To help you with the upcoming tax season, especially your tax return, we took a look at what’s new for individuals’ income tax for the 2021 tax year. Here are some major changes you should know about.
1. New federal and provincial developments
1.1 Telework – Simplified method
If you had to work from home for the 2021 year because of the pandemic and you were not reimbursed by your employer, you can claim a deduction for home office expenses such as paper, ink cartridges, internet usage for telework and others, for both provincial and federal purposes.
- This year, the federal and provincial governments authorize a $2 flat rate for each day of work at home up to a maximum of $500.
- There is no obligation to provide the T2200 and TP 64.3-V forms.
For more information about eligibility criteria or to benefit from the simplified method, consult the following information:
1.2 Automobile expenses
- The depreciable value ceiling for vehicles in Class 10.1 has risen from $30,000 to $34,000.
- The depreciable value ceiling for zero-emission vehicles in Class 54 has risen from $55,000 to $59,000.
- Automobile lease expenses have risen from $800 to $900 per month, for new lease agreements.
2. New federal developments
2. 1 Emergency benefits
If, in 2021, you reimbursed amounts for benefits related to COVID-19 (CRSB, CRB, CRCB, CERB OR CESB) that you received in 2020:
- The amount reimbursed will be indicated in box 201 of form T4A or on form T4E box 30 with the other employment insurance reimbursed amounts;
- You may elect to claim a deduction on the 2020 return in the year in which the benefit was received or in the year in which it was reimbursed.
2.2 Remote zones
If you live in a remote zone and your employer does not provide you with taxable travel benefits, you can claim the travel deduction starting in 2021. Formerly, this amount could only be deducted if you had a taxable benefit.
- The deduction that can be claimed applies to a maximum of two trips that you and each of your eligible family members took for personal non-medical reasons.
- Any number of trips that you or an eligible family member made for medical reasons.
The deduction is limited to a total of two personal non-medical trips made by a person for the year by all taxpayers.
2.3 Postdoctoral Fellowship Income
This income will henceforth be included in the income earned for RRSP purposes.
3. New provincial developments
3.1 Remote zones
If you live in a remote zone and your employer does not provide you with taxable travel benefits, you can claim a travel deduction of up to:
- $1,200, if you live in a northern zone;
- $600, if you live in an intermediate zone.
3.2 Child Care Expenses
For the 2021 tax year, you can claim the childcare tax credit, if you receive:
- Employment insurance benefits;
- amounts related to the Canada Emergency Response Benefit (CERB);
- the Canada Recovery Sickness Benefit (CRSB);
- the Canada Recovery Caregiving Benefit (CRCB);
- the Canada Worker Lockdown Benefit (CWLB).
To learn more about the 2021 changes to individuals’ taxation, consult the Raymond Chabot Grant Thornton Tax Planning Guide.
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