Home Renovation Tax Credit (HRTC)
By now you have probably heard friends talking about the HRTC and have seen the advertisements promoting it. The HRTC is a 15% tax credit on the 2009 personal income tax return. The HRTC applies to eligible expenditures of more than $1,000, to a limit of $10,000, resulting in a maximum credit of $1,350 [($10,000 - $1,000) x 15%].Â
A lot has been written about who can claim the credit, what expenses are eligible, and what the eligible period for those expenses is. What rarely gets mentioned is the fact that the HRTC is non-refundable. This means that you will only receive the credit if you have taxes payable (before tax deducted at the source or tax instalments). In other words, if you don't have taxable income, you will not receive the credit. Therefore, if you were planning to claim the HRTC, it is important to contact your Collins Barrow advisor to review your remuneration plan before of the end of the year to ensure you will qualify.
To claim the credit, your Collins Barrow tax preparer will enter your claim on a new schedule on your 2009 personal tax return. You do not need to submit receipts with the return, but you must keep documentation of your expenditures to support your claim should the CRA ask for them.
Harmonized Sales Tax (HST)
On July 1, 2010, the HST will come to Ontario. The tax base and basic operational rules for the Ontario portion of the HST will be substantially the same as for the GST.Â
Although the HST will have a large effect on individuals and many businesses, it will have a minimal effect on farmers as they are currently exempt from PST on many purchases.
The biggest benefit coming from this change to farmers is they will now be able to claim an ITC refund on the 8% share of the HST that replaces PST. This means that where farmers used to pay non-refundable PST on a few purchases (motor vehicles, for example), they will now pay the HST at 13% (5% federal and 8% provincial) and receive the entire 13% back on the HST return. As a result, if you were thinking about buying a new truck in time for spring planting, you might want to hold off on that purchase until July 1 when you will be able to get a bigger refund of the taxes on that purchase.
Tax Savings - Don't Miss Out!
December 31, 2009 is fast approaching which means that time is running out to take advantage of many tax savings strategies for this year.  These include things such as income splitting with your spouse and children, declaring eligible dividends, prepaying cash expenses, planning your personal remuneration to take advantage of tax credits (like the home renovation tax credit mentioned above) and many more. Please do not hesitate to contact your local Collins Barrow before year-end to discuss these opportunities.
2008 AgriInvest
Starting in 2008, producers needed to make a deposit into their AgriInvest accounts to participate in the program. Notices were mailed to producers showing the amount of the deposit they could make. The notices were not sent all at the same time; therefore each producer had a different deadline date to make the deposit. The majority of producers should have already received their 2008 notice by now. If you have not yet received your notice, please contact Collins Barrow as soon as possible to ensure you do not miss out on any benefits.
After your deposit is made and processed, you can withdraw both payments at any time in 2008 - there are no limits. However, you will have to wait a few weeks after you make your deposit until you receive your withdrawal notice before you can do this. Government funds are taxable in the year withdrawn and must be taken before the producers' funds. Generally, you should consider withdrawing the full amount on deposit as AgriInvest will only pay around 0.25% in interest.
Since the program essentially has no cost aside from the time to prepare the specified forms, all producers should consider participating in AgriInvest unless they are 100% in supply managed commodities. Producers originally had to submit the form for fiscal 2008 year before September 30, 2009 to participate but late forms will be accepted until December 31, subject to a 5% penalty for each month late. Otherwise, you can consider applying to the program starting in 2009. It is not known at this point whether the rules of the program will change for 2009.
2009/2010 AgriStability
The rules for the AgriStability program will essentially be the same in 2009 as they were in 2008. The major AgriStability deadlines you should keep in mind are as follows:
- December 31, 2009: deadline for the AgriStability premium with penalty for 2009.
- April 30, 2010: deadline for the AgriStability premium for 2010.
- April 30, 2010: deadline to sign up for the 2010 AgriStability program for new applicants.
- June 15, 2010: deadline for the 2009 AgriStability T1163 form for individuals/partnerships.
- June 30, 2010: deadline for the 2009 AgriStability T1163 (Statement A) form for corporations.
- June 30, 2010: deadline to send completed 2009 program forms for AgriStability.
- December 31, 2010: deadline for the AgriStability premium with penalty for 2010.
If you feel that your operation may qualify for a payment before your year-end, you may want to apply for an AgriStability interim payment. This allows you to receive 50% of your total estimated payment before completing your final application. In order to qualify, you must have completed at least six months of activity and submit the interim application before your year-end is complete. Therefore, for example, if your year-end is December 31, 2009 - you must submit it before this date.
2009 interim AgriStability applications can be found at the following link from the AgriCorp website at:
http://www.agricorp.com/en.ca/uploaddocuments/d1503+2009InterimApp.pdf
For further information, please contact your local Collins Barrow advisor.