2022 Tax Changes – Individuals and Families

We have compiled a list of the changes that may affect you and your family this year for the 2022 Income Tax year.

– Labor mobility deduction for tradespeople

This deduction will apply for certain travel and relocation expenses for construction industry workers. This deduction will be similar to the one that was already in place, in order to qualify for this deduction your relocation must be over 150kms from your home based, and it must last for at least 36 hours. The deduction cannot exceed 50% of your employment income from construction, and will have a capped amount of $4,000, this deduction will apply to the 2022 tax year forward. 

– Home buyer’s credit increase

The home buyer’s credit amount had increased from $5,000 to $10,000 at 15% for a credit refund that has increased from $750 to $1,500.

 Home accessibility tax credit increase

The home accessibility tax credit has also increased, and the annual expense limit has increased from $10,000 to $20,000 at a 15% tax rate.

– Additions to medical expense tax credit

The medical expense tax credit allows couples trying to conceive a child with the help from a sperm donor or surrogate. This tax credit allows the taxpayer to be reimbursed for expenses related to the surrogate mother or sperm donor.

– Immediate expensing of capital property

Unincorporated businesses (self-employed individuals) that acquired capital property in 2022 may be eligible to claim a 100% deduction on most classes of capital property.

– Air quality improvement tax credit

If you were self-employed or a member of a partnership in 2022, you may be eligible to claim a refundable tax credit equals to 25% of your total ventilation expenses to improve ventilation or air quality at your place of business.

 COVID-19 benefit repayments

Form “T1B Request to Deduct Federal COVID-19 Benefits Repayment in a Prior Year” allows taxpayers who repaid benefit amounts before January 1, 2023 to choose when and how to claim the deduction on their tax return.  You have the option to claim the deduction in the year you made the repayment or in the year you received the benefits.

Changes to 2023

– Introduction of the Tax-free home saving account (FHSA)

The introduction of the tax-free home savings account (FHSA). This new account will help Canadians to save for a down payment for their first home. Individuals will be able to save up to $40,000 using this fund, it will be tax deductible and will be available at the start of 2023. The beginning contribution limit will be $8,000 for the first year. Contribution limits do not carry forward like they do for TFSA or RRSP. 

– Residential property flipping

The residential property flipping rule will take place this year. This rule will implement the full taxation on profits from flipping residential real estate. This rule applies to residential properties that are owned for 12 months or less and it will not be eligible for capital gains treatment. The exceptions for this rule include, the death of the taxpayer or related person, household additions including the addition of a new family member or the care of a new dependent, the separation from a spouse, personal safety concerns, disability or illness and the change of employment. This new rule will apply to residential properties sold after December 31, 2022.

– Multigenerational Home Renovation Tax Credit

Effective January 1, 2023, a 15% tax credit is available for expenses up to $50,000 for expenses related to building a secondary suite for a family member who is a senior or an adult with a disability.

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