11 Mar What’s new in 2019? The Tax Changes You Should Be Aware Of
By Bilal Kathrada
Originally published by CPABC’s Industry Update.
Tax season can be a stressful time for Canadians. Getting a head start with filing your personal taxes and understanding changes for the coming tax year can help you better prepare for your income tax filing. It can also help relieve the stress that comes with not understanding your return and rushing to file before the deadline. Here are some of the new tax changes you should be aware of when filing your return in 2020 for the 2019 tax year.
Share benefits with your partner
Effective March 17, 2019, the parental sharing benefit will provide an additional five weeks of Employment Insurance benefits when both parents share these benefits, or an additional eight weeks for those who choose the extended parental benefit option. This incentive is intended to encourage both parents to take some leave when welcoming a new child.
Save more with your TFSA
Contribute more to CPP and less to EI
As of January 1, 2019, our Canada Pension Plan (CPP) contributions have gone up, and will continue to increase for the next four years. At the start of this year, CCP contributions increased from 4.95% to 5.1% on earnings between $3,500 and $57,400.
If you make an annual salary of $51,000, you can expect to pay an additional $71.25 in your 2019 CPP contributions. This amount will be matched by the employer. Note that CPP contributions will be increasing every year until 2023, when the rate will reach 5.95%.
Partially offsetting our increased CPP contributions will be a decrease in Employment Insurance (EI) premiums, which will drop from $1.66 to $1.62 per $100 of insurable earnings. The maximum insurance earnings for 2019 is now $53,100 ($51,700 in 2018).
Pay half of your MSP
Your BC Medical Services Plan (MSP) premium will remain the same this year, after reducing by half in 2018, and will be fully eliminated by 2020. A new BC Employer Health Tax is now in effect to cover the costs of MSP premiums.
Claim your speculation and vacancy tax exemption
Don’t forget to complete your annual declaration for the speculation and vacancy tax, if you live in Metro Vancouver, Kelowna, West Kelowna, parts of the Fraser Valley, the Capital Regional District, Nanaimo, or Lantzville. If you share the property with your partner, both of you must complete the declaration by March 31, 2019. The Province of BC will send you a speculation and vacancy tax declaration letter in the mail by mid-February. If you have not received one by the end of February, you should contact the Province as the deadline to complete the declaration is March 31st.
Not registering your household as exempt will result in an additional tax bill charged to you this summer, based on the assessed value of your home.