Notice of Ways and Means Motion to amend the Income Tax Act and related Regulations
MINISTER OF FINANCE
That it is expedient to amend the Income Tax Act and related Regulations as follows:
R.S., c. 1 (5th Supp.)
Income Tax Act
1 (1) Paragraph (b) of the definition eligible child in subsection 63(3) of the Income Tax Act is replaced by the following:
(b) a child dependent on the taxpayer or the taxpayer's spouse or common-law partner for support and whose income for the year does not exceed the amount determined for F in subsection 118(1.1) for the year
(2) Subsection (1) applies to the 2020 and subsequent taxation years.
2 (1) Clause (a)(ii)(B) of the definition preferred beneficiary in subsection 108(1) of the Act is replaced by the following:
(B) whose income (computed without reference to subsection 104(14)) for the beneficiary's year does not exceed the amount determined for F in subsection 118(1.1) for the year, and
(2) Subsection (1) applies to the 2020 and subsequent taxation years.
3 (1) The portion of subsection 117.1(1) of the Act before paragraph (a) is replaced by the following:
Annual adjustment
117.1 (1) The amount of $1,000 referred to in the formula in paragraph 8(1)(s), each of the amounts expressed in dollars in subparagraph 6(1)(b)(v.1), subsection 117(2), the description of B in subsection 118(1), the description of A in subsection 118(1.1), paragraph (d) of the description of F in subsection 118(1.1), subsection 118(2), paragraph (a) of the description of B in subsection 118(10), subsection 118.01(2), the descriptions of C and F in subsection 118.2(1) and subsections 118.3(1), 122.5(3) and 122.51(1) and (2), the amount of $400,000 referred to in the formula in paragraph 110.6(2)(a), the amounts of $1,355 and $2,335 referred to in the description of A, and the amounts of $12,820 and $17,025 referred to in the description of B, in the formula in subsection 122.7(2), the amount of $700 referred to in the description of C, and the amounts of $24,111 and $36,483 referred to in the description of D, in the formula in subsection 122.7(3), the amount of $10,000 referred to in the description of B in the formula in subsection 122.91(2), and each of the amounts expressed in dollars in Part I.2 in relation to tax payable under this Part or Part I.2 for a taxation year shall be adjusted so that the amount to be used under those provisions for the year is the total of
(2) Subsection (1) applies to the 2021 and subsequent taxation years, except that the adjustment provided for in subsection 117.1(1) of the Act, as amended by subsection (1), does not apply for the 2021, 2022 and 2023 taxation years in respect of the amount expressed in dollars referred to in paragraph (d) of the description of F in subsection 118(1.1).
4 (1) Subparagraph (a)(i) of the description of B in subsection 118(1) of the Act is replaced by the following:
(i) the basic personal amount of the individual for the year, and
(2) The formula in subparagraph (a)(ii) of the description of B in subsection 118(1) of the Act is replaced by the following:
C + C.01 – C.1
(3) Subparagraph (a)(ii) of the description of B in subsection 118(1) of the Act is amended by striking out "and" at the end of clause (B) of the description of C and by adding the following after the description of C:
C.01 is the basic personal amount of the individual for the year, and
(4) Subparagraph (b)(iii) of the description of B in subsection 118(1) of the Act is replaced by the following:
(iii) the basic personal amount of the individual for the year, and
(5) The formula in subparagraph (b)(iv) of the description of B in subsection 118(1) of the Act is replaced by the following:
D + D.01 – D.1
(6) Subparagraph (b)(iv) of the description of B in subsection 118(1) of the Act is amended by striking out "and" at the end of clause (B) of the description of D and by adding the following after the description of D:
D.01 is the basic personal amount of the individual for the year, and
(7) Paragraph (c) of the description of B in subsection 118(1) of the Act is replaced by the following:
Single status
(c) except in the case of an individual entitled to a deduction because of paragraph (a) or (b), the basic personal amount of the individual for the year,
(8) Section 118 of the Act is amended by adding the following after subsection (1):
Basic personal amount — definition
(1.1) For the purposes of subsection (1), basic personal amount, of an individual for a taxation year, means the amount determined by the formula
A + B
where
A is $12,298; and
B is the amount determined by the formula
C – D × E
where
C is the amount determined by the formula
F – G
where
F is
(a) for the 2020 taxation year, $13,229,
(b) for the 2021 taxation year, $13,808,
(c) for the 2022 taxation year, $14,398, and
(d) for the 2023 and subsequent taxation years, $15,000, and
G is the amount determined for A,
D is the amount determined for C, and
E is
(a) if the individual's income for the year is less than or equal to the first dollar amount for the year referred to in paragraph 117(2)(d), nil, and
(b) in any other case, the lesser of 1 and the amount determined by the formula
(H – I)/J
where
H is the individual's income for the year,
I is the first dollar amount for the year referred to in paragraph 117(2)(d), and
J is the amount determined by the formula
K – L
where
K is the first dollar amount for the year referred to in paragraph 117(2)(e), and
L is the amount determined for I.
(9) Subsections (1) to (8) apply to the 2020 and subsequent taxation years.
5 (1) The description of A in subsection 146(1.1) of the Act is replaced by the following:
A is the amount determined for F in subsection 118(1.1) for that preceding taxation year; and
(2) Subsection (1) applies to the 2021 and subsequent taxation years.
6 (1) Paragraph 250(1)(f) of the Act is replaced by the following:
(f) was at any time in the year a child of, and dependent for support on, an individual to whom paragraph (b), (c), (d) or (d.1) applies and the person's income for the year did not exceed the amount determined for F in subsection 118(1.1) for the year; or
(2) Subsection (1) applies to the 2020 and subsequent taxation years.
C.R.C., c. 945
Income Tax Regulations
7 (1) Subparagraph (b)(i) of the description of B in subsection 103.1(2) of the Income Tax Regulations is replaced by the following:
(i) the amount determined for F in subsection 118(1.1) of the Act for the taxation year, and
(2) Subsection (1) applies to the 2020 and subsequent taxation years.
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