Filing Your CRA Tax Return: What’s New in 2018?
Each year, the CRA makes changes to income tax brackets and certain tax credits. It also makes improvements to benefits and services that are available to Canadians.
Keep reading to learn more about CRA tax brackets in 2018, along with major changes to Canadian income tax rules, credits, and services for the 2017 tax year.
What is the 2018 Deadline to File Your Taxes on Time?
In 2018, the filing deadline is Monday, April 30. If either you or your spouse or common-law partner are self-employed, the deadline is extended until June 15, 2018, although any balances owing are still due April 30. The earliest you can file online is February 26, 2018.
Late filers can expect to pay a penalty of 5 percent of their balance owing, plus 1 percent of their outstanding balance for each month their return is late, up to 12 months. Outstanding balances are also subject to interest charges, which compound daily. These interest charges will accrue on late-filing penalties as well.
What are Some of the Changes to Canadian Tax Credits in 2018?
In 2018, there is one new credit and two improved credits Canadians should know about.
The Canada Caregiver Credit
This non-refundable tax credit was created to replace the family caregiver credit, the credit for infirm dependents above the age of 18 and the caregiver credit. If you live with a spouse, child, parent or other dependent with impaired physical or mental abilities, this credit may apply to you.
The Disability Tax Credit (DTC)
Although this tax credit is not new, applications for the credit can now be certified by nurse practitioners across Canada.
The Medical Expenses Tax Credit
Expenses incurred to conceive a child are now eligible to be claimed under this credit. The credit applies even if you have no other medical conditions. It is retroactive, which means you can request a change to your income tax returns over the last ten years in order to include fertility-related expenses.
New Tax-Related Services from the CRA in 2018
Tax Forms and Guides
Are you in the habit of submitting your tax return through the mail? In 2018, the CRA will start mailing income tax forms to Canadians who file paper returns. This means you will no longer need to go to Canada Post, Caisse Populaire Desjardins, or Service Canada locations to pick up your printed tax forms and guides.
File Your Taxes Over the Phone
File My Return is a new service created by the CRA to allow Canadians with low or fixed incomes to file their taxes over the phone. The process involves answering a few questions via an automated service.
The service is free, secure and easy to use. It doesn’t involve any forms or calculations. Eligible individuals will receive a letter inviting them to use the service, which will be available between February 26 and April 30, 2018.
The CRA BizApp
In 2018, small business owners can download the new CRA BizApp. This mobile application is available 21 hours a day (from 6 a.m. to 3 a.m. EST) and makes it possible to access the following accounts:
• Corporation income tax
• Excise duty
• GST/HST accounts (unfortunately, the app does not grant access to accounts managed by Revenu Québec).
With the new CRA BizApp, you can also view and pay outstanding balances, view your transactions, see your anticipated GST/HST returns and consult the status of your GST/HST return or corporate income return.
To sign into the app, you will need to use the same login credentials you use for other online services offered by the CRA. If you do not yet have a CRA user ID and password, you will need to register for access. If you are a small business owner or sole proprietor, you can do this by visiting the CRA’s My Business Account.
Express Notice of Assessment (NOA)
If you need your NOA quickly (for example, if you need to apply for a loan or produce a proof of income for another reason), you can now use Express NOA. The service makes it possible to receive an electronic version of your notice of assessment via your certified tax software soon after filing your electronic return.
To be eligible to use the service, you must be registered for My Account, be registered for online mail from the CRA and file your return electronically using NETFILE-certified tax software like Ufile or TurboTax.
Adjust Your Return Using ReFILE
ReFILE is a new service that allows you to make changes to your return by using the NETFILE-certified tax software of your choice. This can be done anytime after you receive your Notice of Assessment.
Online Mail in My Account
This year, the CRA is making it possible for individuals to receive even more information via My Account. More specifically, online mail will now allow correspondence about tax-free savings accounts (TFSAs), notices of assessments, benefit notices and slips and more.
Pay Your Taxes in Person
Paying your taxes in person is getting easier in 2018, as you can now pay individual taxes, benefits and credit repayments by cash or debit card at any Canada Post location. To use this service, you will need to create a personalized QR code online.
Protect Your Account with Automated Alerts
The CRA is making its services more secure this year by adding an electronic alerts function. This means you will receive an e-mail about recent activity to prevent unauthorized changes from being made to your account.
Auto-fill Your Return
This service lets individuals and authorized representatives such as your CPA or tax preparation professional automatically fill in certain parts of your return for 2015, 2016, and 2017. This is done by using information the CRA has on file for you at the time your return is filed.
Changes to Credits and Amounts
Tuition, Education, and Textbook Credits
These credits were eliminated on January 1, 2017. Unused amounts can still be carried over from previous years.
The children’s art tax credit and children’s fitness tax credit were eliminated January 1, 2017.
Public Transit Tax Credit
This credit was eliminated July 1, 2017. This means that Canadians will only be able to claim the cost of eligible public transit expenses from January 1 to June 30, 2017.
Changes to Federal Tax Brackets in 2018
Canada’s federal tax brackets are generally raised every year. In 2018, the federal tax rates and income brackets are as follows:
|$0 - $46,605||15%|
|$46,605 - $93,208||20.5%|
|$93,208 - $144,489||26%|
|$144,489 - $205,842||29%|
|$205,842 and above||33%|
Canadian tax brackets are organized in such a way that all Canadians pay the same tax rate on the portion of income earned in that tax bracket.
For instance, if you make $50,000 per year, you will not be taxed at 20.5 percent on the totality of your income. Rather, you will pay 15 percent tax on your first $46,605 of income (minus your personal amount), and 20.5 percent on the $3,395 you earned above $46,605.
Provincial Tax Brackets for 2018
In addition to federal taxes, Canadians have provincial income taxes to pay. In 2018, these rates by province or territory are as follows:
|Canadian Province or Territory||Income||Rates|
|Newfoundland and Labrador||$0 - $36,926||8.7%|
|$36,926 - $73,852||14.5%|
|$73,852 - $131,850||15.8%|
|$131,850 - $184,590||17.3%|
|$184,590 and above||18.3%|
|Prince Edward Island||$0 - $31,984||9.8%|
|$31,984 - $63,696||13.8%|
|$63,696 and above||16.7%|
|Nova Scotia||$0 - $29,590||8.79%|
|$29,590 - $59,180||14.95%|
|$59,180 - $93,000||16.67%|
|$93,000 - $150,000||17.50%|
|$150,000 and above||21.00%|
|New Brunswick||$0 - $41,675||9.68%|
|$41,675 - $83,351||14.82%|
|$83,351 - $135,510||16.52%|
|$135,510 - $154,382||17.84%|
|$154,382 and above||20.30%|
|Quebec||$0 - $43,055||15.00%|
|$43,055 - $86,105||20.00%|
|$86,105 - $104,765||24.00%|
|$104,765 and above||25.75%|
|Ontario||$0 - $42,960||5.05%|
|$42,960 - $85,923||9.15%|
|$85,923 - $150,000||11.16%|
|$150,000 - $220,000||12.16%|
|$220,000 and above||13.16%|
|Manitoba||$0 - $31,843||10.80%|
|$31,843 - $68,821||12.75%|
|$68,821 and above||17.40%|
|Saskatchewan||$0 - $45,225||10.5%|
|$45,225 - $129,214||12.50%|
|$129,214 and above||14.50%|
|Alberta||$0 - $128,145||10.00%|
|$128,145 - $153,773||12.00%|
|$153,773 - $205,031||13.00%|
|$205,031 - $307,547||14.00%|
|$307,547 and above||15.00%|
|British Columbia||$0 - $39,676||5.06%|
|$39,676 - $79,353||7.70%|
|$79,353 - $91,107||10.50%|
|$91,107 - $110,630||12.29%|
|$110,630 - $150,000||14.70%|
|$150,000 and above||16.80%|
|Yukon||$0 - $46,605||6.40%|
|$46,605 - $93,208||9.00%|
|$93,208 - $144,489||10.90%|
|$144,489 - $500,000||12.80%|
|$500,000 and above||15.00%|
|Northwest Territories||$0 - $42,209||5.90%|
|$42,209 - $84,420||8.60%|
|$84,420 - $137,248||12.20%|
|$137,248 and above||14.05%|
|Nunavut||$0 - $44,437||4.00%|
|$144,488 and above||11.5%|
So, there you have it. The major changes that will affect your 2018 income tax return. Do any of these changes surprise you? Let us know in the comments!