The Certified General Accountants of Ontario advise of a number of provincial tax changes for filers this year:
Increased threshold for all income tax brackets
• Taxable income thresholds in all three Ontario provincial tax brackets were increased by 3.3% in 2012, reflecting changes to Canada's consumer price index (CPI) in Ontario. All indexed non-refundable tax credits also increased by 3.3%.
New high income tax bracket
• The Ontario government has introduced a new tax bracket. Beginning in 2012, individuals will be taxed at a rate of 12.16% on that portion of their income in excess of $500,000 annually. That will increase to 13.16% in 2013.
• This is supposed to be a temporary tax bracket until Ontario's deficit has been eliminated in several years.
Ontario Trillium Benefit
• Effective July 2012, the Ontario Trillium Benefit combines payments from the Ontario sales tax credit, Ontario energy and property tax credit, and Northern Ontario energy credit. Further details are available on page 117 in the chapter on Ontario Provincial Tax.
Healthy homes renovation tax credit
• In 2012, Ontario introduced a refundable Healthy Homes Renovation Tax Credit, which is designed to assist senior citizens with the cost of permanent home modifications required to improve accessibility or assist with mobility to and within their home.
• This credit is calculated as 15% on up to $10,000, or $1,500, to cover eligible annual expenses (wheelchair ramps, widening passage doors, hand rails in corridors), among other qualifying expenditures.
• Couples who are living together may only claim up to $10,000 in qualifying expenses in total. Family members who live with an elderly relative may claim this expense on behalf of the household. Couples who live separately because of medical or other reasons may each claim up to $10,000.
• For the 2012 tax year, eligible expenses will qualify for this credit if they were incurred between October 1, 2011 and December 31, 2012. In future years, expenses can only be incurred within the corresponding calendar year.
Additional information regarding federal and provincial tax changes is available online at www.cga.ontario.org.
