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Did You Know…Collecting GST

You can start collecting the Goods and Services Tax Credit (GST) starting with the first quarterly payment that is issued after you have turned 19. For instance, if your 19th birthday falls in August, your first payment will be issued in October. You must file a tax return for the previous year in order to receive the credit. A student earning less than $8,965 in the previous year will receive a total quarterly credit of $95.87, included the British Columbia Low Income Climate Action Tax credit (BCLICATC).

New Donors Given More Credit

Money the feds won't suck backNewcomers to the practice of making annual charitable donations are being rewarded by the federal government. Taxpayers making charitable donations after March 21, 2013 may be eligible for a First-Time Donor’s Super Credit (FDSC). The FDSC can be used by a taxpayer if they or their spouse have not claimed a donation credit at any time during the previous five years and gives the donations an elevated tax credit value.

Currently, total donations up to $200 will earn you a federal credit of 15% (20.06% with the provincial credit). Total donations in a year of more than $200 earn a federal credit of 29% (43.7% total). These rates mirror the lowest tax rate for the credit below $200, and the highest tax rate for the credit above $200. The new super credit will increase the value of the federal percentage to 40% (45.06% total) for donations up to $200, and 54% (68.7%) for donations between $200 and $1,000. This credit will be available until 2018.Note that donations are non-refundable credits, so you will only receive the benefit of the credit up to the point where it reduces your federal tax to zero. You can carry forward any unused donations for five years if you are unable to claim them in the current year.

Provincial credits on donations will not change. Furthermore, when the temporary increase in the highest tax bracket
starts in 2014, there will not be a corresponding increase in the highest donation credit in British Columbia.

The highest provincial donation credit will continue to sit at 14.7%.

Autumn newsletter highlights new renovation tax credit

The provincial government is encouraging seniors to make their home more accessible and safe, by offering a new home renovation tax credit.  Clients should speak with their accountants in order to utilize this opportunity for cash-back on home-related expenditures.

Also, seniors who travel south each year may want to tell their local CGA the number of days they are vacationing in the United States, as this could trigger the need to file a form with the IRS.

Self-employed individuals may want to check into Employment Insurance and WorkSafeBC, to make sure they are receiving the coverage they need.

Read our latest newsletter in order to review these and more topics of interest by clicking on this link to view: Kemp Harvey Group Autumn 2012 Newsletter .

Children’s Fitness Amount

The warm weather is here and kids’ sports activities are well under way. Are you aware of the Children’s Fitness amount and how it can save you some money come tax time? You can claim up to $500 per child under 16 for fees paid to register your child in a prescribed program of physical activity. What is a program of physical activity? Any activity which requires significant physical activity that contributes to cardiorespiratory endurance plus one or more of muscular strength or endurance, flexibility or balance. This includes activities such as hockey, soccer, golf lessons, bowling and horse-back riding. In addition the program must be ongoing with a minimum of eight consecutive weeks or five consecutive days. The activity must also be supervised and suitable for children. You are also unable to make a claim for  any amounts for which you have or will be reimbursed.

If your child qualifies for the disability amount you can claim an additional $500 per child under 18. In this case the requirement for significant physical activity is met if the activities result in movement and in an observable use of energy in a recreational context.

Family Caregiver Amount

Canada Revenue Agency (CRA) has proposed a new Family Caregiver Amount for 2012 and subsequent years. This Family Caregiver amount will increase one of the following non-refundable tax credits by and additional $2,000 for each eligible dependant:

  • spouse or common-law partner amount
  • amount for an eligible dependant – amount for children under age 18 at the end of the year
  • amount for infirm dependants age 18 or older – caregiver amount

You can receive this new Family Caregiver amount if you are otherwise eligible for the non-refundable tax credits listed above for a dependant and:

  • for individuals age 18 and older, the individual must be dependent on you by reason of mental or physical infirmity or
  • for a child under age 18, the child must have a medical or physical infirmity and as a result of that infirmity is, and is likely to be for a long continued period of indefinite duration, dependent on others for significantly more assistance in attending to the child’s needs and care when compared to children of the same age.

CRA will require a signed statement from a medical doctor. This will require information regarding the nature, commencement, and duration of the of the dependant’s impairment.