Tax news and Alerts cover significant tax developments and changes in the month that affect Canadian individuals and businesses.
Employment Insurance Premiums for 2022 (January 2022)
The Employment Insurance premium rate for 2022 is unchanged at 1.58%.
Yearly maximum insurable earnings are set at $60,300, making the maximum employee premium $952.74.
As in previous years, employer premiums are 1.4 times the employee premium. The maximum employer premium for 2022 is therefore $1,333.84.
Quebec Pension Plan contributions for 2022 (January 2022)
The Quebec Pension Plan contribution rate for 2022 is set at 6.15% of pensionable earnings for the year.
Maximum pensionable earnings for the year will be $64,900, and the basic exemption is unchanged at $3,500.
The maximum employer and employee contributions to the plan for 2022 will be $3,776.10 each.
Canada Pension Plan Contributions for 2022 (January 2022)
The Canada Pension Plan contribution rate for 2022 is set at 5.7% of pensionable earnings for the year.
Maximum pensionable earnings for the year will be $64,900, and the basic exemption is unchanged at $3,500.
The maximum employer and employee contributions to the plan for 2022 will be $3,499.80 each, and the maximum self-employed contribution will be $6,999.60.
Federal individual tax credits for 2022 (January 2022)
Dollar amounts on which individual non-refundable federal tax credits for 2022 are based, and the actual tax credit claimable, will be as follows:
Credit amount Tax credit
Basic personal amount* 14,398 2,159.70
Spouse or common law partner amount* 14,398 2,159.70
Eligible dependant amount* 14,398 2,159.70
Age amount 7,898 1,184.70
Net income threshold for erosion of age credit 39,826
Canada employment amount 1,287 193.05
Disability amount 8,870 1330.50
Adoption expenses credit 17,131 2,569.65
Medical expense tax credit
Income threshold amount 2,479
*For taxpayers having net income for the year of more than $155,625, amounts claimable for the basic personal amount, the spousal amount, and the eligible dependent amount for 2022 may differ.
Federal individual tax rates and brackets for 2022 (January 2022)
The indexing factor for federal tax credits and brackets for 2022 is 2.4%. The following federal tax rates and brackets will be in effect for individuals for the 2022 tax year.
Income level Federal tax rate
$14,398 – $50,197 15%
$50,198 – $100,392 20.5%
$100,393 – $155,625 26%
$155,626 – $221,708 29%
Over $221,708 33%
CRA issues automobile expense deduction limits for 2022
Some of the changes include an increase in the ceiling for capital cost allowances for passenger vehicles, from $30,000 to $34,000. Deductible leasing costs are also increased, from $800 to $900 per month, for new leases entered into. The limit on the deduction of tax-exempt allowances paid by employers to employees who use their personal vehicle for business purposes will increase by two cents per kilometre. Finally, the general prescribed rate used to determine the taxable benefit of employees relating to the personal portion of automobile expenses paid by their employers is also increased by two cents per kilometre.
Detailed information on the rates and limits applicable for 2022 can be found on the CRA website at https://www.canada.ca/en/department-finance/news/2021/12/government-announces-the-2022-automobile-deduction-limits-and-expense-benefit-rates-for-businesses.html.
Access to Canada Worker Lockdown Benefit expanded
Changes have been announced which expand the circumstances in which workers can qualify for the CWLB. Effective as of December 19, 2021 (and until February 12, 2022), the CWLB is available to workers in regions where provincial or territorial governments have introduced capacity-limiting restrictions of 50% or more for a period of at least 7 days, and which result in an income loss for the worker of at least 50%. The benefit amount remains at $300 per week. A current listing of eligible regions for purposes of the CWLB can be found on the federal government website at https://www.canada.ca/en/revenue-agency/services/benefits/worker-lockdown-benefit/cwlb-regional-lockdowns.html.
More information on the program and the most recent changes can be found on the federal government website at https://www.canada.ca/en/department-finance/news/2021/12/temporarily-expanding-eligibility-for-the-local-lockdown-program-and-the-canada-worker-lockdown-benefit.html and https://www.canada.ca/en/department-finance/news/2021/12/government-temporarily-expands-access-to-lockdown-program-and-worker-lockdown-benefit.html.
Old Age Security rates for first quarter of 2022
The amount of Old Age Security (OAS) benefit paid to eligible Canadians is adjusted each quarter to take account of increases in the Consumer Price Index.
Based on recent increases to the Consumer Price Index, the federal government has announced that, for the first quarter (January to March) of 2022, the basic OAS benefit paid will increase by 1.1%, to $642.25.
More information on OAS and related payments during the first quarter of 2022 is available at https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html.
Medical Expenses
Medical Expense tax credit is a non-refundable tax credit that you can use to reduce the tax that you paid or may have to pay. If you paid for healthcare expenses, you may be able to claim them as eligible Medical Expenses on your income tax and benefit return.
Additional information of Medical Expenses can be found on the EF website at 2021 Medical Expenses – Expert Fiscaliste (expert-fiscaliste.org)
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