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Tax Changes - Quebec
From tax expert Gerry Vittoratos
March 29, 2019
Senior assistance tax credit
A new refundable tax credit has been added for seniors aged 70 or over. The amount that can be claimed depends on the family situation:
- $200 for single individuals
- $200 for a couple where only one spouse is 70 years old or over
- $400 for a couple where both spouses are 70 years old or over
These amounts are subject to a 5% reduction when:
- the family income is above $22,600 for single individuals;
- the family income is above $36,600 for a couple.
Dividends from Canadian corporations – multiple rates
For 2018, Quebec will have 2 distinct tax credit rates for ordinary dividends depending on when they were received:
- 8.178% for the period from January 1st to March 27, 2018; and
- 7.2848% for the period from March 28 to December 31, 2018.
The gross-up rate for ordinary dividends has decreased from 17% to 16%.
For eligible dividends, the tax credit rate goes from 16.422% to 16.3668% for the period from March 28 to December 31, 2018.
Tax credit for caregivers supporting an eligible relative
A new refundable tax credit can be claimed for services provided to an eligible relative. This credit is available to individuals who supported and regularly and continuously assisted the eligible relative in carrying out a basic activity of daily life, for free.
Eligible relatives include parents, grandparents, children, grandchildren, siblings, nieces and nephews, aunts and uncles, great-aunts and great-uncles. The eligible relative has to have a severe and prolonged impairment, and not be living in a seniors’ residence.
The maximum amount that can be claimed is $533, and it is reduced progressively by 16% once the income of the eligible relative exceeds $23,700.
Home buyers’ tax credit
In line with the corresponding federal tax credit, a new non-refundable tax credit of $750 has been added for the first-time purchase of a new home. The eligibility criteria are essentially the same as with the federal credit, which means that you will be considered to have made a “first-time” purchase if neither you nor your spouse have owned a home prior to this purchase in the current tax year (2018), nor in the previous four years.
In line with the corresponding federal change, self-employed individuals who have purchased capital assets for their business after November 20, 2018, can now triple the depreciation rate attributable to these assets in the first year of use, effectively tripling their depreciation expense.
For the specific capital assets listed below, Quebec will allow an immediate expensing (100% depreciation expense) if purchased after December 3, 2018:
- computer hardware;
- manufacturing and processing equipment;
- clean energy generation equipment;
- intellectual property.
You will also be able to take an additional 30% depreciation expense the year following the year of purchase.
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