John J. SzaszkiewiczProfessional Corporation
Chartered Professional Accountant
Newsletters
Tax Alerts
February 26, 2021

Sometime during the month of February, millions of Canadians will receive mail from the Canada Revenue Agency (CRA). That mail, a “Tax Instalment Reminder”, will set out the amount of instalment payments of income tax to be paid by the recipient taxpayer by March 15 and June 15 of this year.


One of the biggest pandemic-related changes in the day-to-day lives of Canadians was the abrupt change to work-from-home arrangements. While such arrangements aren’t new — employees and the self-employed have been working from home for decades, ever since the available technology made such arrangements feasible — what changed in 2020 was the sheer number of Canadians who were working from home for the first time.


Under Canadian tax law, the general rule is that all amounts paid by an employer to his or her employees are treated as taxable income. That rule holds whether those amounts are paid as cash remuneration, or in the form of non-cash benefits. However, in some circumstances, that general rule is altered to permit employees to receive certain non-cash benefits on a tax-free, or tax-advantaged, basis.


For most taxpayers, the first few months of the year are a seemingly unending series of bills and payment deadlines. During January and February, many Canadians are still trying to pay off the bills from holiday spending. The first income tax instalment payment of 2021 is due on March 15 and the need to pay any tax balance for the 2020 tax year comes just 6 weeks after that, on April 30. Added to all of that, the deadline for making an RRSP contribution for 2020 falls on March 1, 2021.


Two quarterly newsletters have been added—one dealing with personal issues, and one dealing with corporate issues.


The Employment Insurance premium rate for 2021 is unchanged at 1.58%.


The Quebec Pension Plan contribution rate for 2021 is set at 5.9% of pensionable earnings for the year.


The Canada Pension Plan contribution rate for 2021 is set at 5.45% of pensionable earnings for the year.


Dollar amounts on which individual non-refundable federal tax credits for 2021 are based, and the actual tax credit claimable, will be as follows:


The indexing factor for federal tax credits and brackets for 2021 is 1.0%. The following federal tax rates and brackets will be in effect for individuals for the 2021 tax year.


Each new tax year brings with it a listing of tax payment and filing deadlines, as well as some changes with respect to tax planning strategies. Some of the more significant dates and changes for individual taxpayers for 2021 are listed below.


Planning for – or even thinking about – next year’s taxes when it’s not yet even mid-December may seem more than a little premature. However, most Canadians will start paying their taxes for 2021 with the first paycheque they receive in January, and it’s worth taking a bit of time to make sure that things start off – and stay – on the right foot.


During the month of December, it’s customary for employers to provide something “extra” for their employees, by way of a holiday gift, a year-end bonus or an employer-sponsored social event. And while the annual office holiday party definitely won’t be happening in 2020, employees may still be able to look forward to something additional in the way of compensation during the last month of the year.


While Canadians benefit from a publicly funded health care system, there are nonetheless a significant (and increasing) number of medical and para-medical expenses which are not covered by provincial health care plans. As well, an increasing number of Canadians – who may work on contract or who hold several part-time jobs - do not have private insurance coverage for such costs through their employer.


Canadian Emergency Response Benefit

In March of this year, in response to the pandemic, the federal government announced and rolled out a number of benefit programs to assist individuals who had experienced a pandemic-related interruption in earnings.


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