Changes to Federal Personal Exemptions for 2020
On December 9, 2019, the Government of Canada tabled a Notice of Ways and Means Motion that proposes to amend the Income Tax Act to increase the Basic Personal Amount to $15,000 by 2023. The increase would be phased in starting in 2020. As a result, the Canada Revenue Agency (CRA) has recently released updated versions of the following:
- 2020 TD1 Personal (Federal) Tax Credits Returns
- Payroll Deduction Online Calculator (PDOC)
- Basic Personal Amount Q&A document.
What is the Basic Personal Amount?
- The Basic Personal Amount (BPA) is a non-refundable tax credit that can be claimed by all individuals. The purpose of the BPA is to provide a full reduction from federal income tax to all individuals with taxable income below the BPA. It also provides a partial reduction to taxpayers with taxable income above the BPA.
- A non-refundable tax credit reduces what you may owe. However, if your total non-refundable tax credits are more than what you owe, you will not get a refund for the difference.
Who is impacted by the Notice of Ways and Means Motion and what action should I take as a MacEwan University employee?
All employees who earn an income over $150,000 are encouraged to complete the 2020 Personal (Federal)Tax Credits Return (TD1). By doing so, your income tax will be calculated accurately as a result of this new legislative change. Please return the form(s) to Payroll Services at 10-600 (University Service Centre) or send a scanned copy by email to firstname.lastname@example.org.
If you have any questions, please contact Payroll Services at 780-497-4222.