Canadian Payroll Reporter - sample

4 Canadian HR Reporter, a Thomson Reuters business 2017 News June 2017 | CPR PM #40065782 News in Brief A look at news, facts and figures shaping the world of payroll professionals No payroll-related tax rate changes in Ontario budget › TORONTO — This year's Ontario budget did not contain any proposed changes to payroll-re- lated tax rates, but there were some measures that may affect payroll professionals. The budget, which Finance Minister Charles Sousa presented on April 27, proposed to replace the infirm dependent credit and caregiver credit claimed on an Ontario Personal Tax Credits Return (TD1ON) with a new Ontario caregiver tax credit. The change would be similar to a proposal put forward in this year's federal budget to replace the infirm dependent credit, caregiver credit and family caregiver tax credit claimed on a federal Personal Tax Credits Return with a new Canada caregiver credit. Like the federal change, the Ontario proposal would apply as of the 2017 tax year. For 2017, the new Ontario non-refundable tax credit would allow individuals to claim a maximum of $4,794 for infirm dependents, such as adult children of the claimant or of the claimant's spouse or common-law partner. The credit would begin to be phased out at the dependent's net income above $16,401 (for 2017). The budget also proposed to eliminate an exemption for the Employer Health Tax (EHT) for employers who are designated members of a partnership, as defined in the federal Income Tax Act. Under EHT law, eligible employers are exempt from paying the tax on the first $450,000 of their annual Ontario payroll. Private-sector employers whose annual Ontario payroll is more than $5 million do not qualify for the exemption. Budget documents stated that the purpose of the proposal was to stop employers from structuring their businesses in ways that enable them to avoid paying the EHT. While the budget did not specify when the proposal would take effect, it did note that it would not occur before next January in order to provide time for feedback and consultation. The budget also stated that the government plans to review other methods and structures that some employers use to avoid paying the EHT. Additionally, the budget included the following items of interest for payroll: • The final report of a review of the province's Employment Standards Act, 2000 and Labour Relations Act, 1995 is expected to be released this spring. • The government plans to carry out a policy, leg- islative and administrative review of all taxes to find and eliminate loopholes, strengthen administration and enhance partnerships with other government bodies, including the Cana- da Revenue Agency. • Beginning next January, the government pro- poses to cover the cost of all prescription drugs funded through the Ontario Drug Benefit Pro- gram for children and youth under 25 years of age. No deductible or co-payment would be required. • This spring, the government plans to announce guiding principles for a new framework to regu- late defined benefit pension plans. Draft regu- lations would be released in the fall. The gov- ernment also plans to expand and modernize legislation and regulations governing defined contribution pension plans. • The government plans to announce a pro- posed framework for target benefit multi-em- ployer pension plans this spring and release draft regulations for public consultation in the fall. For more information on the proposals, refer to the Ministry of Finance's website at www.fin. gov.on.ca/en/budget/ontariobudgets/2017/ index.html. N.S. budget proposes to raise TD1NS amounts › HALIFAX — The 2017-2018 Nova Scotia bud- get did not include any payroll-related tax rate changes, however it did contain proposals that would affect the provincial TD1 form. The budget, which Finance and Treasury Board Minister Randy Delorey presented on April 27, included an announcement that the government would increase the basic personal amount, the spousal and common-law partner amount and the amount for an eligible dependant that employees claim on a Nova Scotia Personal Tax Credits Return (TD1NS), beginning next January. If implemented, the maximum tax credit amounts would rise from $8,481 to $11,481. The budget also proposed an increase to the age amount claimed on the form from $4,141 to $5,606. Shortly after the budget was tabled, Premier Stephen McNeil called a provincial election for May 30. TD1PE amounts going up › CHARLOTTETOWN — Some of the amounts that employees claim on a Prince Edward Is- land Personal Tax Credits Return (TD1PE) are going up. In this year's budget, which Finance Minister Allen Roach tabled on April 7, the government proposed to raise the basic personal amount and the spouse and equivalent-to-spouse amounts by two per cent for the 2017 tax year. The basic personal amount would rise from $8,000 to $8,160, while the spouse and equivalent-to-spouse amounts would go from $6,795 to $6,931. The budget did not propose any changes to personal income tax rates or taxable income brackets. Yukon sets up panel to help shape future budgets › WHITEHORSE — The Yukon government has set up a financial advisory panel to recommend ways to strengthen the territory's economy and provide advice on future territorial budgets. Premier Sandy Silver announced the creation of the panel when he presented the territory's 2017-2018 budget on April 27. It includes a representative from the Kluane First Nation, a chartered professional accountant, an economist and economics professors. The panel will consult with residents, businesses, and other stakeholders between June and September before presenting its recommendations to the government in October. Silver did not announce any payroll-related tax rate changes in the budget; however, one budget proposal would affect the way the government determines the territory's top personal income tax rate, set at 15 per cent. Under Yukon's Income Tax Act, the highest personal income tax rate is the same as the territory's general corporate income tax rate. Silver announced that the government planned to lower the general corporate tax rate from 15 per cent to 12 per cent on July 1. To ensure that the change would not affect personal income tax rates, the government recently tabled legislation that would set the top personal income tax rate at 15 per cent, with no links to corporate income tax. The amendment would apply retroactively to January 1. Feds still addressing Phoenix issues › OTTAWA — The federal government says it will reimburse public-sector workers affected by problems with its Phoenix pay system up to $200 for the cost of tax advice they obtain to complete their income tax returns. Scott Brison, president of the Treasury Board, recently announced that government employees may claim the funds for tax services they obtained or will obtain for their 2016 or 2017 income taxes if they were underpaid or overpaid because of Phoenix. The government has been struggling with its new payroll system since it began rolling it out over a year ago. Thousands of workers have been overpaid, underpaid, or not paid at all, alongside difficulties with processing requests on time. In a continuing effort to resolve Phoenix problems, the government recently announced that it would forego about $70 million in savings over the next two fiscal years. The savings were expected across departments as a result of modernizing the pay system using Phoenix and consolidating government pay centres in one location in Miramichi, N.B. Instead, the money will remain within the departments to ensure that they have the resources to deal with payroll issues.

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