Most Covid-19 Benefits Are Taxable Income
Working From Home Expense
In addition to the usual method to claim working from home expenses, there are now 2 additional simplified methods that apply specifically to working from home because of COVID-19.
The Temporary Flat Rate method requires you to keep no receipts and you do not need a form signed by your employer. You may claim $2/day up to $400 as long as you worked from home at least 50% of the time for 4 consecutive weeks.
The new Simplified Detailed Method allows you to write off a portion of your actual expenses while working from home. You and your accountant will work out a reasonable percentage based on the square footage of your office and the time that space is used for work. This method does require a simplified form signed by your employer and you must have your receipts but it could be beneficial for your tax return to put in the extra work.
Climate Action Incentive Payments
Better known as the ‘carbon tax’ payments, individuals residing in Alberta fall under the Federal carbon tax system and are eligible for a refundable tax credit of $490 for a single adult up to $981 for a family of four. In addition, if you live outside of a metropolitan area you may be eligible for an additional 10% top up (in Alberta that includes Edmonton, Calgary, and Lethbridge).
In Saskatchewan, a single adult will receive $500 and a family of four up to $1000.
In Manitoba, a single adult will receive $360 and a family of four up to $720.
In Ontario, a single adult will receive $300 and a family of four up to $600.
Sale of Your Principle Residence
When you sell your home, or when you are considered to have sold it, usually you do not have to pay tax on any gain from the sale. This is the case if the property was solely your principal residence for every year you owned it. Starting in 2016, if you sold your principal residence, and it was your principal residence for every year you owned it, you must report the sale on your personal tax return.
Canada Training Credit
Starting with the 2020 tax year, Canadian residents aged 26-65 with tuition paid to an eligible education institution will be able to claim a refundable tax credit of up to $250 per year. This is a cumulative tax credit so if you don’t use $250 in 2020 you can use $500 in 2021, $750 in 2022, etc up to a lifetime limit of $5000.
More details can be found here
First Time Home Buyers Incentive
The First Time Home Buyers Incentive is a shared-equity program that could help you with a 5% or 10% down payment on your home purchase to reduce your borrowing costs. The program is non-interest bearing and does not require ongoing payments but the government shares in the equity of your home and therefore both you and the government will share in the appreciation or deprecation of the home. The incentive is repaid at the earlier of when the house is sold and 25 years.
More information can be found here
