What's new for my 2023 personal taxes?
As we approach the 2023 tax season with a deadline of April 30, 2024, for most Canadian taxpayers, it’s crucial to stay informed about the new changes to personal taxes that could affect your tax return. This year brings several updates that aim to support individuals and families, enhance benefits, and introduce new tax credits. Here’s a comprehensive overview of what’s new for the 2023 personal tax returns.
1. Electronic Payments for Large Amounts
Starting January 1, 2024, any payments over $10,000 to the Receiver General must be made electronically. This change promotes efficiency and reduces the reliance on physical checks. Failure to comply could result in penalties unless it’s not reasonably possible to make the payment electronically.
2. Advanced Canada Workers Benefit (ACWB)
The ACWB now provides automatic advance payments to those who received the Canada workers benefit in the previous year, simplifying the process and eliminating the need for the Form RC201 application. Reporting of amounts from your RC210 slip has also been updated for ease of filing.
3. Climate Action Incentive Payment (CAIP)
The government plans to double the rural supplement of the CAIP to 20% from April 2024, maintaining the 2016 Census metropolitan areas for determining eligibility for the 2023 and 2024 tax years.
4. Increased Deduction for Tradespersons’ Tools
The maximum employment deduction for eligible tools purchased by tradespersons and apprentice mechanics has been increased from $500 to $1,000, starting in 2023. This change is designed to support tradespersons in acquiring the tools they need for their trade.
5. COVID-19 Benefit Repayments
For repayments made after December 31, 2022, taxpayers can claim a deduction on their 2023 tax return, offering some relief for those who had to return overpaid benefits.
6. First Home Savings Account (FHSA)
A new registered plan to assist individuals in saving for their first home. Contributions to an FHSA are deductible, and withdrawals made to purchase a qualifying home are tax-free.
7. Multigenerational Home Renovation Tax Credit (MHRTC)
This new refundable tax credit is available for renovations that create a secondary dwelling unit within an existing home, allowing families to live together. Eligible individuals can claim up to $50,000 in qualifying expenses.
8. Property Flipping Rule
Starting January 1, 2023, gains from the disposition of residential properties owned for less than 365 days are considered business income, aimed at discouraging speculative property flipping.
9. Return of Fuel Charge Proceeds to Farmers Tax Credit
A new credit for self-employed farmers in specific provinces, providing a return of a portion of fuel charge proceeds.
10. Temporary Flat Rate Method Discontinued
The temporary flat rate method for claiming home office expenses does not apply to 2023. Taxpayers must use the detailed method and obtain Form T2200 from their employer.
These changes reflect the government’s ongoing efforts to adapt the tax system to meet the evolving needs of Canadians, promote sustainability, and support economic recovery. Taxpayers should review these updates closely to understand how they may impact their tax filings and take advantage of new credits and deductions available.
For more detailed information on each of these updates, visit the Canada Revenue Agency’s official website
Eric Saumure, CPA, CA, is co-founder and Principal of Zenbooks, an online cloud-native accounting firm started in 2015 to serve 300+ Canadian small and mid-sized businesses. Before Zenbooks, Eric spent 3 years at KPMG. He specializes in financial strategy for growth-stage companies in the $1M-$10M revenue range, with a particular focus on marketing and creative agencies, SaaS, and professional services firms, e-commerce and non-profits.
Eric's commentary on Canadian small business, tax policy, and open banking has appeared in the Toronto Star, Canadian Press, CTV, CBC, Le Devoir, Policy Options, The Conversation, and Canadian Accountant. He was named to the OBJ Ottawa Forty Under 40 and recognized on both the Financial Times Americas' Fastest Growing Companies 2026 list and the Globe and Mail's Report on Business Top Growing Companies 2024. He is the principal researcher behind the Zenbooks Technology in Accounting Study, a national survey of 500 Canadian SMEs on accounting technology adoption, and the founder of OpenSME, a Canadian open banking advocacy organization. He serves on the board of Cystic Fibrosis Canada and member of the Montfort Hospital Association.
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