It’s that time of year again when Albertans roll up their sleeves, dig out receipts and financial documents from the past year and fill out their income tax forms.
For those who end up with a rebate, the process can be rewarding but whether you end up owing the government or the government owes you, tax time can be tricky for many, so Global News has come up with some tips to make the task a little less taxing.
What’s new for 2016
While filing your taxes is an annual tradition, the government makes it an annual tradition to also tweak its tax policy. Here are a few things the Alberta government has done for 2016:
· Increased Alberta non-refundable tax credits to offset inflation
· Lower-income families with children under 18 years of age qualify to receive the Alberta child benefit as of July 2016 (more on that below)
· Individual income tax rates have changed for taxable income over $125,000, $150,000, $200,000, and $300,000 (see the new rates below)
· The Alberta overseas employment tax credit has been eliminated
· The rate used to calculate the dividend tax credit for non-eligible dividends has changed
Of course the most talked about tax in Alberta this year is the government’s new carbon levy which took effect in January. While many Albertans will qualify for rebates if they file a tax return and meet the income criteria, there is no application process required.
Watch below: On Jan. 5, 2017, Fletcher Kent filed this report about the Alberta government starting to issue carbon rebate cheques to some Albertans. The province says two thirds of Albertans qualify for some money but there’s criticism over how the province is rolling out its plan.
What percentage of my income is going to provincial income taxes?
· 10 per cent for first $125,000 of taxable income
· 12 per cent on next $25,000, from $125,000 to $150,000
· 13 per cent on next $50,000, from $150,000 to $200,000
· 14 per cent on next $100,000, from $200,000 to $300,000
· 15 per cent on taxable income above $300,000
What are some tax credits I can apply for or am already eligible for?
Adopting a child can be expensive but in Alberta you can apply for up to $12,619 in tax credits for each child you adopt. The credits are aimed at helping to cover fees paid to a federally- or provincially-licensed adoption agency, legal and administrative costs, “reasonable and necessary” travel and living expenses for both the child and the adoptive parents, document translation fees, fees paid to a foreign institution, expenses paid for the child’s immigration and more.
Two adoptive parents can split the adoption expenses claim as long as “the combined total claim for each child is not more than the eligible amount before the split.”
Note that credits for adoption expenses are only available to residents of Alberta. If you are not a resident of Alberta, you cannot claim this non-refundable tax credit in calculating your Alberta tax even though you may have received income from a source inside Alberta in 2016.
If you were 65 years of age or older on Dec 31 and your net income was less than $72,549 you can claim the age amount. The calculated credit is different if you earned $38,275 or less. Also, you could be able to transfer all or part of your age amount to a spouse or common-law partner or vice versa.
Medical expenses for other dependants
Many people already know you can claim medical expenses for yourself, a spouse or common-law partner or your dependent children who aren’t yet adults. But that’s not all. Medical expenses for other dependants (such as your or your spouse’s or common-law partner’s children born in 1998 or earlier, grandchildren, parents, grandparents, brothers, sisters, aunts, uncles, nieces, or nephews who were residents of Canada at any time in the year) can also be claimed on your provincial income taxes the same as your federal taxes as long as they cover the same 12-month period ending in 2016 and no one claimed them on a 2015 return.
According to the Canada Revenue Agency, the total expenses for each dependant have to be more than either three per cent of that dependant’s net income or $2,384, whichever is less.
Alberta Child Benefit (ACB)
Most parents are well aware of the Canada Child Tax Benefit (CCTB) but in Alberta, the ACB is also a credit aimed at providing lower-income parents with financial relief to give their kids a better quality of life for their children.
Parents with children under 18 are eligible for the benefit if they have a family net income less than $41,220 per year. Eligibility for receiving the benefit also requires being a resident of Alberta for at least one month before receiving the credit and having filed a tax return.
The good news? There’s no need to apply if you are already enrolled in the CCTB as the Alberta government will automatically consider you. If you aren’t enrolled in the CCTB , click here for more information.
According to the government, the AFETC “provides more financial benefits to working families in Alberta while encouraging self-reliance and stability.”
To be eligible for this credit, you need to be a parent of at least one child under the age of 18 and have a family working income of over $2,760. Also, you’ll need to have a net family income (a net family income is defined as your total family income after you subtract registered pension plan and RRSP contributions, annual union dues, child care expenses, moving and other expenses) of less than:
· $60,325 for families with 1 child
· $77,675 for families with 2 children
· $88,075 for families with 3 children
· $91,550 for families with 4 or more children
You also need to have been a resident of Alberta for at least a month before receiving the credit and must have filed a tax return to be eligible.
For a comprehensive list of tax credits and exemptions available to Alberta residents, click here.
The deadline for filing your taxes is April 30 if you have a balance owing and June 15 if you or your spouse or common-law partner ran a business in 2016. But you still have to pay by April 30 if you owe money to the government.