Tax developments for 2024

Our team delved into the subject of tax developments and drafted a summary of the major changes that will affect individuals’ 2023 income tax returns.

For federal purposes:

A new T4FHSA slip will be issued where an FHSA transaction that affects a tax return took place:

Schedule 15 must be completed if:

• An FHSA was opened during the year
• FHSA contributions were made
• Funds were transferred from an RRSP to an FHSA
• A designated withdrawal from an FHSA was made
• A qualifying withdrawal from an FHSA was made

Teleworking expenses:

You can no longer use the flat rate method for teleworking expenses. You must use the detailed method to claim expenses once you have received Form T2200 duly completed by your employer.

Early sale of residential property:

Since January 1, 2023, profit on the sale of a residence that you owned for less than 365 consecutive days before its disposition is deemed to be business income. Realizing a non-capital loss will no longer be possible. Please note that claiming the profit as business income allows you to deduct expenses such as mortgage interest and insurance.

Exceptions to the presumption of business income:

• Death
• Addition to the household
• Separation
• Personal safety
• Disability or illness
• Change of employment
• Insolvency
• Involuntary disposition

Multigenerational Home Renovation Tax Credit

The federal government has introduced a new refundable tax credit for the renovation of multigenerational homes.

A qualifying renovation would be one that creates a secondary unit where a qualifying individual (a senior or a person with a disability) can live with a qualifying relation. The value of the credit is 15% of the lesser of qualifying expenditures and $50,000. The maximum credit is $7,500.

How can individuals qualify for this credit?

• The renovation period begins at the time the municipality authorizes the commencement of the work and ends when work has been completed.
• The credit can be claimed for the year during which the work was completed.

Please note:

• Individuals may only claim one credit during their lifetime.
• A maximum of $50,000 in eligible expenditures may be claimed.
• If more than one taxpayer is eligible for the credit, they must agree as to how to split the amount.
• The eligible individual must be resident in Canada throughout the taxation year.

What type of renovation or transformation work is deemed eligible?

• The renovation is of an enduring nature and integral to the eligible dwelling.
• The renovation is undertaken to enable the qualifying individual to reside in the dwelling with a qualifying relation.

This may include:

• Goods acquired or services received, including work performed by professionals.
• Expenditures incurred for required permits.
• The rental of equipment used in the course of the renovation.

For provincial purposes:

A new RL-32 slip will be issued where an FHSA transaction that affects a tax return occurred.

Senior Assistance Tax Credit – Quebec

This refundable senior assistance tax credit is available for individuals aged 70 or over on December 31. Eligible individuals may be entitled to a maximum credit of $2,000 (maximum credit for an eligible couple is $4,000).

This credit is calculated on the basis of the family income. The income thresholds at which seniors will not be entitled to the tax credit are:

• $64,515 for an eligible senior living alone.
• $119,404 for an eligible senior and their spouse who is eligible.
• $80,645 for an eligible senior and their spouse who is not eligible.

Please note:

From January 1, 2024, workers aged 65 years or older may choose to stop paying QPP contributions. Workers over 72 years of age will not be obliged to contribute to the QPP.

Tax Credit for Seniors’ Activities

The refundable tax credit for seniors’ activities was eliminated as of 2023.

To find out more about 2023 tax changes, consult Raymond Chabot Grant Thornton’s 2023 Tax Planning Guide here.

If you’re not sure which documents you need to gather to file your tax returns, this checklist will help you save time. CLICK HERE.

Regardless of your needs, our experts are here to help you prepare your income tax returns.