Important Information for your 2022 Tax Filing
In the 2022 Budget, A Plan to Grow Our Economy and Make Life More Affordable, the Federal Government implemented new programs and tax credits that you can take advantage of in your 2022 tax filing.
Here’s what’s new for 2022:
Ontario Staycation Tax Credit
Ontario residents can claim 20% of their eligible 2022 accommodation expenses, like hotel, cottage, and campground stays. This refundable tax credit applies to leisure stays between January 1, 2022, and December 31, 2022, regardless of the timing of the payment for the stays. You can claim eligible expenses of up to $1,000 or $2,000 if you have a spouse, common-law partner, or eligible children. You’ll receive up to $200 – $400 back depending on your family structure.
First-Time Home Buyer’s Tax Credit
For 2022 and subsequent years, first time home buyers who acquire a qualifying home can claim a non-refundable tax credit of up to $1,500 (in previous years, the benefit was $750).
Federal Home Accessibility Tax Credit
The Home Accessibility Tax Credit is a non-refundable credit of up to $3,000 (previously $1,500) per year on expenditures for permanent home modifications to improve mobility access. The credit is available to senior homeowners (over age 65) and individuals with a disability, tenants and people who share a home with a qualifying individual. The tax credit covers items like grab bars around toilets, tubs & showers, walk-in bathtubs, non-slip flooring, renovations to permit a first-floor occupancy, etc. For a full list of expenses that qualify, please see the Government of Canada website.
Home Office Expense Deduction – Extended
In 2020, the Federal Government introduced a new simplified process for calculating and claiming a home office deduction for employees that were temporarily working from home due to the Pandemic. They have since extended this simplified process until 2022. Employees will be eligible for a deduction if they worked from home for at least 50% of the days during a consecutive 4-week period in 2021 or 2022. There will be two calculation methods available for 2021 and 2022:
- Flat-rate method: is a $2/day deduction up to a maximum of $500 for the year. No signed form is required by your employer for this method, but you will need to provide us the number of days you worked at home during 2022.
- Detailed method: is based on actual home office expenses (utilities, internet, and maintenance only) prorated for the proportion of the home used as a workspace.
Educator School Supply Tax Credit – Change to benefit amount
A tax credit for certified teachers and early childhood educators who purchase school supplies for their classroom (which their employer does not reimburse) is available. The maximum amount of eligible expenses for the credit is $1,000. The list of eligible teaching supplies was expanded to include electronic devices needed for online learning. To claim the credit, you must supply your accountant with your receipts as well as a T2200 Declaration of Conditions of Employment form signed by your employer.
T Slips and RRSP Documentation
A T Slip is a short form term for a tax slip. T-Slips are Investment Income statements, RRIF & RRSP withdrawals, Income reports, etc. Your employer must give you your T4 slip on or before the last day of February.
Principal Residence Reporting
CRA requires that a declaration form be completed in the year you sell your principal residence. If you have sold your house and moved during 2022, please inform your accountant. If you own more than one residence (such as a cottage), please discuss this with your accountant as there are tax planning opportunities to consider.
Medical Expense Tax Credit
You qualify for a medical tax credit if the total medical expenses that you paid for yourself, your spouse or your dependants exceeds 3% of your net income. Most pharmacies, dental offices, or chiropractors will provide you with an annual listing of amounts invoiced to you and or paid by you in the calendar year. Your accountant will appreciate this more than receiving individual receipts.
Disability Tax Credit
Disability credit is for those who have vision, hearing, speaking, walking, feeding, and other impairments. The Disability Tax Credit Certificate (T2201) form must be completed by your medical practitioner prior to being able to claim the credit with CRA.
What's New for 2023
Tax-Free First Home Savings Account
Beginning in 2023, Canadian residents who are 18 years of age and are considered a first-time home buyer can open a new Tax-Free First Home Savings Account. This new registered plan would give prospective first-time home buyers the abilit to save up to $40,000 on a tax-free basis. Like a RRSP plan, contributions would be tax deductible, however withdrawals to purchase a first hoe, including the investment income, would be non-taxable. The annual contribution limit has been set at $8,000 with a lifetime limit of $40,000. for more information, speak to your Senior Wealth Advisor or visit: https://www.canada.ca/en/department-finance/news/2022/08/design-of-the-tax-free-first-home-savings-account
Multigenerational Home renovation Tax Credit
The multigenerational Home Renovation Tax Credit is a refundable credit of up to $7,500 (15% of up to $50,000 in construction costs) for families wishing to add a secondary unit to their home for the purposes of allowing an immediate or extended family member who is either a senior or adult with a disability, to live with them.
A qualifying renovation means a renovation or alteration of, or addition to, an eligible dwelling that is enduring in nature and integral to the dwelling and is undertaken to enable the family member to reside in a secondary unit within the dwelling. The secondary unit must be a self-contained housing unit with a private entrance, kitchen, bathroom and sleeping area. For more information, please speak with your accountant.
This article is a general discussion of certain issues intended as general information only and should not be relied upon as tax or legal advice. Please obtain independent professional advice, in the context of your particular circumstances. iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.