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Capital Cost Allowance

Thu, 12/06/2018 - 09:49
Harmonization with certain measures announced in the Economic Statement of the Department of Finance Canada

On November 21, 2018, the Department of Finance Canada released the 2018 Fall Economic Statement outlining a number of changes to federal tax legislation and regulations.

Subject to the special rules mentioned below with regard to a property that is qualified intellectual property or property that is composed of general-purpose electronic data processing equipment, the Québec tax regulations will be amended to incorporate, with adaptations based on their general principles, the following proposed amendments to the Income Tax Regulations concerning accelerated depreciation:

  • allow taxpayers to write off the full cost of machinery or equipment used in manufacturing or processing for the taxation year in which the property becomes available for use, where such property becomes available for use before 2024, with a gradual reduction afterwards;
  • allow taxpayers to write off the full cost of clean energy generation equipment, for the taxation year in which the property becomes available for use, where such property becomes available for use before 2024, with a gradual reduction afterwards;
  • introduce an accelerated investment incentive, namely, an accelerated capital cost allowance making it possible to claim up to three times the amount that could otherwise be deducted for the taxation year in which the property becomes available for use.
Accelerated depreciation of property that is qualified intellectual property or general-purpose electronic data processing equipment

The proposed changes to the federal tax system regarding accelerated depreciation will be adjusted, for the purposes of Quebec's tax system, so that a taxpayer may deduct, for the taxation year in which the property becomes available for use, the full cost of acquisition of a property that is qualified intellectual property or general-purpose electronic data processing equipment.

Qualified intellectual property means property acquired after December 3, 2018, that is a patent or a right to use patented information, a licence, a permit, know-how, a commercial secret or other similar property constituting knowledge, and that:

  • is property included in Class 14 of Schedule B to the Regulation respecting the Taxation Act, property included in Class 44 of that schedule or property that is incorporeal capital property;
  • is acquired by a taxpayer in the course of a technology transfer or is developed by or on behalf of the taxpayer with a view to enabling the taxpayer to implement an innovation or invention concerning the taxpayer's business;
  • begins to be used within a reasonable time after being acquired or after its development is completed;
  • is used, for the period covering the process of implementing the innovation or invention, only in Québec.

General-purpose electronic data processing equipment is property included in Class 50 of Schedule B to the Regulation respecting the Taxation Act.

For more information, see pages 8 to 11 of Information Bulletin 2018-9 (PDF – 533 KB) published by the Ministère des Finances on December 3, 2018.

Change and elimination of the additional capital cost allowance of 60%

The March 2018 Québec Economic Plan introduced an additional capital cost allowance of 60%.

The tax legislation will be amended to change the amount that a taxpayer may deduct in computing income, on account of the additional capital cost allowance of 60% in respect of qualified property, for the taxation year in which the property becomes available for use, and for the following year. These changes will apply to qualified property acquired after November 20, 2018, but not later than December 3, 2018.

The additional capital cost allowance of 60% was eliminated on December 4, 2018.

For more information, see pages 11 to 15 of Information Bulletin 2018-9 (PDF – 533 KB) published by the Ministère des Finances on December 3, 2018.

Introduction of an additional capital cost allowance of 30%

To encourage continued investment in manufacturing and processing equipment, clean energy generation equipment, general-purpose electronic data processing equipment and certain intellectual property, an additional capital cost allowance of 30% will be introduced. This additional capital cost allowance will be permanent.

The tax legislation will be amended to allow a taxpayer who acquires contemplated property after December 3, 2018, to deduct in computing income from a business for a taxation year, an amount corresponding to 30% of the amount deducted in computing such income, for the previous taxation year, on account of the capital cost allowance for the contemplated property.

Contemplated property is:

  • machinery or equipment used in manufacturing or processing, namely, property included in Class 53 of Schedule B to the Regulation respecting the Taxation Act;
  • clean energy generation equipment, namely, property included in Class 43.1 of the schedule or property included in Class 43.2 of the schedule;
  • property composed of general-purpose electronic data processing equipment and systems software for that equipment, namely, property included in Class 50 of the schedule, other than property that had allowed or could have allowed the taxpayer to claim the additional capital cost allowance of 60%;
  • qualified intellectual property.

For more information, see pages 15 to 16 of Information Bulletin 2018-9 (PDF – 533 KB) published by the Ministère des Finances on December 3, 2018.

Refundable Senior Assistance Tax Credit

Mon, 12/03/2018 - 17:53

A new tax credit has been created to provide assistance for seniors aged 70 or over on December 31, 2018. It is available for 2018 onward, and you can receive it even if you did not claim it in your income tax return.

Eligibility

Generally speaking, you can receive the new tax credit if:

  • you were resident in Québec on December 31; and
  • you or your spouse on December 31 is: 
    • a Canadian citizen,
    • a permanent resident or protected person within the meaning of the Immigration and Refugee Protection Act, or
    • a temporary resident or the holder of a temporary resident permit, within the meaning of the Immigration and Refugee Protection Act, who has been living in Canada for 18 months.
Amount of the tax credit

The maximum for the year is: 

  • $400 if you have a spouse on December 31 and he or she is also eligible;
  • $200 if you have a spouse but only one of you is eligible; or
  • $200 if you do not have a spouse.
 Reduction based on family income

The tax credit is reduced by 5% of the part of your family income that is over:

  • $36,600, if you have a spouse; or
  • $22,500, if you do not have a spouse.

You are not eligible for the tax credit if your family income is: 

  • $44,600 or more, if you have a spouse on December 31 and he or she is also eligible;
  • $40,600 or more, if you have a spouse but only one of you is eligible;
  • $26,500 or more, if you do not have a spouse.

Your family income is the amount on line 275 of your income tax return, plus, if you had a spouse on December 31, the amount on line 275 of his or her return. 

Splitting the tax credit

If you and your spouse on December 31 are both eligible, you can split the tax credit. To do so, you will have to file form TP-1029.SA-V, Senior Assistance Tax credit. Both of you will also have to file an income tax return.

For more information, see pages 5 through 8 of information bulletin 2018-9, published by the Ministère des Finances. 

Self-Assessment of Tax on the Purchase of Carbon Emission Allowances

Thu, 10/25/2018 - 13:55

On June 27, 2018, changes were made to the rules for reporting and paying GST/HST and QST on taxable supplies of carbon emission allowances made in Québec or elsewhere in Canada on a secondary market, such as those traded in cap-and-trade systems.

The changes generally apply only to the secondary market of carbon pollution pricing instruments, where businesses can sell surplus emission allowances to companies that have exceeded their emission targets. The initial supply of emission allowances by a government entity generally remains exempt.

Under the new rules, purchasers of emission allowances must self-assess the GST and QST payable on the purchase and remit them to us. (Under the former rules, the seller of the allowance would collect the GST and QST from the purchaser and remit them.)

Registrants that are entitled to input tax credits (ITCs) and input tax refunds (ITRs) in respect of the taxes payable on the purchase of taxable emission allowances can claim them in their regular GST/HST and QST returns.

The changes do not affect the application of the GST or QST, but simply the manner in which they are collected and remitted to Revenu Québec.

For more information, click Carbon Emission Allowances.

Financial Compensation for Holders of Taxi Owner's Permits — Tax Treatment

Mon, 10/15/2018 - 09:36

In the 2018-2019 Budget Speech delivered on March 27, 2018, the Minister of Finance announced a total of $250 million in financial assistance to compensate holders of taxi owner's permits for the loss in value of their permits.

If you have one or more of these permits, you received (or will receive) an amount of compensation calculated on the basis of the loss in value determined for your taxi servicing area. Since the compensation is considered a form of government assistance for income tax purposes, you will receive an RL-27 slip for it for 2018. The slip will be issued by February 28, 2019.

For more information, see Programme d'aide financière à la modernisation des services de transport par taxi on the Ministère des Transports, de la Mobilité durable et de l'Électrification des transports website (French only).

Tax effects

For tax purposes, taxi owner's permits are considered depreciable property. Since the compensation offsets the loss in your permit's value, it reduces both the capital cost of the permit and the undepreciated capital cost (UCC) for the permit's class of property.

Note that reducing the permit's capital cost may increase your capital gain if you sell the permit. Half of the gain will be taxable in the year of the sale.

Likewise, reducing the UCC will reduce the capital cost allowance (CCA) you can claim in respect of your permit in the future. Also, if the compensation you received is greater than the UCC for the class of property, reducing the UCC may result in CCA recpature at the end of the year you received the compensation.

New Reduction of the Health Service Fund Contribution for SMBs as of 2018

Fri, 08/24/2018 - 09:54

On August 15, 2018, the Minister of Finance announced a new reduction of the health services fund contribution rate.

Increase in total payroll threshold for the reduced contribution rate

For 2018, the total payroll threshold for the reduced health services fund contribution rate will increase from $5 million to $5.5 million. It will then rise gradually from 2019 to 2022 and be indexed annually as of 2023.

Decrease in health services fund contribution rate

If you are an employer other than a public-sector employer and your total payroll is less than $5.5 million, you can qualify for the reduced contribution rate, subject to certain conditions. You must use the contribution rate for your sector of activity to calculate your health services fund contribution for the year. 

See the table below for the health services fund contribution rates for 2018 for each sector of activity.

SMBs in the primary and manufacturing sectors Contribution rate for 2018 Total payroll (TP) Salaries or wages paid before March 28, 2018 Salaries or wages paid between March 28 and August 15, 2018 Salaries or wages paid after August 15, 2018 $1,000,000 or less 1.50% 1.45% 1.25% $1,000,001 to $5,499,999 0.8867% + (0.6133% x TP/1,000,000) 0.8256% + (0.6244% x TP/1,000,000) 0.5811% + (0.6689% x TP/1,000,000) $5,500,000 or more 4.26% 4.26% 4.26% SMBs in the service and construction sectors Contribution rate for 2018 Total payroll (TP) Salaries or wages paid before March 28, 2018 Salaries or wages paid between March 28 and August 15, 2018 Salaries or wages paid after August 15, 2018 $1,000,000 or less 2.30% 1.95% 1.75% $1,000,001 to $5,499,999 1.8644% + (0.4356% x TP/1,000,000) 1.4367% + (0.5133% x TP/1,000,000) 1.1922% + (0.5578% x TP/1,000,000) $5,500,000 or more 4.26% 4.26% 4.26%

If you stop carrying on a business or making payments in the year, you must calculate your health services fund contribution rate for 2018 as shown in the example below.

Example You are an employer in the primary and manufacturing sectors and you stop carrying on your business on August 29, 2018. Your total payroll for the period from January 1 to August 29, 2018, is less than $1 million. Salaries or wages paid before March 28, 2018 Salaries or wages paid between March 28 and August 15, 2018 Salaries or wages paid after August 15, 2018 Salaries or wages subject to the contribution $600,000 $300,000 $50,000 Contribution rate 1.50% 1.45% 1.25% Contribution to the health services fund $9,000 $4,350 $625 Contribution for the period from January 1 to August 29, 2018: $9,000 + $4,350 + $625 $13,975 Keep your calculations in case we ask for them. Reduction of the health services fund contribution for the creation of specialized jobs 

Form LE-34.1.12-V, Reduction of the Contribution to the Health Services Fund: Creation of Specialized Jobs, will be updated to incorporate the new rates for 2018. In addition, the denominator in the fraction used in the formula to determine your reduction rate if your total payroll is over $1 million has increased from $4 million to $4.5 million. 

Periodic payments of the health services fund contribution

Your periodic payments after August 15, 2018, may be adjusted to take into account the total payroll threshold increase for 2018. 

Reduction of the Health Services Fund Contribution Rate for SMBs

Fri, 07/13/2018 - 09:28

In the Budget Speech of March 27, 2018, the Minister of Finance of Québec announced a new plan to gradually reduce the health services fund contribution rate between 2018 and 2022. In addition, the total payroll threshold for the reduced contribution rate will be increased between 2019 and 2022 and then indexed annually as of 2023.

For 2018, if you are an employer other than a public-sector employer and your total payroll is less than $5 million, you can qualify for the reduced contribution rate, subject to certain conditions. You must use the contribution rate for your sector of activity to calculate your health services fund contribution for the year.  

See the table below for the health services fund contribution rates for 2018 for each sector of activity.

SMBs in the primary and manufacturing sectors Contribution rate for 2018 Total payroll (TP) Salaries or wages paid before March 28, 2018 Salaries or wages paid after March 27, 2018 $1,000,000 or less 1.50% 1.45% Entre $1,000,001 to $4,999,999 0.81% + (0.69% × TP/1,000,000) 0.7475% + (0.7025% × TP/1,000,000) $5,000,000 or more 4.26% 4.26% SMBs in the service and construction sectors Contribution rate for 2018 Total payroll (TP) Salaries or wages paid before March 28, 2018 Salaries or wages paid after March 27, 2018 $1,000,000 or less 2.30% 1.95% Entre $1,000,001 to $4,999,999 1.81% + (0.49% × TP/1,000,000) 1.3725% + (0.5775% × TP/1,000,000) $5,000,000 or more 4.26% 4.26%

If you stop carrying on a business or making payments in the year, you must calculate your health services fund contribution rate for 2018 as shown in the example below.

Example

You are an employer in the primary and manufacturing sectors and you stop carrying on your business on June 29, 2018. Your total payroll for the period from January 1 to June 29, 2018, is less than $1 million.

Salaries or wages paid before March 28, 2018 Salaries or wages paid after March 27, 2018 Keep your calculations in case we ask for them. Salaries or wages subject to the contribution $600,000 $300,000 Contribution rate 1.50% 1.45% Contribution to the health services fund $9,000 $4,350 Contribution for the period from January 1 to June 29, 2018: $9,000 + $4,350 $13,350

Form LE-34.1.12-V, Reduction of the Contribution to the Health Services Fund: Creation of Specialized Jobs, will be updated to incorporate the new rates for 2018.

Reduction of the Health Services Fund Contribution Rate for SMBs

Fri, 07/13/2018 - 09:28

In the Budget Speech of March 27, 2018, the Minister of Finance of Québec announced a new plan to gradually reduce the health services fund contribution rate between 2018 and 2022. In addition, the total payroll threshold for the reduced contribution rate will be increased between 2019 and 2022 and then indexed annually as of 2023.

For 2018, if you are an employer other than a public-sector employer and your total payroll is less than $5 million, you can qualify for the reduced contribution rate, subject to certain conditions. You must use the contribution rate for your sector of activity to calculate your health services fund contribution for the year.  

See the table below for the health services fund contribution rates for 2018 for each sector of activity.

SMBs in the primary and manufacturing sectors Contribution rate for 2018 Total payroll (TP) Salaries or wages paid before March 28, 2018 Salaries or wages paid after March 27, 2018 $1,000,000 or less 1.50% 1.45% Entre $1,000,001 to $4,999,999 0.81% + (0.69% × TP/1,000,000) 0.7475% + (0.7025% × TP/1,000,000) $5,000,000 or more 4.26% 4.26% SMBs in the service and construction sectors Contribution rate for 2018 Total payroll (TP) Salaries or wages paid before March 28, 2018 Salaries or wages paid after March 27, 2018 $1,000,000 or less 2.30% 1.95% Entre $1,000,001 to $4,999,999 1.81% + (0.49% × TP/1,000,000) 1.3725% + (0.5775% × TP/1,000,000) $5,000,000 or more 4.26% 4.26%

If you stop carrying on a business or making payments in the year, you must calculate your health services fund contribution rate for 2018 as shown in the example below.

Example

You are an employer in the primary and manufacturing sectors and you stop carrying on your business on June 29, 2018. Your total payroll for the period from January 1 to June 29, 2018, is less than $1 million.

Salaries or wages paid before March 28, 2018 Salaries or wages paid after March 27, 2018 Keep your calculations in case we ask for them. Salaries or wages subject to the contribution $600,000 $300,000 Contribution rate 1.50% 1.45% Contribution to the health services fund $9,000 $4,350 Contribution for the period from January 1 to June 29, 2018: $9,000 + $4,350 $13,350

Form LE-34.1.12-V, Reduction of the Contribution to the Health Services Fund: Creation of Specialized Jobs, will be updated to incorporate the new rates for 2018.

Changes to the Refundable Tax Credit for Volunteer Respite Services

Wed, 06/13/2018 - 09:23

To further support informal caregivers, changes will be made to the refundable tax credit for volunteer respite services as of the 2018 taxation year.

First, the requirement relating to the number of hours of volunteer respite services that an individual needs to provide to the informal caregiver of a care recipient will be relaxed.

In addition, the maximum amount that an informal caregiver can attribute to an eligible individual for a taxation year under the tax credit for volunteer respite services in respect of a care recipient will be adjusted. This adjustment will be based on the number of hours of volunteer respite services provided to the informal caregiver by the individual in respect of the care recipient. These changes mean that an informal caregiver will be able to attribute:

  • a maximum of $250 to an individual who provides at least 200 hours of volunteer respite services;
  • a maximum of $500 to an individual who provides at least 300 hours of volunteer respite services;
  • a maximum of $750 to an individual who provides at least 400 hours of volunteer respite services.

Second, the maximum amount that an informal caregiver can attribute in recognition of volunteer respite services provided in respect of each care recipient will be raised from $1,000 to $1,500 per year.

Thus, an informal caregiver can attribute amounts under the tax credit, at his or her discretion, provided the amount given to an eligible individual in respect of the same care recipient does not exceed the maximum allowable amount for the number of hours of volunteer respite services provided to the informal caregiver by the individual in the year in respect of the care recipient.

Note that the other terms of the refundable tax credit for volunteer respite services remain unchanged.

For more information, see pages A.33 to A.36 of Additional Information 2018–2019 (PDF – 3.73 MB) published by the Ministère des Finances.

Changes to the Refundable Tax Credit for Volunteer Respite Services

Wed, 06/13/2018 - 09:23

To further support informal caregivers, changes will be made to the refundable tax credit for volunteer respite services as of the 2018 taxation year.

First, the requirement relating to the number of hours of volunteer respite services that an individual needs to provide to the informal caregiver of a care recipient will be relaxed.

In addition, the maximum amount that an informal caregiver can attribute to an eligible individual for a taxation year under the tax credit for volunteer respite services in respect of a care recipient will be adjusted. This adjustment will be based on the number of hours of volunteer respite services provided to the informal caregiver by the individual in respect of the care recipient. These changes mean that an informal caregiver will be able to attribute:

  • a maximum of $250 to an individual who provides at least 200 hours of volunteer respite services;
  • a maximum of $500 to an individual who provides at least 300 hours of volunteer respite services;
  • a maximum of $750 to an individual who provides at least 400 hours of volunteer respite services.

Second, the maximum amount that an informal caregiver can attribute in recognition of volunteer respite services provided in respect of each care recipient will be raised from $1,000 to $1,500 per year.

Thus, an informal caregiver can attribute amounts under the tax credit, at his or her discretion, provided the amount given to an eligible individual in respect of the same care recipient does not exceed the maximum allowable amount for the number of hours of volunteer respite services provided to the informal caregiver by the individual in the year in respect of the care recipient.

Note that the other terms of the refundable tax credit for volunteer respite services remain unchanged.

For more information, see pages A.33 to A.36 of Additional Information 2018–2019 (PDF – 3.73 MB) published by the Ministère des Finances.

Changes to the Tax Credit for Caregivers

Fri, 06/08/2018 - 11:46

To recognize the involvement of individuals who help care for a relative with a severe impairment and with whom they do not live, a new component will be added to the tax credit for caregivers as of the 2018 taxation year.

This refundable tax credit will now comprise four components. The fourth component will apply to caregivers who regularly and continuously help a relative who they neither house nor co-reside with.

Individual eligible for the new component of the tax credit

An individual will be able to claim a refundable tax credit of up to $533 for each relative, provided:

  • the individual is resident in Québec at the end of the year for which the tax credit is claimed (or, if the individual dies in the year, on the date of his or her death); and
  • the relative is considered an eligible relative throughout the required minimum period of support for the particular year (see below).

However, an individual will not be able to claim the tax credit for a particular taxation year if he or she is a dependant of another person for that year.

Amount of the tax credit

Under the new component, an individual can claim a maximum of $533 for each eligible relative. This amount will be reduced at a rate of 16% for each dollar that the eligible relative's income for the year for which the tax credit is claimed exceeds $23,700.

Apart from the reduction rate, the various parameters of the new component will be automatically adjusted each year as of the 2019 taxation year.

Eligible relatives

For the purposes of the new component, a person will be considered an eligible relative of an individual for a minimum period of support provided to the person by the individual for a year, if, throughout that period, the person meets the following conditions:

  • the person's principal place of residence is situated in Québec;
  • the person is either the child, grandson, granddaughter, nephew, niece, brother, sister, father, mother, uncle, aunt, grandfather, grandmother, great-uncle or great-aunt of the individual or of the individual's spouse, or another direct ascendant of the individual or of the individual's spouse;
  • the person does not live in a dwelling situated in a private seniors' residence or in a public network facility;
  • the person has a severe and prolonged impairment because of which, according to the certificate from a physician, the person needs assistance in carrying out a basic activity of daily living.
Minimum period of support

The minimum period of support provided to a person by an individual for a particular taxation year will correspond to a period of at least 365 consecutive days commencing in the year or in the preceding year, of which at least 183 are in the particular year during which the individual provided unremunerated regular, continuous assistance to the relative. The assistance must have helped the relative carry out a basic activity of daily living.

NoteEffective March 27, 2018, nurse practitioners are authorized, for the purposes of the refundable tax credit for caregivers, to issue certifications confirming that an eligible relative is unable to live alone or needs assistance in carrying out a basic activity of daily living because of a severe and prolonged impairment in his or her physical or mental functions.

For more information, see pages A.27 and A.33 of the Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

Changes to the Tax Credit for Caregivers

Fri, 06/08/2018 - 11:46

To recognize the involvement of individuals who help care for a relative with a severe impairment and with whom they do not live, a new component will be added to the tax credit for caregivers as of the 2018 taxation year.

This refundable tax credit will now comprise four components. The fourth component will apply to caregivers who regularly and continuously help a relative who they neither house nor co-reside with.

Individual eligible for the new component of the tax credit

An individual will be able to claim a refundable tax credit of up to $533 for each relative, provided:

  • the individual is resident in Québec at the end of the year for which the tax credit is claimed (or, if the individual dies in the year, on the date of his or her death); and
  • the relative is considered an eligible relative throughout the required minimum period of support for the particular year (see below).

However, an individual will not be able to claim the tax credit for a particular taxation year if he or she is a dependant of another person for that year.

Amount of the tax credit

Under the new component, an individual can claim a maximum of $533 for each eligible relative. This amount will be reduced at a rate of 16% for each dollar that the eligible relative's income for the year for which the tax credit is claimed exceeds $23,700.

Apart from the reduction rate, the various parameters of the new component will be automatically adjusted each year as of the 2019 taxation year.

Eligible relatives

For the purposes of the new component, a person will be considered an eligible relative of an individual for a minimum period of support provided to the person by the individual for a year, if, throughout that period, the person meets the following conditions:

  • the person's principal place of residence is situated in Québec;
  • the person is either the child, grandson, granddaughter, nephew, niece, brother, sister, father, mother, uncle, aunt, grandfather, grandmother, great-uncle or great-aunt of the individual or of the individual's spouse, or another direct ascendant of the individual or of the individual's spouse;
  • the person does not live in a dwelling situated in a private seniors' residence or in a public network facility;
  • the person has a severe and prolonged impairment because of which, according to the certificate from a physician, the person needs assistance in carrying out a basic activity of daily living.
Minimum period of support

The minimum period of support provided to a person by an individual for a particular taxation year will correspond to a period of at least 365 consecutive days commencing in the year or in the preceding year, of which at least 183 are in the particular year during which the individual provided unremunerated regular, continuous assistance to the relative. The assistance must have helped the relative carry out a basic activity of daily living.

NoteEffective March 27, 2018, nurse practitioners are authorized, for the purposes of the refundable tax credit for caregivers, to issue certifications confirming that an eligible relative is unable to live alone or needs assistance in carrying out a basic activity of daily living because of a severe and prolonged impairment in his or her physical or mental functions.

For more information, see pages A.27 and A.33 of the Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

Introduction of a First-time Home Buyers' Tax Credit

Fri, 06/01/2018 - 08:35

A non-refundable tax credit for first-time home buyers has been introduced for the 2018 taxation year.

Qualifying home

A qualifying home of an individual is a housing unit located in Québec that was acquired at a particular time after December 31, 2017, by:

  • the individual or the individual's spouse, where the individual intends to inhabit the home as a principal place of residence not later than one year after the particular time and it is the individual's first housing unit;
  • the individual, where the individual intends that the home be inhabited by a specified disabled person as a principal place of residence not later than one year after the particular time, and the housing unit was acquired by the individual for the specified disabled person to live in:
    • a home that is more accessible by the specified disabled person or in which the specified disabled person is more mobile or functional, or
    • an environment better suited to the specified disabled person's personal needs and care.
NoteA housing unit is an individual house that is detached, semi-detached or a row house, a manufactured home or mobile home, an apartment in an immovable under divided co-ownership (condominium) or an apartment in a multiple-unit residential complex.

A housing unit is a first housing unit if the following conditions are met:

  • The individual did not own, whether alone or jointly, a housing unit that was occupied by the individual in the particular period that began at the beginning of the fourth preceding calendar year that ended before the acquisition of the housing unit and that ended on the day before the acquisition of the housing unit;
  • In the particular period, the individual's spouse did not own, whether alone or jointly, a housing unit inhabited by the individual during their marriage (or during their civil or de facto union).

A specified disabled person is, at a particular time:

  • the individual or a person who is related to the individual at the particular time;
  • a person who is eligible for the tax credit for a severe and prolonged impairment in mental or physical functions for the taxation year that includes the particular time;
  • a person who would have been eligible for the tax credit if no individual had included, in the calculation of the non-refundable tax credit for medical expenses for the year, an amount in respect of remuneration for an attendant or care in a nursing home in respect of the person; or
  • a person in respect of whom the supplement for handicapped children is paid for the month that includes the particular time.
Calculation of the tax credit

The tax credit is calculated by multiplying the rate for the first taxable income bracket of the personal income tax table for the year (which is currently 15%) by $5,000. Thus, the maximum value of the tax credit that an individual can deduct from his or her income tax payable for the year is $750.

To claim the tax credit, an individual must meet the following conditions:

  • The individual is not a trust.
  • The individual is resident in Québec at the end of a taxation year (or, if the individual dies in the year, on the date of the individual's death).
  • The qualifying home was acquired in the year.

If, for a taxation year, more than one individual may claim the first-time home buyers' tax credit in respect of a qualifying home, the total of the amounts that each of these individuals may claim, in the calculation of the tax otherwise payable by each of them for the year, may not exceed the amount that would be allowed if only one of them were eligible for the tax credit for the year.

For more information, see pages A.15 to A.19 of Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

Introduction of a First-time Home Buyers' Tax Credit

Fri, 06/01/2018 - 08:35

A non-refundable tax credit for first-time home buyers has been introduced for the 2018 taxation year.

Qualifying home

A qualifying home of an individual is a housing unit located in Québec that was acquired at a particular time after December 31, 2017, by:

  • the individual or the individual's spouse, where the individual intends to inhabit the home as a principal place of residence not later than one year after the particular time and it is the individual's first housing unit;
  • the individual, where the individual intends that the home be inhabited by a specified disabled person as a principal place of residence not later than one year after the particular time, and the housing unit was acquired by the individual for the specified disabled person to live in:
    • a home that is more accessible by the specified disabled person or in which the specified disabled person is more mobile or functional, or
    • an environment better suited to the specified disabled person's personal needs and care.
NoteA housing unit is an individual house that is detached, semi-detached or a row house, a manufactured home or mobile home, an apartment in an immovable under divided co-ownership (condominium) or an apartment in a multiple-unit residential complex.

A housing unit is a first housing unit if the following conditions are met:

  • The individual did not own, whether alone or jointly, a housing unit that was occupied by the individual in the particular period that began at the beginning of the fourth preceding calendar year that ended before the acquisition of the housing unit and that ended on the day before the acquisition of the housing unit;
  • In the particular period, the individual's spouse did not own, whether alone or jointly, a housing unit inhabited by the individual during their marriage (or during their civil or de facto union).

A specified disabled person is, at a particular time:

  • the individual or a person who is related to the individual at the particular time;
  • a person who is eligible for the tax credit for a severe and prolonged impairment in mental or physical functions for the taxation year that includes the particular time;
  • a person who would have been eligible for the tax credit if no individual had included, in the calculation of the non-refundable tax credit for medical expenses for the year, an amount in respect of remuneration for an attendant or care in a nursing home in respect of the person; or
  • a person in respect of whom the supplement for handicapped children is paid for the month that includes the particular time.
Calculation of the tax credit

The tax credit is calculated by multiplying the rate for the first taxable income bracket of the personal income tax table for the year (which is currently 15%) by $5,000. Thus, the maximum value of the tax credit that an individual can deduct from his or her income tax payable for the year is $750.

To claim the tax credit, an individual must meet the following conditions:

  • The individual is not a trust.
  • The individual is resident in Québec at the end of a taxation year (or, if the individual dies in the year, on the date of the individual's death).
  • The qualifying home was acquired in the year.

If, for a taxation year, more than one individual may claim the first-time home buyers' tax credit in respect of a qualifying home, the total of the amounts that each of these individuals may claim, in the calculation of the tax otherwise payable by each of them for the year, may not exceed the amount that would be allowed if only one of them were eligible for the tax credit for the year.

For more information, see pages A.15 to A.19 of Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

Changes to the Tax Credit for On-the-Job Training Periods

Thu, 05/31/2018 - 09:28

To encourage employers to offer more training periods to Aboriginal people and, consequently, increase their participation in the labour market, the rate of the refundable tax credit for on-the-job training periods has been raised in respect of such trainees.

In addition, both the weekly qualified expenditure limit and the maximum hourly rate have been increased for all existing categories of eligible trainees for the purposes of this tax credit.

Lastly, to encourage employers to offer more training periods in resource regions, the rate of the tax credit has been increased for qualified training periods in these regions.

Aboriginal trainees

Tax legislation will be amended so that a rate of 32% for corporations and 16% for individuals applies where an eligible employer makes a qualified expenditure in respect of an eligible trainee who is an Aboriginal person.

In addition, tax legislation will be amended so that an Aboriginal person means a person who is, at any given time during an eligible training period:

  • an Indian registered pursuant to the Indian Act; or
  • an Inuit beneficiary pursuant to the Act respecting Cree, Inuit and Naskapi native persons.

Lastly, tax legislation will be amended to raise the rates as follows, where an eligible employer makes a qualified expenditure in respect of a trainee who is an Aboriginal person enrolled in an education program or a prescribed program:

  • from 32% to 50% for corporations;
  • from 16% to 25% for individuals.

However, for a taxation year, an eligible employer may benefit from the higher rates in respect of a trainee who is an Aboriginal person enrolled in an education program or a prescribed program, only if the eligible employer's qualified expenditure in respect of such a trainee is at least $2,500 for at least three consecutive taxation years or, in the case of a partnership, for at least three consecutive fiscal periods.

Increase in the weekly limit and the maximum hourly rate

The weekly limit will be raised to:

  • $875 per week for eligible trainees enrolled in a prescribed program, or disabled eligible trainees who are apprentice trainees or trainees enrolled in an education program;
  • $1,225 per week for disabled eligible trainees enrolled in a prescribed program;
  • $700 per week in the case of all other eligible trainees.

Accordingly, tax legislation will be amended to increase the hourly rates from $18 to $21 for an eligible trainee and from $30 to $35 for an eligible supervisor.

Increase respecting resource regions

Tax legislation will be amended so that a rate of 32% for corporations and 16% for individuals applies where an eligible employer makes a qualified expenditure in respect of an eligible trainee who serves an eligible training period in an establishment, of the eligible employer, located in an eligible region.

Tax legislation will also be amended to raise as follows the rates of the tax credit in respect of an eligible trainee enrolled in an education program or a prescribed program who serves an eligible training period, in an establishment, of an eligible employer, located in an eligible region:

  • from 32% to 50% for corporations;
  • from 16% to 25% for individuals.

However, for a taxation year, an eligible employer may benefit from the higher rates in respect of a trainee enrolled in an education program or a prescribed program, only if the eligible employer's qualified expenditure in respect of such a trainee is at least $2,500 for at least three consecutive taxation years or, in the case of a partnership, for at least three consecutive fiscal periods.

For the purposes of this amendment, the following resource regions are considered eligible regions:

  • the administrative regions described in the Décret concernant la révision des limites des régions administratives du Québec:
    • administrative region 01 Bas-Saint-Laurent,
    • administrative region 02 Saguenay–Lac-Saint-Jean,
    • administrative region 08 Abitibi-Témiscamingue,
    • administrative region 09 Côte-Nord,
    • administrative region 10 Nord-du-Québec,
    • administrative region 11 Gaspésie–Îles-de-la-Madeleine;
  • the following regional county municipalities:
    • Municipalité régionale de comté d'Antoine-Labelle,
    • Municipalité régionale de comté de La Vallée-de-la-Gatineau,
    • Municipalité régionale de comté de Mékinac,
    • Municipalité régionale de comté de Pontiac;
  • the urban agglomeration of La Tuque, as described in section 8 of the Act respecting the exercise of certain municipal powers in certain urban agglomerations.
Application date

These changes will apply to qualified expenditures incurred after March 27, 2018, in respect of eligible training periods beginning after that date.

For more information, see pages A.69 and A.74 of the Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

Changes to the Tax Credit for On-the-Job Training Periods

Thu, 05/31/2018 - 09:28

To encourage employers to offer more training periods to Aboriginal people and, consequently, increase their participation in the labour market, the rate of the refundable tax credit for on-the-job training periods has been raised in respect of such trainees.

In addition, both the weekly qualified expenditure limit and the maximum hourly rate have been increased for all existing categories of eligible trainees for the purposes of this tax credit.

Lastly, to encourage employers to offer more training periods in resource regions, the rate of the tax credit has been increased for qualified training periods in these regions.

Aboriginal trainees

Tax legislation will be amended so that a rate of 32% for corporations and 16% for individuals applies where an eligible employer makes a qualified expenditure in respect of an eligible trainee who is an Aboriginal person.

In addition, tax legislation will be amended so that an Aboriginal person means a person who is, at any given time during an eligible training period:

  • an Indian registered pursuant to the Indian Act; or
  • an Inuit beneficiary pursuant to the Act respecting Cree, Inuit and Naskapi native persons.

Lastly, tax legislation will be amended to raise the rates as follows, where an eligible employer makes a qualified expenditure in respect of a trainee who is an Aboriginal person enrolled in an education program or a prescribed program:

  • from 32% to 50% for corporations;
  • from 16% to 25% for individuals.

However, for a taxation year, an eligible employer may benefit from the higher rates in respect of a trainee who is an Aboriginal person enrolled in an education program or a prescribed program, only if the eligible employer's qualified expenditure in respect of such a trainee is at least $2,500 for at least three consecutive taxation years or, in the case of a partnership, for at least three consecutive fiscal periods.

Increase in the weekly limit and the maximum hourly rate

The weekly limit will be raised to:

  • $875 per week for eligible trainees enrolled in a prescribed program, or disabled eligible trainees who are apprentice trainees or trainees enrolled in an education program;
  • $1,225 per week for disabled eligible trainees enrolled in a prescribed program;
  • $700 per week in the case of all other eligible trainees.

Accordingly, tax legislation will be amended to increase the hourly rates from $18 to $21 for an eligible trainee and from $30 to $35 for an eligible supervisor.

Increase respecting resource regions

Tax legislation will be amended so that a rate of 32% for corporations and 16% for individuals applies where an eligible employer makes a qualified expenditure in respect of an eligible trainee who serves an eligible training period in an establishment, of the eligible employer, located in an eligible region.

Tax legislation will also be amended to raise as follows the rates of the tax credit in respect of an eligible trainee enrolled in an education program or a prescribed program who serves an eligible training period, in an establishment, of an eligible employer, located in an eligible region:

  • from 32% to 50% for corporations;
  • from 16% to 25% for individuals.

However, for a taxation year, an eligible employer may benefit from the higher rates in respect of a trainee enrolled in an education program or a prescribed program, only if the eligible employer's qualified expenditure in respect of such a trainee is at least $2,500 for at least three consecutive taxation years or, in the case of a partnership, for at least three consecutive fiscal periods.

For the purposes of this amendment, the following resource regions are considered eligible regions:

  • the administrative regions described in the Décret concernant la révision des limites des régions administratives du Québec:
    • administrative region 01 Bas-Saint-Laurent,
    • administrative region 02 Saguenay–Lac-Saint-Jean,
    • administrative region 08 Abitibi-Témiscamingue,
    • administrative region 09 Côte-Nord,
    • administrative region 10 Nord-du-Québec,
    • administrative region 11 Gaspésie–Îles-de-la-Madeleine;
  • the following regional county municipalities:
    • Municipalité régionale de comté d'Antoine-Labelle,
    • Municipalité régionale de comté de La Vallée-de-la-Gatineau,
    • Municipalité régionale de comté de Mékinac,
    • Municipalité régionale de comté de Pontiac;
  • the urban agglomeration of La Tuque, as described in section 8 of the Act respecting the exercise of certain municipal powers in certain urban agglomerations.
Application date

These changes will apply to qualified expenditures incurred after March 27, 2018, in respect of eligible training periods beginning after that date.

For more information, see pages A.69 and A.74 of the Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

Enhanced Independent Living Tax Credit for Seniors

Wed, 05/30/2018 - 08:31

As of the 2018 taxation year, the independent living tax credit for seniors will enable more seniors to obtain items needed to maximize their independence and ensure their safety. Accordingly, the threshold at which the tax credit may be claimed in respect of expenses paid for qualified property has been reduced to $250 and the list of qualified property expanded.

The tax credit will be equal to 20% of the amount that exceeds $250 after the total of the amounts paid for the acquisition or rental, including installation costs, of qualified property intended for use in the individual's principal place of residence has been calculated. The amount must have been paid in the year by an individual or by the person who is the individual's spouse at the time of payment.

The following items have been added to the list of qualified property:

  • alert systems for individuals with hearing impairments
  • hearing aids
  • walkers
  • rollators
  • canes
  • crutches
  • non-motorized wheelchairs

For more information, see pages A.36 to A.38 of Additional Information 2018–2019 (PDF – 3.73 MB) published by the Ministère des Finances.

Enhanced Independent Living Tax Credit for Seniors

Wed, 05/30/2018 - 08:31

As of the 2018 taxation year, the independent living tax credit for seniors will enable more seniors to obtain items needed to maximize their independence and ensure their safety. Accordingly, the threshold at which the tax credit may be claimed in respect of expenses paid for qualified property has been reduced to $250 and the list of qualified property expanded.

The tax credit will be equal to 20% of the amount that exceeds $250 after the total of the amounts paid for the acquisition or rental, including installation costs, of qualified property intended for use in the individual's principal place of residence has been calculated. The amount must have been paid in the year by an individual or by the person who is the individual's spouse at the time of payment.

The following items have been added to the list of qualified property:

  • alert systems for individuals with hearing impairments
  • hearing aids
  • walkers
  • rollators
  • canes
  • crutches
  • non-motorized wheelchairs

For more information, see pages A.36 to A.38 of Additional Information 2018–2019 (PDF – 3.73 MB) published by the Ministère des Finances.

Simplified Salary Overpayment Correction Process

Mon, 05/28/2018 - 15:15

Salary overpayments occur when, because of a clerical, administrative or computer error, an employer pays an employee salary to which he or she was not entitled. To make things easier for both employers and employees, we have harmonized our administrative policy on the repayment of salary overpayments with that of the Canada Revenue Agency.

Under our new policy, salary overpayments can be repaid based on the employee's net salary (gross salary overpaid minus source deductions) if the following conditions are met:

  • The overpayment is repaid in the calendar year in which the error occurred.
  • The employer is able to subtract the overpaid source deductions and employer contributions from its next remittance to Revenu Québec, and the remittance is made for the calendar year in question.

If either condition is not met, the new policy does not apply. The employee must then repay the gross salary overpaid, and the employer must remit the related source deductions and employer contributions. 

The Guide to Filing the RL-1 Slip: Employment and Other Income (RL-1.G-V) will be updated at a later date to reflect the changes.

Simplified Salary Overpayment Correction Process

Mon, 05/28/2018 - 15:15

Salary overpayments occur when, because of a clerical, administrative or computer error, an employer pays an employee salary to which he or she was not entitled. To make things easier for both employers and employees, we have harmonized our administrative policy on the repayment of salary overpayments with that of the Canada Revenue Agency.

Under our new policy, salary overpayments can be repaid based on the employee's net salary (gross salary overpaid minus source deductions) if the following conditions are met:

  • The overpayment is repaid in the calendar year in which the error occurred.
  • The employer is able to subtract the overpaid source deductions and employer contributions from its next remittance to Revenu Québec, and the remittance is made for the calendar year in question.

If either condition is not met, the new policy does not apply. The employee must then repay the gross salary overpaid, and the employer must remit the related source deductions and employer contributions. 

The Guide to Filing the RL-1 Slip: Employment and Other Income (RL-1.G-V) will be updated at a later date to reflect the changes.

Simplified Salary Overpayment Correction Process

Mon, 05/28/2018 - 15:15

Salary overpayments occur when, because of a clerical, administrative or computer error, an employer pays an employee salary to which he or she was not entitled. To make things easier for both employers and employees, we have harmonized our administrative policy on the repayment of salary overpayments with that of the Canada Revenue Agency.

Under our new policy, salary overpayments can be repaid based on the employee's net salary (gross salary overpaid minus source deductions) if the following conditions are met:

  • The overpayment is repaid in the calendar year in which the error occurred.
  • The employer is able to subtract the overpaid source deductions and employer contributions from its next remittance to Revenu Québec, and the remittance is made for the calendar year in question.

If either condition is not met, the new policy does not apply. The employee must then repay the gross salary overpaid, and the employer must remit the related source deductions and employer contributions. 

The Guide to Filing the RL-1 Slip: Employment and Other Income (RL-1.G-V) will be updated at a later date to reflect the changes.

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