Corporate Income Tax, Personal Income Tax, Small Business

2019 Federal Budget Commentary

The Federal Government released their budget for 2019 on March 20, 2019 and after a couple years of changes to the tax system for businesses with the expansion of the Tax on Split Income (“TOSI”) rules, there are a some  improvements for small businesses in a few select areas.

Please note that all of the comments below are broad strokes and there may be nuances that apply to your specific situation.  If you have any specific questions, I would be happy to discuss how these changes may apply.

Some highlights for businesses:

  • Zero-emission vehicles (electric) purchased after March 19, 2019, will now be eligible for a 100% deduction rather than being subject to the usual 30% deduction rate, and the limit for these vehicles has been increased to $55,000.  A zero-emission vehicle is defined as a plug-in hybrid with a battery capacity of at least 15 kWh, or fully powered by hydrogen.  The limit for conventional vehicles remains at $30,000 where it has been for as long as I can remember.
  • Manufacturing and processing equipment purchased after November 20, 2018 are now eligible for a 100% deduction in certain cases.
  • Specified clean energy equipment purchased after November 20, 2018 will also be eligible for a 100% deduction in certain cases.
  • Scientific Research and & Experimental Development (SR&ED) has been enhanced to 35% from the 15% federal tax credit
  • The mineral exploration tax credit has been extended from March 31, 2019 to March 31, 2024.

Some highlights for individuals:

  • Home buyer’s plan (HBP) program which allowed individuals to essentially borrow from their RRSP has been increased to allow a maximum withdrawal of $35,000, up from $25,000.
  • Through new Canada Training Credit, Canadians between 25 and 64 will now earn a credit of $250 each year.  This credit accumulates and will be refundable and used in place of the tuition credit which is non-refundable.
  • Registered Disability Savings Plans, previously collapsed when the beneficiary was no longer eligible for the disability tax credit.  It seems this requirement has been removed for years after 2020.
  • Donation sto Qualified Canadian Journalism Organizations will receive a 15% non-refundable credit on costs for eligible digital subscriptions.

 Click here to view the 2019 CPA Canada Federal Budget Commentary

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