By Charles Lefebvre

New tax changes have taken effect

Jan 9, 2019 | 2:56 PM

MEDICINE HAT, AB — New tax changes have taken effect for 2019, impacting the amount of money you will be taking home on your paycheque.

Among the new changes in place is the amount contributed to your Canadian Pension Plan (CPP).

If you make between 3,500 and $57,400, your CPP contribution will be 5.1 per cent of your earnings, up from 4.9 per cent. Employers will also match the contribution.

“The federal government has made some enhancements to the Canada Pension Plan,” says Lisa Gittens, a senior tax professional with H&R Block. “They recognize now that, yes, we’re working harder, but not everybody is able to save on their own for retirement.”

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The enhancements will increase each year until 2023, when the contribution percentage increases to 5.95 per cent.

A deduction in the small business tax rate has also taken effect, with the rate now set at 9 per cent.

The year will also see the start of a new parental sharing benefit program.

The program, which gets underway in March 2019, will provide an additional five weeks of Employment Insurance parental benefits when parents (including adoptive and same-sex parents) agree to share parental benefits. Parents with children born or placed for adoption on or after March 17 are eligible.

The Working While on Claim rule will now also apply to maternity benefits. When a person returns to work, they would have to subtract 50 cents of each dollar they earn, which would be subtracted from their overall EI Benefit.

“For example, if you were earning $500 a week, your EI benefit would normally have paid you 55 per cent of that salary, so you’d be getting $275, now that you’re on EI or parental benefits,” said Gittens. “If you were to return back to work part time, your spouse is still taking the time off, but you yourself are returning to work, and you’re earning about $300 per week, you’re going to be able to keep more of that money.”

“Your benefit now goes from getting $275 a week while you were off at home, you’ve gone back to work, and potentially, you could now be earning about $425 a week, because you’re keeping your part time earnings, plus your EI.”

Gittens adds it’s important people stay informed and speak with a tax professional about any changes to their lives, and how new tax changes can impact them.

“Sit down and ask the questions,” she said. “This is what my year has been like. Do any of these changes affect my tax return? And asking questions is the best way to prepare yourself.”

The deadline to file your 2018 taxes is April 30, 2019.