1.   Personal Amounts and Income Tax Brackets

Budget 2009 proposes to increase the basic personal amount and the two lowest personal income tax brackets effective January 1, 2009.

• the basic personal amount, the spousal and common-law partner amount, and the eligible dependant amount will increase to $10,320 from $9,600 in 2008,

• the upper limit of the first personal income tax bracket will increase to $40,726 in 2009 from $37,885 in 2008, and

• the upper limit of the second personal income tax bracket will increase to $81,452 in 2009 from $75,769 in 2008.

 

2. Working Income Tax Benefit (WITB)

Budget 2009 proposes to double this WITB relief (which is currently up to $510 for singles and $1020 for families) for the 2009 and subsequent taxation years.

 

3. Age Credit

The amount on which the Age Credit is based will be increased by $1,000 to $6,408, effective January 1, 2009.

 

4. Home Renovation Tax Credit

Budget 2009 proposes to introduce a temporary Home Renovation Tax Credit (HRTC).

Individuals will be able to claim a 15-per-cent non-refundable tax credit.

The credit will apply to expenditures made after January 27, 2009 and before February 21, 2010 in excess of $1,000, but not more than $10,000, resulting in a maximum credit of $1,350 ($9,000 x 15%).

Family members will be subject to a single limit based on their pooled expenditures.

Two or more families that share ownership of an eligible dwelling will each be eligible for their own credit.

In general, a housing unit is considered to be eligible if it is an individual’s principal residence. This also includes condominiums and co-operative housing.

Expenditures will qualify for the HRTC if they are incurred in relation to a renovation or alteration of an eligible dwelling (including land that forms part of the eligible dwelling).

Expenditures not eligible for the credit include:

• routine repairs and maintenance,

• appliances and audio-visual electronics, and

• financing costs associated with a renovation.

 

5. Home Buyers Plan (HBP)

Budget 2009 proposes to increase the HBP withdrawal limit to $25,000 from $20,000.  This increase will apply to the 2009 and subsequent calendar years in respect of withdrawals made after January 27, 2009.

 

6. First-Time Home Buyers` Tax Credit

Budget 2009 proposes to introduce a new non-refundable tax credit based on $5,000 for first-time home buyers who acquire a qualifying home after January 27, 2009 (i.e. the closing is after that date).

1. Small Business Limit

Budget 2009 proposes that the annual amount of active business income eligible for the reduced tax rate –generally referred to as the “small business limit” – be increased as of January 1, 2009 to $500,000 from $400,000.

The increase will be pro-rated for corporations with non-December 31 taxation years.

 

2. Computers:  Accelerated CCA

In general, computers acquired after March 18, 2007, are included in Class 50 and are eligible for a 55-per-cent declining-balance CCA rate.

Budget 2009 proposes a temporary 100-per-cent CCA rate for eligible computers and software acquired after January 27, 2009 and before February 2011.  This 100-per-cent CCA rate will not be subject to the half-year rule.