There are earth shattering new items for tax prep 2019. Hold on tightly.
CRA has changed its line numbering throughout the T1 Tax Return.
For example, line 236, “net income” as it has been known for decades, well it’s now line 23600.
On the surface this may not appear to be of any consequence but considering the depth and breadth of how this line number, along with many others, are entrenched in requests by banks, insurers, etc, the impact of the numbering change may become a hassle to you.
In fairness, CRA explains that the new numbering will permit more data input and in a more organized fashion, and in general, better align its computers for various government purposes.
Of course with this efficiency, CRA gains more oversight that will allow more enforcement of Canada’s tax policy. With this fact in mind, what perhaps appears as an administrative revision really provides a major advancement for CRA’s service.
Big brother is watching!
On the lighter side, the T1 Tax Return jacket has grown from 4 pages to 8 pages, and not because of all the new line numbering. CRA has now embedded Schedule 1 with its tax calculations into the jacket, plus enlarged the font and left white space for your notes.
Signature pages have changed. For the 5th year in row, CRA has again changed the signature line location on the e-file authorization form T183.
As well, CRA has renamed the T1013 Representative Request form to the “AUTH” form, but apparently if it’s being paper filed, it’s called “AUT-1”.
And how about this one, the tuition T2202a slip is now called T2202.
Direct deposit for refunds can still be completed with the e-filing of your T1 Tax Return, but cannot be set-up with a paper filed return.
If direct deposit is to be set up at any time other than at e-file time, you are on your own.
Making a payment to CRA got easier, and maybe more dangerous?
You can now pay by credit card, e-transfer and even through third parties like Pay Pal. Not much detail on this yet.
Okay, so what about actual tax changes for 2019 you ask?
The Working Income Tax Credit is now called the Canada Workers Benefit. This is a refundable tax credit for low income earners and the credit has been increased by $170 but more significantly the credit will now grind down to zero at a “higher” low income.
Moving into 2020, the government has introduced the Canada Training Credit (CTC). It will work in the background accumulating by $250 in credit per year to a lifetime maximum of $5,000 that you can use toward fees for skills training.
Who and how you qualify for this CTC has not been announced in any detail. The CTC will be shown on your Notice of Assessment like your RRSP and TFSA contribution room.
Finally, and perhaps as no surprise, medical cannabis with a doctor prescription is now a legit medical claim.
Ron Clarke has his MBA and is a business owner in Trail, providing accounting and tax services. Email him at ron.clarke@JBSbiz.ca. To read previous Tax Tips & Pits columns visit www.JBSbiz.net.