Growing plants in coin bag

2019 Tax Rates

2019 Tax Tips and Reminders

2019 TFSA limit is $6,000

The Tax-Free Savings Account (TFSA) limit was $5,500 for 2018, 2017 and 2016, $10,000 for 2015, $5,500 for 2014 and 2013. For 2009 to 2012, the limit was $5,000. The total room available in 2019 for someone who has never contributed and has been eligible for the TFSA since its introduction in 2009 is $63,500.

Contributions can be made by Canadian residents aged 18 or over. Any unused contribution room can be carried forward. There is no lifetime limit to the amount of the contributions. If a person has contribution room, but no funds to contribute, he or she may contribute funds given to them by their spouse or common-law partner, with no attribution of income to the spouse or common-law partner. Note that a withdrawal in any year does not increase the TFSA room until the following calendar year. If you are thinking of making a withdrawal close to year end, make sure it is done by December 31 so you can have the withdrawal amount added back to the TFSA room sooner.

2019 RRSP Limit

The RRSP contribution limit is $26,500 in 2019 ($26,230 in 2018). The limit will increase to $27,230 in 2020. If you or your employer do not contribute to a pension plan, your 2019 “earned income” for RRSP purposes must be at least $151,278 to create RRSP contribution room of $27,230 in 2020. Please see the news release.

2019 Employment Insurance Rates

Employment Insurance (EI) rates for 2019 have changed to 1.62% (vs 1.66% for 2018) of earnings for employees. The maximum annual premium increases to $860.22 (from $858.22 in 2018). The rate for employers is 1.4 times the employee rate or 2.268%. The maximum insurable earnings for 2019 increases to $53,100 from $51,700 in 2018.

2019 Canada Pension Plan Rates

The maximum pensionable earnings under the Canada Pension Plan (CPP) for 2019 will be $57,400 – up from $55,900 in 2018. Contributors who earn more than $57,400 in 2019 are not required or permitted to make additional contributions to the CPP.

The basic exemption amount for 2019 remains at $3,500. Individuals who earn less than that amount do not need to contribute to the CPP.

The employee and employer contribution rates for 2019 have increased to 5.10% from 4.95% in 2018, and the self-employed contribution rate will increase to 10.2%.

The maximum employer and employee contribution to the plan for 2019 will be $2,748.90 and the maximum self-employed contribution will be $5,497.80. The maximums in 2018 were $2,593.80 and $5,187.60.

Canada Pension Plan Changes for Persons Between Ages 60 and 70

Beginning in 2012, employers must withhold and remit CPP on wages paid to employees between ages 60 and 70, even if the employee is collecting CPP benefits. If the employee is between 65 and 70, he or she may file an election to opt out of paying CPP. These rules also apply to self-employed individuals. In order to avoid paying CPP, the election must be filed with CRA to take effect on the first of the following month. There are several other changes related to CPP benefits. Please contact us for information.

Employer Health Tax

Effective January 1, 2019, the EHT exemption has increased from $450,000 to $490,000. More information on Employer Health Tax: https://www.fin.gov.on.ca/en/tax/eht/index.html

Accelerated Capital Cost Allowance (CCA)

Accelerated CCA is available on additions from November 21, 2018 to December 31, 2027. Prior to the rule change, the “half-year rule” allowed half a year of capital cost allowance in the year of acquisition.  Now, for most assets, the usual half year of CCA available in the year of acquisition will be tripled for acquisitions to December 31, 2023.  For example, a Class 10 vehicle which is normally subject to a 15% CCA claim in the first year would now be allowed a 45% CCA claim.  For acquisitions in calendar years 2024 to 2027, the usual half year of CCA will effectively be doubled rather than tripled. After the acquisition year, CCA will return to the normal rate on the remaining pool in the CCA class.

Tuition and Textbook Credits

For 2018 federal tax purposes, the tuition credit is available; however, the textbook credit is no longer available.  For 2018 Ontario tax purposes, the tuition and textbook credits are no longer available.

Climate Action Incentive Payment

The climate action incentive (CAI) is a refundable credit which consists of a basic amount and a supplement for residents of small and rural communities. The basic amount is $154 and the spouse or common-law partner amount is $77 and $38 for each qualified dependant. More information on Climate Action Incentives:

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-449-climate-action-incentive.html

Capital Gains Exemption

The lifetime capital gains exemption for capital gains on qualified small business corporation shares has increased to $866,912 in 2019 from $848,252 in 2018.  The lifetime capital gains exemption for capital gains on qualified farm property is $1,000,000 for 2019 and 2018.

Prescribed Interest Rates

The prescribed rates for the first quarter of 2019 is as follows:

  • The interest rate paid on overpayments is 6%.
  • The interest rate used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans is 2%.
  • The interest rate charged on overdue taxes, Canada Pension Plan contributions, and Employment Insurance premiums is 6%.

For more information please see CRA’s website on prescribed interest rates.

2019 Combined Federal and Ontario Tax Brackets for Individuals

Taxable Income Regular Income% Ineligible (Private Corporation) Dividends % Eligible Canadian Dividends % Capital Gains %
$0 to $43,906 20.05 8.89 0.00 10.03
$43,907 to $47,630 24.15 13.61 0.00 12.08
$47,631 to $77,313 29.65 19.93 6.39 14.83
$77,314 to $87,813 31.89 22.04 8.92 15.74
$ 87,814 to $91,101 33.89 24.81 12.24 16.95
$91,102 to $95,259 37.91 29.43 17.79 18.95
$95,260 to $147,667 43.41 35.76 25.38 21.70
$147,668 to $150,000 46.41 39.21 29.52 23.20
$150,001 to $210,371 47.97 41.00 31.67 23.98
$210,372 to $220,000 51.97 45.60 37.19 25.98
$220,001 and up 53.53  47.40 39.34 26.76

(This table does not include the Ontario Health Premium)

2019 Federal and Ontario Combined Corporate Income Tax Rates

Canadian Controlled Private Corporations Other Corporations
Small Business Income(up to $500,000) Investment Income** General Manufacturing and Processing General Active Business Income
12.50% 50.17%* 25.00% 26.50%
*30.667% of investment income is eligible for refund at a rate of $1 for every $2.61 of dividends paid.
**Canadian taxable dividend income (not from a connected corporation) is taxed federally only under Part IV at a rate of 38.33%. This tax is eligible for refund at a rate of $1 for every $2.61 of dividends paid.

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