(File Photo)

(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

Brett Alexander Jones is wanted on several warrants province-wide, in connection with multiple charges. (Kitimat RCMP photo)
Kitimat RCMP searching for man wanted on several warrants province-wide

Jones is described as a five-foot 10-inches Caucasian man, with blond hair and blue eyes.

Bus routes for CMSD82 students in Cablecar and Kitamaat Village have been temporarily changed for Jan. 21 and 22. (Black Press file photo)
Temporary school bus route changes for Cablecar, Kitamaat Village

The two routes will be combined for Jan. 21 and 22 due to a bus driver shortage

Haisla Bridge traffic will be impacted overnights from Jan. 20 to 23 due to District work. (Clare Rayment/Kitimat Northern Sentinel)
Haisla Bridge traffic impacted due to District work

The bridge will be single lane traffic overnights from Jan. 20 to 23

Administering naloxone to a person experiencing a benzo-related overdose event won’t help. Naloxone is used to neutralize opioids. (Jenna Hauck/The Progress file photo)
Northern Health warning drug users of potential benzo contamination

The drug does not respond to naloxone, and is being included in street drugs

Black Press file photo
Fraud scam, car in ditch among weekly Kitimat RCMP report

Kitimat RCMP report from Dec. 18 to 24

Maj.-Gen. Dany Fortin, vice-president of logistics and operations at the Public Health Agency of Canada, speaks at a news conference on the COVID-19 pandemic in Ottawa, on Friday, Jan. 15, 2021. THE CANADIAN PRESS/Justin Tang
B.C. records 500 new COVID-19 cases Wednesday, 14 deaths

Outbreak at Surrey Pretrial jail, two more in health care

(File Photo)
Interior Health says COVID positivity rates in Fernie area actually 10-12%

IH say the rates are not as high as previously claimed by the region’s top doctor

Black bear cubs Athena and Jordan look on from their enclosure at the North Island Wildlife Recovery Association in Errington, B.C., on July 8, 2015. Conservation Officer Bryce Casavant won the hearts of animal lovers when he opted not to shoot the baby bears in July after their mother was destroyed for repeatedly raiding homes near Port Hardy, B.C. THE CANADIAN PRESS/Chad Hipolito
Supreme Court quashes review of B.C. conservation officer who refused to euthanize bears

Bryce Casavant was dismissed from his job for choosing not to shoot the cubs in 2015

Francina Mettes and Thomas Schouten with the 200-page document they submitted in December of 2018. (Travis Paterson/News Staff)
Dutch man, 94, facing unwanted trip home can stay in B.C. with wife of 45 years

Immigration offices cuts red tape so couple of 45 years can stay together in Victoria area

Health Minister Adrian Dix looks on as Dr. Bonnie Henry pauses for a moment as she gives her daily media briefing regarding Covid-19 for the province of British Columbia in Victoria, B.C, Monday, December 7, 2020. THE CANADIAN PRESS/Jonathan Hayward
B.C. Premier, health officials to discuss next steps in COVID immunization plan

Nearly 31,000 doses of vaccine the province expected by Jan. 29 could be curtailed due to production issues

Vancouver Canucks’ Travis Hamonic grabs Montreal Canadiens’ Josh Anderson by the face during first period NHL action in Vancouver, Wednesday, Jan. 20, 2021. THE CANADIAN PRESS/Jonathan Hayward
Horvat scores winner as Canucks dump Habs 6-5 in shootout thriller

Vancouver and Montreal clash again Thursday night

A woman writes a message on a memorial mural wall by street artist James “Smokey Devil” Hardy during a memorial to remember victims of illicit drug overdose deaths on International Overdose Awareness Day, in the Downtown Eastside of Vancouver, on Monday, August 31, 2020. THE CANADIAN PRESS/Darryl Dyck
B.C. paramedics respond to record-breaking number of overdose calls in 2020

On the front lines, COVID-19 has not only led to more calls, but increased the complexity

Eighteen-year-old Aidan Webber died in a marine accident in 2019. He was a Canadian Junior BMX champion from Nanaimo. (Submitted)
Inadequate safety training a factor in teen BMX star’s workplace death in 2019

Aidan Webber was crushed by a barge at a fish farm near Port Hardy

Most Read