Revenu Québec: Important changes for the 2016 tax year

Each year, Revenu Québec makes changes to certain tax rules that are designed to benefit the residents of Québec as well as the provincial economy. Of course that sounds great, but what does it mean for you, the taxpayer? Let’s take a look at how the changes for 2016 can impact your tax situation this year:

RénoVert tax credit

If you or your spouse paid for eligible expenses for renovations made to your principle residence or to your cottage in order to make it more eco-friendly, you might be able to claim the new refundable RénoVert tax credit. To be eligible, the expenses must have been paid between March 1, 2016 and October 1, 2017 under a contract that you and a qualified contractor entered into between March 1, 2016 and April 1, 2017.

The RénoVert tax credit is equal to 20% of your eligible expenses over $2,500 up to a combined 2016 - 2017 maximum of $10,000 per eligible dwelling.

Tax shield

If your employment income increased in 2016, you might be able to claim the new refundable tax shield credit. This credit is designed to offset a part of the loss of your tax credit respecting the work premium (including the adapted work premium) and your tax credit for childcare expenses due to your higher income.

Tax credits respecting the work premium

In 2016, the rate used to calculate the maximum amount you can receive as a work premium if you live alone or as a couple without children has been raised to 9% (from 7%), and to 11% (from 9%) for the adapted work premium.

Tax credit for children’s activities

The maximum registration or membership fees have been increased from $300 to $400 per child. From a tax standpoint, this means that the maximum tax credit you can receive per child is now $80. If your child has a severe or prolonged impairment of their mental or physical functions, the maximum credit you can now claim is $160 (up from $120 in 2015).

Expenses for medical services not available in your area

The minimum distance that’s now required for medical services to be considered outside of your area is 200 km, down from 250 km in 2015. This relates to any travel, lodging, or moving expenses you paid after June 30, 2016.

Deduction for residents of designated remote areas

Starting in 2016, the basic and additional housing deductions that you can claim on your Québec return as someone living in a remote area has increased from $8.25 to $11 per day.

Income averaging for forest producers

If you’re a certified forest producer (or a member of a partnership that’s a certified forest producer) under the Sustainable Forest Development Act, you can average a portion of your income (over a period of no more than seven years) generated by the non-retail sales of timber produced by a privately-owned forest.

Age amount

The eligibility age for the age amount has been raised from 65 to 66.

Tax credit for workers 64 or older

This tax credit has undergone two changes for 2016. First, the eligibility age for workers has been lowered from 65 to 64. Second, the maximum eligible work income has been increased from $4,000 to $6,000 for workers over the age of 65. It’s important to note that the maximum credit you can receive in 2016 ($902.40) will be reduced if your eligible work income is over $33,505.

Tax credit for home-support services for seniors

To further help seniors living in Québec manage the costs associated with home-support services, 34% of home-support services expenses can now be claimed (up from 33% in 2015).

Tax credit for caregivers

If you’re taking care of your spouse (who’s a senior citizen and unable to live alone), you can now claim a credit of $1,000 on your return (up from $925 in 2015).

Tax credits for donations and gifts

  • Charitable donations and gifts

    Beginning in 2016, the amount of charitable donations and gifts that you can use to claim a tax credit on your return is no longer limited to just 75% of your net income.
  • Donations of food products

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

Dividends from taxable Canadian corporations

  • Gross-up percentage

    Beginning January 1, 2016, the gross-up percentage that’s applicable to ordinary dividends has been lowered from 18% to 17%.

Tax credit rate

Also beginning January 1, 2016, the tax credit rate that you can apply to the actual amount of ordinary dividends has been lowered from 8.319% to 8.2485%.