Each year brings its share of new actions. Here are five to keep in mind so you don’t miss out on the amounts you’re entitled to.
Posted at 5:00 am
self-employed
PHOTO MARTIN TREMBLAY, PRESS ARCHIVE
The maximum allowable Capital Cost Allowance (CCA) has been increased to $59,000 for Class 54 zero-emission vehicles in 2022.
Self-employed people have the opportunity to use the vehicle they bought in 2022 100% for their work.
The measure could apply to a real estate agent who often drives for work, according to the example of tax expert Sébastien Hamel, CPA, at Panorama Corporate Taxation.
The measure was announced in the 2021 federal budget, and in February 2022 the self-employed were added to the Budget Enforcement Act.
The measure makes it possible to immediately charge for the depreciation of certain assets such as passenger cars and zero-emission vehicles. Other categories of real estate are also covered, but not real estate. “A photographer who renewed their equipment in 2022 could spend it on their explanation,” says Luce Morin, CPA, owner of Activ Accounting and Tax Services in Lachine.
However, with this capital cost flat rate of 100% of the acquisition costs, there can be no loss, adds Ms. Morin.
Typically, vehicles are depreciable at a rate of 30% of their cost or 45% for properties with accelerated investment incentives.
Federal forms T2125 and provincial forms TP-130.AD must be completed.
The measure applies to both new and used goods.
To give an idea of the amounts involved, the maximum allowable as a Capital Cost Allowance (CCA) in 2022 has been increased to $34,000 for Class 10.1 passenger cars and $59,000 for Class 54 passenger cars.
Class 10.1 assets are now subject to a reversal of depreciation upon resale of the vehicle.
Since significant amounts are involved immediately when using 100% CCA, tax authorities will be closely monitoring the situation. It is better to consult a tax specialist to ensure compliance with the conditions.
For example, if you can get your hands on the federal incentive to purchase a zero-emission vehicle, it will be disqualified from Class 54 for CCA purposes. However, claiming the rebate under Quebec Roulez’s Vert program has no effect.
Work from home: The $2 a day is still available
PHOTO ALAIN ROBERGE, LA PRESS ARCHIVE
An employee who has worked from home more than 50% of the time for at least four consecutive weeks due to COVID-19 is eligible for $2 per day.
COVID-19 made itself felt in 2022. Logically, governments continue to apply the deduction for homework expenses. Let’s remember that until mid-February 2022 the province was locked at home.
The rule is that the employee is entitled to an expense deduction if they have worked from home more than 50% of the time for at least four consecutive weeks due to COVID-19.
With the simplified method, the worker is entitled to $2 per day.
If we exclude weekends, four weeks of vacation and ten public holidays, there are still 230 eligible days. Someone teleworking three days a week as of April 1 would have worked 162 days from home for $2 a day, a credit of $324.
The detailed procedure could prove advantageous for a tenant, for example, since it is usually more advantageous for them to claim labor costs at home than with a landlord.
The Ministère des Finances du Québec has put an interactive calculation tool online.
surrogate mother
PHOTO EDOUARD PLANTE-FRÉCHETTE, LA PRESSE ARCHIVE
In Canada, paying a surrogate mother is illegal. Her parents can reimburse her for the costs, including the medical expenses incurred.
For couples who use a surrogate, for the first time in 2022 it will be possible to claim the amounts paid to a surrogate as medical expenses. These are sums that can be substantial.
In Canada, paying a surrogate mother is illegal. But she can recover expenses from her parents, including her medical expenses. Before 2022, parents could not claim these amounts as part of the medical expenses tax credit.
cabin owner
PHOTO ALAIN ROBERGE, LA PRESS ARCHIVE
Quebec has extended the eligible tax credit for modernizing wastewater treatment plants in rural areas until 2027.
Cottage or home owners in rural areas know that Quebec has extended the eligible tax credit for upgrading residential wastewater treatment plants by five years, through 2027. So far, the credit has applied to contracts concluded before April 1, 2022.
The amount you are entitled to is 20% of expenses over $2,500. The maximum loan amount is $5,500. It is accumulated over the period from 2017 to 2027. Only amounts paid in 2022 are eligible for the loan. “It’s good to know because people don’t think about it,” admits Luce Morin, CPA. We accountants provide our clients with questionnaires so that they do not forget about loans. But it is clear that we do not draw up our form: have you changed your septic tank? “, she continues.
dental care
PHOTO ALAIN ROBERGE, LA PRESS ARCHIVE
In Quebec, the Régie de l’assurance maladie covers several dental treatments for children under the age of 10, such as annual check-ups and dental fillings.
If you have children under the age of 12 and family income less than $90,000, you may be eligible for a portion of the new Canadian Dental Allowance. The child is eligible if the child has had dental treatment since October 1, 2022 and this was paid for from their own household budget. He must not have access to private dental insurance.
Depending on net household income, the benefit is tax-free $260, $390, or $650 and will be used to cover expenses from October 1, 2022 through June 30, 2023. A second entitlement period begins on July 1, 2023 and ends on June 30 of the following years.
For example, if the family income is between $80,000 and $90,000, the benefit is $260 per eligible child.
In Quebec, the Régie de l’assurance maladie covers several dental treatments for children under the age of 10, such as annual check-ups and dental fillings.
The benefit is obtained through a direct application to the Canadian Revenue Service separately from the income tax return. You must have filed a tax return in 2021 to be eligible.