(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

Series of vehicle break-ins in the Clearwater area

Series of vehicle break-ins On Jan. 25 at 2:24 p.m. a local… Continue reading

Back in time

55 YEARS AGO: A toboggan party was enjoyed by the Teen Town… Continue reading

Clearwater’s North Thompson Complex packed with Winterfest fun

By K.A. Pendergrast Friday, Jan.17 helped kick off the Clearwater Hockey Days/Winterfest… Continue reading

Vavenby resident working at refuge witnesses volcano eruption

By Robyn Rexin Twenty-seven-year-old Vavenby resident Vienna Moilliet is working as a… Continue reading

Literacy Week coming to Clearwater with lots of reading-related events

Clearwater will be celebrating Family Literacy Week (Jan. 26 to Feb. 2)… Continue reading

B.C. reports first coronavirus in Vancouver region

First patient visited Wuhan, China, reported symptoms

Alessia Cara to host and perform at 2020 Juno Awards

Multi-platinum Canadian singer-songwriter also up for six awards, including Artist of the Year

Watch out for scams, clickbait in the wake of Kobe Bryant’s death: Better Business Bureau

Kobe Bryant and his daughter were killed in a helicopter crash near Los Angeles

‘Very disrespectful’: Headstones at Okanagan cemetery damaged by excavation crew

Headstones at Enderby’s Cliffside Cemetery mistakenly driven over by excavation crew

Northern B.C. bus service to continue, but some fares jump

Updated fare schedule to be posted on BC Bus North’s website on Friday

Despite reports of decline, birds flocking to national parks in Canadian Rockies

Recent studies suggest overall bird population has slid by three billion since 1970

Former UN committee member defends stance on B.C.’s Coastal GasLink pipeline

First Nations LNG Alliance accused UN committee, human rights watchdog of not doing their research

Opioid crisis to blame for shorter life expectancy in B.C. men, says Stats Can

Opioid crisis held responsible for declining life expectancy

Most Read