“This Plan is providing comprehensive and targeted tax relief to support Canadians and their families immediately during this difficult economic period,” said Minister Blackburn. “Tax relief is an essential part of the government’s effort to stimulate the economy, to help build a solid foundation for future economic growth, and to create more jobs.”
The basic personal amount has been increased from $9,600 in 2008 to $10,320 in 2009, allowing Canadians to earn more income before paying federal income tax. The upper limit on each of the two lowest income tax brackets has been raised by 7.5%, so that Canadians can earn more at lower tax rates. Many families will receive increased federal child benefits because the income levels where the benefits starts to be phased out have been increased. Funding for the Working Income Tax Benefit has also been increased. The maximum age amount has been increased by $1,000, and will continue to be adjusted annually to account for inflation. For the 2009 tax year, this means a tax savings of up to $150 for seniors.
The Canada Revenue Agency has already issued revised payroll deductions tables to employers to reflect the tax reductions, and all employers are expected to adjust source deductions for employees accordingly.
“In total, the government has promised some $20 billion in personal income tax reduction for Canadians and business over five years beginning in 2008-2009,” said Minister Blackburn, adding, “This demonstrates positive action on the economy and a positive impact on the financial situation of Canadians.”
For additional information on the new tax measures can be found on the Canada Revenue Agency’s web site at cra.gc.ca. For more information about Canada’s Economic Action Plan, go to actionplan.gc.ca.