What’s new for 2014 tax-filing season?

Below is the list of some new or improved tax relief measures and services that you should be aware of when filing your 2013 income tax return. Let’s call it good news:

First-time donor’s super credit – This new credit for first-time donors gives an extra 25% credit for cash donations when you claim your charitable donations tax credit. This means you can get a 40% federal credit for up to $200 in donations and a 54% credit for the part of donations that is over $200 but not more than $1,000. This is in addition to the provincial credit.

Family caregiver amount – If you have a dependant with an impairment in physical or mental functions, the additional amount you may be able to claim has increased to $2,040 when calculating certain non-refundable tax credits.

Pooled registered pension plan (PRPP) – The PRPP is a new retirement savings option for individuals, including those who are self-employed.

Adoption expenses – The period to claim adoption expenses has been extended for adoptions finalized in 2013 and later years.

Investment tax credit – Eligibility for the mineral exploration tax credit has been extended to flow‑through share agreements entered into before April 1, 2014.

Tax-free savings account (TFSA) – The annual TFSA dollar limit increased to $5,500 on January 1, 2013, for the 2013 contribution year, and remains at that amount for the 2014 contribution year.

The lifetime cumulative amount for the capital gains deduction will be increased from $750,000 to $800,000 for the 2014 taxation year and will be indexed to inflation for subsequent taxation years.

As of 2014, beneficiaries of the Ontario Trillium Benefit may elect to receive their benefit as a lump sum.

Finally, 2013 T1 returns for newcomers who immigrated to Canada in the 2013 tax year will be eligible to be filed electronically starting February 10, 2014.

Other notable changes are either neutral or could bring some negative tax consequences.

The rates for the gross-up and dividend tax credit will be adjusted in regards to non-eligible dividends paid after 2013, effectively increasing the personal tax rate on such dividends.

For amounts assessed in respect of charitable donation tax shelters for 2013 and subsequent taxation years, the Canada Revenue Agency (“CRA”) will have the ability to collect 50% of the disputed tax, interest or penalties when an objection is filed.

The federal tax credit for a labour-sponsored venture capital corporation will gradually be eliminated starting in 2015.

Expenditures incurred for renting a safety deposit box will no longer be deductible for federal purposes for taxation years starting on or after March 21, 2013.

The CRA will launch a “Stop International Tax Evasion Program” under which it will pay rewards to individuals providing information on major international tax non-compliance that leads to $100,000 or more of additional federal tax assessments.

Form T1135 (Foreign Income Verification Statement) will be revised to obtain detailed information of a taxpayer’s “specified foreign property”, such as names of specific foreign institutions, countries in which offshore assets are located, and foreign income earned thereon. Further, failure to file Form T1135 will cause a taxpayer’s normal reassessment period to be extended.