Personal income tax: What's new for 2023.

Individuals and families

Advanced Canada workers benefit

Advance payments of the Canada workers benefit (CWB) are now issued automatically under the ACWB to those who received the benefit in the previous tax year. As a result, Form RC201, Canada Workers Benefit Advance Payments Application, has been discontinued.

Starting in 2023, amounts from your RC210 slip are to be reported on Schedule 6, Canada Workers Benefit, in order to calculate the amount to enter on line 41500 of your return. If you are married or have a common-law partner, you can choose who will claim the basic amount for the CWB regardless of who received the RC210 slip for the basic amount.

Deduction for tools (tradespersons and apprentice mechanics)

Starting in 2023, the maximum employment deduction for tradesperson’s eligible tools has increased from $500 to $1,000.

As a result, the threshold for expenses eligible for the apprentice mechanics tools deduction has also changed. 

Federal, provincial and territorial COVID-19 benefit repayments

Federal, provincial and territorial COVID-19 benefit repayments made after December 31, 2022 can be claimed as a deduction on line 23200 of your 2023 return.

First home savings account (FHSA)

The FHSA is a new registered plan to help individuals save for their first home. Starting April 1, 2023, contributions to an FHSA are generally deductible and qualifying withdrawals made from an FHSA to purchase a qualifying home are tax-free. 

Multigenerational home renovation tax credit (MHRTC)

The MHRTC is a new refundable tax credit that allows an eligible individual to claim certain renovation costs to create a secondary unit within an eligible dwelling so that a qualifying individual can reside with their qualifying relation. If eligible, you can claim up to $50,000 in qualifying expenditures for each qualifying renovation completed, up to a maximum credit of $7,500 for each claim you are eligible to make. 

Property flipping

Starting January 1, 2023, any gain from the disposition of a housing unit (including a rental property) located in Canada, or a right to acquire a housing unit located in Canada, that you owned or held for less than 365 consecutive days before its disposition is deemed to be business income and not a capital gain, unless the property was already considered inventory or the disposition occurred due to, or in anticipation of certain life events. 

Return of fuel charge proceeds to farmers tax credit

The Return of fuel charge proceeds to farmers tax credit is now available to self-employed farmers and individuals who are members of a partnership operating a farming business with one or more permanent establishments in Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island or Saskatchewan. 

British Columbia renter's tax credit

This new credit is effective starting January 1, 2023.

You can claim this refundable income tax credit if you meet all of the following conditions:

• You rented and occupied a rental unit for at least six months in a calendar year in British Columbia

• You are 19 years of age or older, or married or in a common-law partnership, or a parent of a child

• You were a resident of British Columbia at the end of December 31 of the year for which you are claiming the credit

If you have a spouse or common-law partner, only one credit can be claimed per couple even if both rent their own homes.

You are not eligible for this credit if any of the following conditions apply:

• You were confined to a prison or a similar institution at the end of the year and you have been confined for more than six months in total for the year that you are claiming the credit

• You were an employee of a foreign country or a family member or a servant of the employee of a foreign country

The following amounts are not considered as rent for the purpose of the credit:

• A rent that was paid to someone related to you

• A rent paid for a campsite, moorage or manufactured home site

• A rent on accommodations your employer paid for, unless the amount was included in your income for the year

• A rent paid under a rent-to-own plan

Do not claim this credit on a return for a person who died in the year for which the credit is claimed.

You can claim the credit of $400 a year if your adjusted family net income is below $60,000. If your income is more than $60,000 and less than $80,000 you may receive a reduced amount. The tax credit is reduced by 2% of the amount by which your adjusted family net income exceeds $60,000. The credit is reduced to zero if your income is $80,000 or more.

The adjusted family income threshold amount of $60,000 will be indexed each year for inflation.

Bankruptcies in 2023 

The British Columbia renter's tax credit cannot be claimed on your pre-bankruptcy or in-bankruptcy return.

You must be an eligible renter for at least six months in 2023.  

Keep your supporting documents in case you are asked to provide them later.

Please contact us for further assistance with these matters.