How will the new federal budget affect individuals and businesses?
Impact
on individuals –
- Non-eligible dividends tax increase: the federal effective tax rate on non-eligible dividends will be 21.22% (from 19.58%)
- Lifetime capital gains exemption has increased to $800,000 (from $750,000) on dispositions of qualified property
- Creation of the First-Time Donor’s Super Credit – supplements existing charitable tax credit to give new donors an additional 25% tax credit, up to $1,000 of donations
- Safety deposit box fees will no longer be tax deductible
- The elimination of import tariffs on sporting goods and baby clothes will mean reduced prices on sporting equipment and baby clothes
Impact
of businesses –
- Hiring credit for small business is extended for an additional year. This tax credit allows businesses to receive a credit of upto $1,000 against a small company’s increases in its 2013 EI premiums
- Establishing a Canada Job Grant, a training fun, by 2014 which provides $5,000 for an individual’s training, requiring matching fund from provincial governments and the individual’s employer
- Manufactures will see tax relief of $1.4 billion over four years for buying new machinery and equipment
