax changes in 2021

Tax rate change for lowest income tax bracket

For 2021, the tax rate for lowest income tax bracket is reduced from 9.68% to 9.40%

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 10,564 ;
  • Maximum age amount increased to 5,158;
  • Maximum spouse amount and amount for an eligible dependent increased to 8,970  ;
  • Maximum caregiver amount for dependent increased to 4,989 ;
  • Maximum amount for infirm dependent increased to 4,990 ;
  • Maximum disability amount increased to 8,552  ;

Newfoundland and Labrador tax changes in 2021

Physical activity tax credit

A new refundable tax credit has been introduced to allow up to $2,000 per family for the eligible fees paid for registration or membership for a prescribed program of physical activity for qualifying individuals.

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 $9,536 ;
  • Maximum age amount increased to $6,087 ;
  • Maximum spouse amount and amount for an eligible dependent increased to $7,792;
  • Maximum caregiver amount for dependent and amount for infirm dependent increased to $3,028 ;
  • Maximum disability amount increased to $6,435;
  • Maximum adoption amount for eligible child increased to $12,870 ;

 

Nova Scotia tax changes in 2021

Equity tax credit – extension

The equity tax credit for equity investments in community economic development investment funds, which was scheduled to expire on February 28, 2022, is extended for an additional 10-year period to March 1, 2032.

Ontario tax changes in 2021

Childcare access and relief from expenses tax credit (CARE) – Enhanced

For the 2021 tax year, the calculation of the CARE tax credit will be revised to enhance the tax credit by 20%.

Ontario seniors’ home safety tax credit

Effective for tax year 2021 only, this refundable tax credit would provide up to $2,500 to senior homeowners, renters or people who live with relatives who are seniors, in order to allow them to continue to live independently and safely. The new refundable tax credit is 25% of up to $10,000 in eligible expenses made by or on behalf of an eligible individual for the year. The credit can be shared between more than one individual as long as the total of the eligible expenses does not exceed the $10,000 maximum.

Job training tax credit

Effective for tax year 2021 only, the above refundable tax credit would provide up to $2,000.00 to an eligible individual for eligible tuition and other fees paid for courses taken by the individual in 2021. Only an individual, who has a positive Canada training credit limit for the 2021 tax year is eligible for the tax credit. The maximum tax credit will be an amount up to, but not exceeding, the lesser of 50% of the amount allowed on line 32000 on the federal Schedule 11 and $2,000.00.

Apprentice training tax credit – Removed

Effective for 2021 and subsequent tax years, the Ontario apprentice training tax credit has been removed.

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 $10,880 ;
  • Maximum age amount increased to $5,312 ;
  • Maximum spouse amount and amount for an eligible dependent increased to $9,238 ;
  • Maximum caregiver amount for dependent and amount for infirm dependent is $5,128 ;
  • Maximum disability amount increased to $8,790 ;
  • Maximum adoption amount for eligible child increased to $13,274 ;

Prince Edward Island tax changes in 2021

PE Children’s wellness Tax Credit

A new non-refundable children’s wellness tax credit has been introduced to provide up to $500 per qualifying child for all families with children under the age of 18 for eligible activities related to their children’s well-being.

Change in dividend tax credit

Dividend tax credit for non-eligible dividend has been reduced to 1.96%.

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 $10,500 ;
  • Maximum spouse amount and amount for an eligible dependent increased to $8,918 ;

Quebec tax changes in 2021

Deduction for expenses related to working remotely due to COVID-19 – Line 207

If you worked from home in 2020 due to Covid-19, you may be able to claim work-space in the home expenses and supplies. You can choose simplified method to claim upto $500 without any receipt or you can choose detailed method with all the receipts to claim work-space in the home expenses and supplies. 

Tax credit for childcare expenses – Line 455

For a child with a severe and prolonged impairment in mental or physical functions, the limit has been increased from $13,445 to $14,230. For a child born after December 31, 2014, the limit has been increased from $9,825 to $10,400. The tax credit rate brackets have also been changed. Furthermore, under a temporary measure in effect only for 2020 and 2021, you may be eligible for the tax credit for childcare expenses if you received Employment Insurance or COVID-19 benefits.

Senior assistance tax credit – Line 463

For individuals aged 70 or over on December 31, 2021, the maximum amount of the senior assistance tax credit has been increased from $206 to $400 in the case of an eligible individual, and from $412 to $800 in the case of a couple where both partners are eligible individuals.

Deduction for residents of designated remote areas – Line 236

Effective January 1, 2021, if you live in a designated remote area but do not receive any taxable benefits for trips provided by your employer, you can claim a deduction for trips of up to: $1,200 if you live in a northern zone; or $600 if you live in an intermediate zone.

Tax credit for childcare expenses – Line 455

Effective January 1, 2020, what it means to be attending a qualified educational institution has changed for purposes of the tax credit for childcare expenses. Effective January 1, 2020, you can take courses offered by a qualified educational institution at a distance without any virtual presence at a fixed time or interaction with the professor or the class being required. However, presence (either physical or virtual) will remain mandatory for courses offered by a secondary school.

Disability supports deduction – Line 250 Point 7

If you have a disability and you received Employment Insurance benefits (including benefits related to a birth or adoption), Québec parental insurance plan benefits or COVID-19 benefits, you may be able to deduct some of your disability supports expenses.

Change in dividend tax credit – Line 128 and 415

The rate of the dividend tax credit applicable to the actual amount of ordinary dividends went from 5.4855% to 4.6115%.

Tax credits for Capital régional et coopératif Desjardins shares

The rate of the tax credit for the acquisition of Capital régional et coopératif Desjardins shares went from 35% to 30% for shares acquired after February 28, 2021.

Tax credit for volunteer respite services and tax credit for respite of caregivers – removed

Tax credit for respite services (schedule O) has been removed effective Jan 1, 2021.

Tax credit for taxi drivers – line 462 point 3

The maximum tax credit for taxi drivers has been changed to $301.

Quebec prescription drug insurance plan

On July 1, 2021, the contribution rates for the Québec prescription drug insurance plan were increased. Consequently, the maximum premium has been raised from $648 to $662. For the period from July 1 to December 31, 2021, the contribution rates were increased, and the maximum premium was raised from $662 to $710. The maximum premium for 2021 is therefore $686.

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:

  • Deduction for workers on line 201 increased to $1,205 ;
  • Basic personal amount on line 350 increased to $15,728 ;
  • The amount for a person living alone increased to $1,802 on schedule B ;
  • Age amount increased to $3,308 on schedule B ;

Saskatchewan tax changes in 2021

Home Renovation Tax Credit

This non-refundable tax credit is available for eligible expenses incurred. The maximum allowable for tax year 2021 is $11,000. Members of the same family household may share the eligible expenses up to the annual maximum allowable.

Active families benefit

Effective for 2021 and subsequent tax years, eligible individuals with no more than $60,000 of adjusted net family income can claim up to $150 per eligible child for the costs of participation in an eligible activity. If an eligible child is eligible for the disability tax credit, an additional $50 can be claimed.

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 $16,225 ;
  • Maximum age amount increased to $4,942 ;
  • Maximum spouse amount and amount for an eligible dependent increased to $16,225 ;
  • Maximum caregiver amount for dependent and amount for infirm dependent increased to $9,559 ;
  • Maximum disability amount increased to $9,559 ;