514 Accounting

Income tax changes for 2020 filing

  • For 2020, the Canada workers benefit (CWB) replaces and strengthens the working income tax benefit (WITB). The CWB is an enhanced, more accessible, refundable tax credit.
  • The maximum amount you can withdraw from your registered retirement savings plan (RRSP) under the Home Buyers’ Plan (HBP) increased from $25,000 to $35,000 for withdrawals made after March 19, 2020.
  • For expenses incurred after October 16, 2020, certain cannabis products purchased for a patient for medical purposes will be considered eligible medical expenses for the medical expense tax credit.
  • Starting in 2020, there is a temporary enhanced first-year capital cost allowance of 100% for eligible zero-emission vehicles. Eligible vehicles must be acquired after March 18, 2020, and become available for use before 2024.

Provincial income tax changes for 2020 tax filing

  • As of 2020, families no longer have to pay an additional contribution. Consequently, you will no longer receive RL-30 slips.
  • Beginning in 2020, if you and your spouse on December 31 are splitting the tax shield, you can decide together on the amount each of you will receive.
  • On March 20, 2020, the maximum amount that can be withdrawn from a registered retirement savings plan (RRSP) under the HBP increased from $25,000 to $35,000.
  • On July 1, 2020, the contribution rates for the Québec prescription drug insurance plan were increased. Consequently, the maximum premium has been raised from $616 to $636. The maximum premium for 2020 is therefore $626.
  • A number of other amounts have been increased, including the following:
  • ü the deduction for workers (line 201);
  • ü the basic personal amount (line 350);
  • ü the income thresholds at which certain tax credits are reduced;
  • ü the amount for a person living alone (line 20 of Schedule B);
  • ü the age amount (line 22 of Schedule B); and
  • ü the basic exemption for calculating the contribution to the health services fund (Schedule F).

Tax credit for your Spouse

If, on December 31, 2020, you had a spouse, and he or she lived with you, only one of you can complete Schedule D to claim the solidarity tax credit for both of you. 

If, on December 31, 2020, you had a spouse, but he or she did not live with you (for example, if one of you permanently lives in a residential and long-term care centre [CHSLD]), each of you must complete a separate Schedule D to claim the solidarity tax credit. 

Tax credit for New Residents

If you became resident in Quebec in 2019, you must complete Schedule D of your  2020 income tax return to claim the solidarity tax credit for the period from July 2020 to June 2021. 

The solidarity tax credit for the period from July 2020 to June 2021 is based on your situation on December 31, 2020.

The solidarity tax credit is a refundable tax credit for low- and middle-income families. 

Since it is based on your situation on December 31 of the previous year, the amount of your credit for the period from July 2020 to June 2021  will be based on your situation on December 31, 2020. 

To receive the credit, you must claim it  when you file your income tax return  

Solidarity Tax Credit

Solidarity Tax Credit is a refundable tax credit that is given to low to middle-income individuals, couples or families. Only one spouse can claim this credit. The maximum amount of this credit that can be claimed is $1,140. However, the amount can be reduced based on the family income or income of the individual. 

 These credits can be paid out monthly or quarterly depending on the amount of the credit based on the individual’s income 

 This credit is based on your situation at December 31st of the tax year in relevance. 

The credit is calculated from the period of (example) July 2020 to June 2021. And is based on your situation at December 31st 2020. 

In order to claim this credit, you must claim it when filing your personal income tax return. 

For individuals renting a residence, it is important to request an RL-31 from your landlord. This slip must be applied to your income tax return. 

Another important factor to keep in mind in regard to this credit, you must have direct deposit with Revenue Quebec in order to obtain this credit.

 

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