Changes for individuals tax return 2023

Ending staycation tax credit

Despite calls from tourist organizations and opposition critics to make it permanent, the benefit for payments to Ontario hotels and temporally stay facilities has not been renewed for 2023.

Flat rate to calculate deductions of working from home

The temporary flat rate method for claiming employees’ home office expenses only applied for 2020 to 2022 and is no longer available. For 2023 and future years, employees need to follow the detailed method to make these claims.

CPP contributions and maximum pensionable earnings:

The maximum annual pensionable earnings amount was increased to $66,600. The employee/employer contribution rate was increased to 5.95%, and the maximum contribution for 2023 is $3,754.45.

Contributions to Registered and other plans

Limits and amounts are increased for 2023 for registered plans such as registered pension plans, registered retirement savings plans, deferred profit-sharing plans plus advanced life deferred annuities. The tax-free savings account (TFSA) limit has been increased to $6,500 for 2023, bringing the cumulative contribution limit to $88,000 for individuals that were eligible to make a TFSA contribution in 2009.

Advance Canada workers benefit payments

Taxpayers no longer must apply for advance payments of the Canada Workers Benefit (CWB) when they file their tax returns. These payments are now issued automatically to those who were entitled to receive the benefit in the previous tax year. Form RC201, Canada Workers Benefit Advance Payments Application, is discontinued. 

Tax-free first home savings accounts

Rules to enable this new type of account have taken effect on April 1, 2023. See our article for details.

Residential property flips

Starting on January 1, 2023, profits from flipping residential real estate are always fully taxed, no capital gain rules. Additionally, profits from dispositions of residential property (including rental property) that was owned for less than 12 months would be deemed to be business income, subject to exemptions for death, breakdown of a marriage or common-law partnership, eligible relocations, and other life events.

Multigenerational Home renovation tax credit

This new refundable tax credit is available for 15% of $50,000 of the costs of a qualifying renovation to an eligible dwelling that is completed to allow a qualifying individual to live with a qualifying relation. You can claim the credit (see T1, Schedule 12) for qualifying expenditures made or incurred after December 31, 2022, for services performed or goods acquired after that date. 

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