There were few changes to personal income taxes in 2019. The tax rates on ordinary income remain the same for 2019 as they
were in 2018.
There were some small changes to the size of tax brackets in the year as a result of inflation.
There has also been an increase in the rate of tax on ineligible dividends, up to 44.64% in the highest tax bracket. There has also been a decrease in
the rate of tax paid on eligible dividends, down to 31.44% in the highest bracket.
You may have noticed that there have been significant increases to the tax rates that have been paid on dividends over the last ten years.
In 2009, the rate on ineligible dividends received in the highest tax bracket was only 32.71% in BC, and the rate on eligible dividends in that same
bracket was 19.92%.
These increases are the result of reductions in corporate tax rates.
In order to offset these reductions, governments have increased personal tax rates on corporate income that is distributed to shareholders as dividends. As a result, a similar
amount of total income tax is still paid.
In our previous newsletter, we discussed that the Canada Training Credit has been established. However, this credit will not be introduced until 2020, so you do not need
to bring in your receipts for eligible training until next year.
Similarly, the Digital NewsSubscription tax credit announced this year will not be available until 2020.
Although there had been some discussion during the federal election campaign that the government would reintroduce the Children’s Arts and Fitness tax credits, these were not reinstated.
With the expansion of the Guaranteed Income Supplement (GIS), the results of the tax return may be of particular interest to seniors.
In the past, only $3,500 of employment income could be exempted when calculating income for the purposes of the GIS. This exempt amount has been increased.
Exempt income has been expanded to also exclude senior’s self-employment income from the calculation, at similar thresholds as excluded employment income.