Davidow & Nelson Blog

Eligibility Verification: CERB/CRB

Over the last year, CRA has increased verification activity in respect of eligibility for the Canada Emergency Response Benefit (CERB) and the Canada Recovery Benefit (CRB). As a result, a number of disputes have hit the judicial system. One of the focus areas has been the prior earnings test. To be eligible for either CERB… Read more »

CRA Project: Principal Residence Exemption

In early 2022, CRA began to send out education letters in respect of individuals claiming the principal residence exemption (PRE) in the British Columbia region. Often, regional projects such as this are used as pilots for subsequent national projects. As CRA has indicated that they have a larger overall focus on real estate transactions, similar… Read more »

Budget 2022 Proposals: Buying and Selling a Home

The 2022 Federal Budget included several proposals that would significantly change the taxation environment when buying and selling a home. Broadly, the government proposed various incentives for first-time buyers and extended family units in addition to bright-line tests/restrictions for those purchasing homes for profit (e.g. home flippers). Taxpayers should consider how the changes will affect… Read more »

Tax Tidbits

Some quick points to consider… – The luxury tax affecting new vehicles and aircraft retailing for more than $100,000 and new boats over $250,000 has been rescheduled to commence on September 1, 2022. – The Office of the Auditor General of Canada noted that $3.7 billion of overpaid COVID-19 benefits had been identified. – The… Read more »

Clawback Planning: Old Age Security (OAS)

Individuals who normally receive OAS are occasionally surprised when some OAS is subject to a special tax (commonly referred to as a “clawback”) with their T1 tax filings due to high earnings. In particular, OAS is clawed back at a rate of 15% of adjusted income (AI) received in that year over an indexed threshold… Read more »

Modified Support for Individuals: Canada Worker Lockdown Benefit (CWLB)

The CWLB provides a $300 per week benefit to employees and self-employed persons unable to work due to a public health restriction lasting at least seven consecutive days. It will apply only to regions designated by the federal government as eligible in the period. This would be in regions where provincial or territorial governments have… Read more »

Expanded Access to Tax Credit: Teachers and Early Childhood Educators

The eligible educator school supply tax credit is a refundable tax credit that allows teachers and early childhood educators to claim up to $1,000 for amounts expended (for which no allowance or reimbursement was provided) for supplies and some durable goods used to teach or facilitate students’ learning. Individuals must have a certificate from their… Read more »

CRA Increasing Reviews: Corporate Advertising and Promotion Expenses

Over the past few years, CRA has taken a targeted approach in reviewing amounts claimed under specific lines (based on the type of claim) of a corporate tax return. Various projects conducted included reviews of professional fees, travel expenses and the purchase of certain vehicles. CRA has recently focused their efforts on advertising and promotion… Read more »

The Penalties Can be Large: Falsified Employment Records

With numerous COVID-19 benefits being based on employment and remuneration levels, the federal government has likely become increasingly concerned with falsified employment records. However, this is not a new issue. In particular, the government already has experience dealing with false records used to increase access to employment insurance (EI) benefits. Employers can face penalties of… Read more »

Targeted Measures: COVID-19 Business Supports

In the Fall of 2021, the government revised several business supports provided due to the COVID-19 pandemic. The changes include extending the Canada Recovery Hiring Program (CRHP) to May 7, 2022 and increasing the subsidy rate to 50%. The wage and rent subsidies under the previous Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency… Read more »