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2009 Tax Changes (Tax Year 2008)

Personal Income Tax
Reducing Tax Compliance Burden
RESP'S - Education Saving Plans
GST Reduction

Personal Income Tax

	A new $2,038 child tax credit will provide up to $310 per child of tax relief to more than 3 million Canadian families.
	Ending the marriage penalty by increasing the spousal and other amounts to provide up to $209 of tax relief for a supporting spouse or single taxpayer that is supporting a child or relative.
	Extending the public transit tax credit to innovative fare products like electronic fare cards and weekly passes when used on an ongoing basis.
	Increasing the lifetime capital gains exemption for farmers, fishermen and fisherwomen, and small business owners from $500,000 to $750,000.
	Enacting the Tax Fairness Plan, which delivers over $1 billion in additional tax savings for Canadians including: Increasing the age credit amount to $5,276. Allowing pension income splitting.
	Encouraging older workers to stay in the labour market by permitting phased retirement. This would allow an employer to simultaneously pay a partial pension to an employee and provide further pension benefit accruals to the employee.
	Increasing the age limit from 69 to 71 for converting a registered retirement savings plan (RRSP) to strengthen incentives for older Canadians to work and save.
	Amending the list of qualified investments that can be held by RRSPs and other registered plans to include most investment-grade debt and publicly-listed securities.
	Increasing the share of meal expenses that long-haul truck drivers can deduct for tax purposes from 50 to 80 per cent.

Reducing Tax Compliance Burden:

To further reduce the paperwork burden of small business, Budget proposes to allow small businesses to reduce the number of tax remittances and filings by:

	Introducing quarterly instalments of corporate income tax to replace monthly instalments for certain small Canadian-controlled private corporations.
	Increasing to $3,000 from $1,000 the corporate income tax payable threshold, at or below which corporations are eligible to remit annually.
	Increasing to $3,000 from $2,000 the net personal income tax threshold, at or below which individuals do not have to pay instalments.
	Increasing to $3,000 from $1,000 the average monthly withholdings threshold, below which businesses may be eligible to remit source deductions quarterly.
	Increasing to $1.5 million from $500,000 the taxable supplies threshold, at or below which businesses can file a GST/HST return annually.
	Increasing to $3,000 from $1,500 the net tax threshold, below which annual GST/HST return filers can remit the tax annually.

RESP'S - Education Saving Plans

Budget proposes changes that will provide additional flexibility and encourage greater savings in these plans by:

	Eliminating the $4,000 limit on annual RESP contributions.
	Increasing the lifetime limit on RESP contributions—for the first time since 1996—to $50,000 from $42,000.
	Increasing the maximum annual amount of CESG that can be paid in any year to $500 from $400 (and to $1,000 from $800 if there is unused grant room from low contributions made in previous years).

Each child will continue to be eligible to receive up to $7,200 in CESGs

GST Reduction

The GST/HST will be lowered by 1% as of January 1, 2008. This will result in the GST rate being 5% and the HST rate will be 13%. The GST credit for low- and middle-income Canadians will remain at its current levels.