New for 2016

RénoVert tax credit

You could be entitled to the new refundable RénoVert tax credit if you or your spouse paid, after March 17, 2016, but before October 1, 2017, eligible expenses for eco-friendly renovation work on your principal place of residence or cottage, provided that such expenses were paid under a contract entered into with a qualified contractor after March 17, 2016, and before April 1, 2017.

The tax credit is equal to 20% of the portion of your eligible expenses that exceeds $2,500, up to a maximum cumulative tax credit for 2016 and 2017 of $10,000 per eligible dwelling.

See point 32 in the instructions for line 462 in the guide to the income tax return (TP-1.G-V).

Tax shield

If your work income increased in 2016, you could be entitled to a new refundable tax credit called the tax shield. The purpose of the tax shield is to offset, further to an increase in work income, a part of the loss of the tax credit respecting the work premium (either the work premium or the adapted work premium) and the tax credit for childcare expenses.

See the instructions for line 460 in the guide to the income tax return (TP-1.G-V).

Tax credits respecting the work premium

The rate used to calculate the maximum amount that may be granted as a work premium for a person living alone or for a couple without children has been raised from 7% to 9% for the work premium and from 9% to 11% for the adapted work premium.

See the instructions for line 456 in the guide to the income tax return (TP-1.G-V).

Tax credit for children's activities

The maximum eligible registration or membership fees have been increased from $300 to $400 per child, for a maximum tax credit of $80 per child. The maximum tax credit for a child who has a severe and prolonged impairment in mental or physical functions has been increased from $120 to $160.

See point 25 in the instructions for line 462 in the guide to the income tax return (TP-1.G-V).

Expenses for medical services not available in your area

The minimum distance for medical services to be considered not available in your area has been decreased from 250 kilometers to 200 kilometers as regards travel, lodging or moving expenses paid after June 30, 2016.

See the instructions for line 378 in the guide to the income tax return (TP-1.G-V).

Deduction for residents of designated remote areas

The basic and additional housing deductions have been increasedfrom $8.25 to $11 per day, respectively.

See the instructions for line 236 in the guide to the income tax return (TP-1.G-V).

Income averaging for forest producers

If, under the Sustainable Forest Development Act, you are a certified forest producer (or a member of a partnership that is a certified forest producer) regarding a private forest, you can average, over a period not exceeding seven years, a portion of the income generated by the non-retail sale of timber produced in the private forest.

See point 21 in the instructions for line 297 in the guide to the income tax return (TP-1.G-V).

Age amount

For 2016, the eligibility age has been raised from 65 to 66.

Tax credit for workers 64 or older

The eligibility age for the tax credit for workers has been lowered from 65 to 64. In addition, the maximum eligible work income has been increased from $4,000 to $6,000 for workers 65 or older. The maximum tax credit, calculated on the basis of age and eligible work income, is therefore $902.40. Note that the tax credit can be reduced based on eligible work income over $33,505.

See the instructions for line 391 in the guide to the income tax return (TP-1.G-V).

Tax credit for home-support services for seniors

The tax credit rate has been raised from 33% to 34% of your eligible expenses.

Tax credit for caregivers

The tax credit a person taking care of his or her spouse can claim has been increased from $925 to $1,000.

Tax credits for donations and gifts

Charitable donations and gifts

As of 2016, the total eligible amount of charitable donations and gifts you can use to claim the tax credit is no longer limited to 75% of your net income.

Donations of food products

If you donated eligible food products to a member of the Food Banks of Quebec network after March 17, 2016, the eligible amount of the donation can be increased by 50% for the purpose of calculating the tax credit.

See the instructions for line 395 in the guide to the income tax return (TP-1.G-V).

Dividends from taxable Canadian corporations

Gross-up percentage

Effective January 1, 2016, the gross-up percentage applicable to ordinary dividends has been lowered from 18% to 17%. See the instructions for line 128 in the guide to the income tax return (TP-1.G-V).

Tax credit rate

Effective January 1, 2016, the tax credit rate applicable to the actual amount of ordinary dividends has been lowered from 8.319% to 8.2485%. See the instructions for line 415 in the guide to the income tax return (TP-1.G-V).

Tax credit for the acquisition of Capital régional et coopératif Desjardins shares

The tax credit rate has been lowered from 45% to 40% for shares acquired after February 29, 2016.

Health contribution

The health contribution is calculated on your income and can reach up to $1,000 per person. If you are in a couple, both you and your spouse must pay it.

You do not have to pay the health contribution if you are in any of the following situations:

  • The amount on line 275 of your return is $18,570 or less.
  • You had a spouse on December 31, 2016, and the amount on line 275 of your return plus the amount on line 275 of your spouse's return totals $23,880 or less.
  • You were born before January 1, 1951, and all your medications were free throughout 2016 because you received 94% or more of the Guaranteed Income Supplement (calculated without the top-up benefit).

Reduction

Effective July 1, 2016, the health contribution that you may be required to pay has been reduced. 

See Work Chart 448.

Québec prescription drug insurance plan

On July 1, 2016, the contribution rates for the Québec prescription drug insurance plan were increased. Consequently, the maximum premium has been increased from $640 to $660. However, the maximum premium payable for the entire 2016 taxation year is $650.

You do not have to pay a premium if you are in any of the following situations:

  • You did not have a spouse on December 31, 2016, and the amount on line 275 of your return is $15,570 or less.
  • You had a spouse on December 31, 2016, and the amount on line 275 of your return plus the amount on line 275 of your spouse's return totals $25,230 or less.
  • You were born before January 1, 1951, and all your medications were free throughout 2016 because you received 94% or more of the Guaranteed Income Supplement (calculated without the top-up benefit).

Full indexation of the tax system

A number of other amounts have been increased, including the following:

  • the deduction for workers (line 201)
  • the basic personal amount (line 350)
  • the income threshold at which certain tax credits are reduced
  • the amount for a person living alone (line 20 of Schedule B)
  • the age amount (line 22 of Schedule B)
  • the basic exemption for calculating the contribution to the health services fund (Schedule F)
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