What you need to know when filing your 2021 income taxes – The Suburban Newspaper

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Updated: February 14, 2022 @ 6:21 pm
A tax specialist discusses home office expenses, the Canada workers benefit, the senior assistance tax credit and more.

A tax specialist discusses home office expenses, the Canada workers benefit, the senior assistance tax credit and more.
The deadline to file personal income taxes is April 30th, and it has been yet another year of unpredictable circumstances when it comes to income sources, tax credits, and support benefits related to COVID. “There were a lot of changes at the federal level, and in general new things that people should know,” said UFile’s Montreal-based national tax specialist, Gerry Vittoratos. Therefore, it’s important to know when filing your personal income taxes what is new or different.
Here’s what you need to know about changes to income taxes at both the federal and provincial levels:
– When it comes to home office expenses, the flat rate method is being extended into 2022. “They have increased the maximum deduction that you can claim from $400 to $500 if you worked from home because of COVID for at least four consecutive weeks,” Vittoratos explained. “This was offered last year, and they have extended it this year.”
– The Canada workers benefit (CWB), which is normally reserved for lower income individuals and families who have working income, is reduced progressively (meaning the more you make, the less you get until it gradually “phases out”). However, they have increased the “phase out” thresholds by around $10,000 for single individuals and families. The government has also introduced the “secondary earner exemption” for couples where you can exclude up to $14,000 of income gained by the lower income spouse when determining the credit. This will allow more couples to be eligible. “If you’re a couple, you use your combined income to determine how much credit you’ll be getting,” he said. “This means more people will be eligible and whoever is already eligible will be getting more money.”
– Some people were overpaid in Canada Emergency Response Benefits (CERB) or other Covid-related benefits, a common occurrence since the program started. “This happened a lot in 2020 and the government didn’t make it easy,” Vittoratos admitted. If you received an overpayment on your CERB in 2020, in 2021 you had to repay a portion of that. The good news is that you can now deduct the repayment in the same year as when you received the benefits, instead of the following year. “This was a nice change by the government.”
– The Quebec government introduced the exceptional cost of living allowance, a single, non-taxable lump-sum payment for 2021 that paid out an amount of $200 per adult and an additional amount of $75 per person living alone. “It was given to anybody who was eligible for the solidarity tax credit,” said Vittoratos.
– The senior assistance tax credit has increased the maximum amount that is allocated to eligible individuals. This credit is for people who are 70 years old and up, and who made less than the prescribed thresholds ($31,575 for seniors living alone, $54,340 for couples). Those who qualify will receive $800 if they had a spouse over 70 years of age on December 31, 2021, $400 if they had a spouse on December 31, 2021 but he or she was not an eligible individual, or only one of them was 70+ on December 31, 2021, and $400 if they did not have a spouse on December 31, 2021. “The government is essentially doubling the amount,” Vittoratos summed up.
– The terms of the tax credit for the treatment of infertility have drastically changed in recent months. “Last year, the provincial government reactivated the medically assisted procreation (MAP) program and enhanced the tax credit on the return,” Vittoratos said. “They now allow for an unlimited number of cycles to be eligible (whereas they used to cap it at three), and the cost of artificial insemination is eligible for a tax credit regardless of the woman’s age”. The maximum amount of expenses that can be claimed is $20,000, and the credit rate varies from 80% to 20% depending on your family income.
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