From the bottom of our hearts, thank you for helping us spread joy and giving back this holiday season!

Airikka Passmore & Associates

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The holiday season is almost here, and we’re excited to announce that Airikka Passmore & Associates is transforming into an Elf Workshop from December 2nd to December 20th! This year, we’re offering gift wrapping services with all proceeds going to Food4Kids Halton.

Gift Wrapping Options {per gift}:
– Basic Wrapping: $5 (small/medium) | $10 (large)
– Premium Wrapping with Decorations: $10 (small/medium) | $20 (large)

Special Offer:  Wrap 5 gifts, and enjoy a $5 discount!

Extended Hours:
– Dec 2nd–13th: Tuesdays and Thursdays until 7:00 pm
– Dec 15th–20th: Every evening until 7:00 pm

Let’s make this season special together! To sign up for gift wrapping or if you have any questions, please contact Liz Hooper directly (lizz@airikkapassmore.com) or 905-693-8269 ext. 228.

If you wish to make a non-perishable food donation only, please feel free to stop by our office during business hours.

Since Food4Kids Halton’s mission is to provide packages of healthy food for elementary school students with little or no access to food during the weekend and throughout the summer, Food4Kids Halton is always in need of the following items:

Approved non-perishable food items:

• Apple sauce
• Granola Bars (Nut Free/School Safe)
• Canned Soup (Condensed)
• Canned Tuna

Learn more about Food4Kids Halton here: https://food4kidshalton.ca/what-we-do/

Warm wishes and happy holidays,
The Airikka Passmore & Associates Team 🎄

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Gifts vs. Awards

– Gifts are typically given for personal occasions, such as birthdays or holidays, acknowledging the individual outside of their job performance.

– Awards are meant to recognize an employee’s contributions or achievements at work. They may celebrate exceptional performance, career milestones (like years of service), or other accomplishments beyond regular duties. These awards are usually exclusive, based on criteria like nominations or evaluations, and not broadly distributed.

Tax Treatment of Gifts and Awards

– Cash or Cash-Like Rewards: Cash gifts and awards, as well as cash-equivalent items like redeemable gift cards, are taxable and must be reported as income.

– Non-Cash Gifts and Awards: Non-cash rewards are generally non-taxable if their fair market value (FMV) is $500 or less in a given year. If the total FMV of non-cash gifts and awards exceeds $500 annually, the excess amount will be considered taxable income.

Exemptions and Special Rules

– Selective Awards: Awards that go through an evaluation or nomination process with limited recipients are not taxable, even if their value exceeds $500.

– Years of Service Awards: Non-taxable awards can be given for years of service, provided the employee has completed at least five years with the company and hasn’t received a similar award within the last five years. These awards are treated separately from other non-cash gifts for tax purposes, allowing the $500 limit to apply to other gifts and awards independently.

– Trivial Items: Low-value items like mugs, t-shirts, or branded promotional products are classified as “trivial” and do not count toward the $500 non-cash gift limit.

Gift Cards and Certificates

CRA updates clarify that gift cards are only considered non-cash when they meet these conditions:

– The card is pre-loaded with a set amount.
– It is only redeemable at specific retailers or a limited group of retailers.
– The balance on the card cannot be converted to cash as specified in the card’s terms.

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One advantage of the FHSA is that, like a TFSA or RRSP, it offers a range of investment options, including stocks, ETFs, and mutual funds. The FHSA combines the tax-free benefits of a TFSA and the tax-deductible contributions of an RRSP, but it’s specifically designed for first-time homebuyers. You can contribute to the FHSA until you reach its lifetime limit or for up to 15 years after opening the account.

The FHSA is different from the RRSP Home Buyers’ Plan (HBP), which allows for a $35,000 RRSP withdrawal toward a first home purchase, requiring repayment to avoid taxes. Unlike the HBP, FHSA withdrawals don’t need to be repaid, making it a more flexible option for first-time buyers.

To open an FHSA, you’ll need a certified issuer, such as a bank or credit union. You can contribute up to $8,000 annually, with a lifetime limit of $40,000, and any unused contribution room can carry forward to the next year. For example, if you contribute $5,000 in 2023, your contribution limit for 2024 would increase to $11,000.

If you don’t have immediate savings, you can also transfer funds directly from an RRSP to an FHSA without tax implications, though these transfers count toward your annual and lifetime FHSA limits and don’t restore RRSP contribution room.

To qualify for an FHSA, you must not have owned any real property in the past four years, either individually or jointly with a spouse or common-law partner. Additionally, your spouse or partner cannot currently own the home you live in.

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When you receive an audit notice, it’s important to respond promptly and provide the requested documentation. Audits vary in complexity, from simple reviews to comprehensive examinations of income, deductions, and credits. Common triggers for audits include large or unusual expenses, self-employment income, or discrepancies between income filed and reported by third parties. Understanding why you might be audited can help ease anxiety, but even so, audits require careful attention to detail.

Professional assistance can be invaluable during an audit. Working with a tax professional ensures that responses to CRA requests are accurate, thorough, and timely, which can help avoid additional scrutiny or potential penalties. We are here to provide our expertise, guiding you through document organization, response preparation, and liaising with CRA agents, so you can focus on what matters most to you.

If you’ve received an audit letter from the CRA, don’t face it alone. Let our team support you through the process and bring peace of mind to an often stressful experience. Contact us to discuss how we can assist with CRA audits and keep your financial well-being on track.

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Additionally, the government will expand 30-year mortgage amortizations to all first-time buyers and anyone purchasing a new-build property. Initially limited to new builds, this change addresses affordability, supporting younger Canadians amid rising costs.

Justice Minister Arif Virani also outlined forthcoming bills focused on renters’ and buyers’ rights, including protections against renovictions and a push for transparent bidding processes. This reform package follows extensive public pressure to address housing affordability, with the government framing it as one of the boldest actions in decades.

With housing remaining a top concern for Canadians, these changes reflect efforts to adapt mortgage policies to a modern economy. The government anticipates releasing further economic updates soon, highlighting this as a critical focus for young Canadians aiming to enter the housing market.

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It’s been a tumultuous year for everyone and we hope you and your loved ones have remained healthy and optimistic. For those of you we haven’t spoken with since last tax season, we look forward to hearing from you.

To make it easier for our clients to provide their information securely, we have purchased a cloud-based storage portal for each of our clients and will be providing the personalized link to you free of charge. You can reach out to us at anytime to have your portal link sent to you prior to sending us your documents or we will send it to you once you have emailed any slips to our staff. With all the data breaches that have ensued over the past few years we felt the need to protect your identity by adding this service which will allow you to safely store all tax documents throughout the year as well as provide a handy place to keep past tax returns and Notice of Assessments so you know exactly where they are when you need them.

We have received a lot of positive feedback regarding our enhanced texting feature at the office and will continue to use this as a way to communicate when your tax package is ready for pickup if you selected a paper copy or has been uploaded to your portal and requires a signature. Should you want to send our staff a message using this feature, the number is 289-270-0264.

Please follow us on social media for current up to date posts related to changes in tax deadlines and helpful tips throughout tax season and the remainder of the year. We will also be posting alerts to when our office will begin accepting in person appointments and extended hours.

We ask for your patience while we work on preparing your tax return as we have to anticipate for staff shortages due to the Ministry’s requirement that no employee can come to work with any type of illness during this time. Our goal is to provide turnaround times of 7-10 days but we may need a few extra days due to circumstances related to this unavoidable issue.

We are currently accepting new clients by referral of existing clients only at this time so make sure anyone you refer mentions you by name!

Ways to get us your tax information

We will be open for in person drop offs as of March 15^th and will keep our doors open provided the region continues to allow for us to facilitate this service. You will be permitted to come in one at a time and at this time we ask that you do not bring children into the office. Based on the Region of Halton’s regulations, you are not permitted onsite without a mask covering and will be briefly screened upon entry that you have not recently been exposed to COVID-19. We must also track everyone who comes onsite for Contact tracing which will be entered into a daily register by one of team members. Please be aware of the markings on the floor upon arriving as we must screen you prior to you leaving this area and unfortunately clients must remain in the vestibule area and are not permitted in any staff areas or previous meeting areas in our office during this time.

We have an onsite lockbox outside our suite with access to the building allowing for drop-offs Monday to Friday from 9am-9pm, Saturday from 9am- 5pm and Sunday from 9am-4pm.

Request your link to your personalized cloud storage which will notify our team when you have uploaded your tax documents.

Important changes for the 2020 Tax Year 

Work from home during Pandemic- Allowable claim using prorated amount

If you worked from home in 2020 due to COVID-19, you may be able to claim certain employment expenses. If you haven’t previously been required to work from home you can claim the temporary flat rate of $2 per day (to the max amount of $400) or claim the actual amounts you paid.

Temporary flat rate method

This method simplifies your claim for home office expenses (work-space-in-the-home expenses and office supply and phone expenses). If you worked more than 50% of the time from home for a period of at least four consecutive weeks in 2020 due to the COVID-19 pandemic, you can claim $2 for each day you worked from home during that period. You can then also claim any additional days you worked at home in 2020 due to the COVID-19 pandemic. The maximum amount that can be claimed is $400 per individual. This method can only be used for the 2020 tax year.

If you are only claiming home expenses you will need to complete the Form T777S-Statement of Employment Expenses for Working at home due to COVID-19 

If you are claiming the detailed amount and or additional employment expenses you will need to have the for T777- Statement of Employment Expenses completed for us to complete your filing.

In order to claim employment expenses you will need to have your employer sign the T2200S (for work from home expenses) or the T2200 (for additional employment expenses. You can obtain both on our website by clicking on the form names.

Detailed method

This method allows you to claim the actual amounts you paid, supported by documents. You must complete Form T777S or Form T777 and get a completed and signed Form T2200S or Form T2200 from your employer.

Automobile allowance rates

The automobile allowance rates for 2020 are:

• 59₵ per kilometre for the first 5,000 kilometres driven
• 53₵ per kilometre driven after that

Please note that you cannot use km rate for employment expenses and must have the actual expense receipts to make a claim for vehicle expenses.

Introducing the digital news subscription expenses – starting 2020 until 2024

You can claim up to $500 for amounts paid in 2020 for qualifying subscription expenses. You must have paid the amounts to a qualified Canadian journalism organization (QCJO) that does not hold a license to broadcast, for a digital news subscription to content that is primarily original news.

Only the individual(s) who entered into the agreement for the subscription can claim the expenses. If you and another person can claim the same qualifying subscription expenses, you can split the claim for that digital news subscription expenses. However, the total amount of your claim and the other person’s claim cannot exceed the maximum amount allowed for this credit.

Canada training credit (CTC)

You can claim the CTC for eligible tuition and other fees paid to an eligible educational institution in Canada for courses you took in 2020, or fees paid to certain bodies, in respect of an occupational, trade or professional examination taken in 2020, if all of the following apply:

• You were resident in Canada for all of 2020
• You were at least 26 years old and less than 66 years old at the end of the year
• You have a Canada training credit limit (CTCL) for 2020 on your latest notice of assessment or reassessment for 2019

You can claim up to whichever of the following is less:

• half of the fees claimed on line 32000 of your federal Schedule 11
• your CTCL for 2020

New box numbers on 2020 T4 slips

If you received employment income in 2020, you will see new box numbers (57, 58, 59, and 60) at the bottom of your 2020 T4 slip. These boxes are only for CRA use and no action is required by you.

These amounts include employment income paid between March 15 to September 26, 2020, which are already included in box 14 of your T4 slip.

Amounts received related to COVID-19

During the year, you may have received federal, provincial, or territorial government COVID-19 payments such as the Canada Emergency Response Benefit (CERB). If these amounts are taxable, you will have received a slip, such as a T4A or T4E, with instructions for how to report these amounts. These slips also are available in My Account.

If you are self-employed, you may have received federal, provincial, or territorial government COVID-19 assistance for your business, such as the Canada Emergency Wage Subsidy (CEWS). Generally, you have to either include these amounts in business income or reduce your expenses by the amounts that you received. You may also have received a government loan. The loan itself is not taxable, but you have to include in your business income any portion of the loan that is forgivable.

Even if you received an information slip showing taxable income, if you received any part of these amounts based on income that is exempt from tax under the Indian Act, complete Form T90, Income Exempt From Tax Under the Indian Act.

If you received the Canada Recovery Benefit (CRB), you may have to repay all or part of it, if your net income after certain adjustments is more than $38,000. The repayment is calculated on the Worksheet for the return at line 23500, as part of the social benefits repayment calculation.

If you have any questions regarding changes to the 2020 tax filings or would like to get in touch with us to send in your tax information, please contact info@airikkapassmore.com or call 905-693-8269.

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• The deadline to apply has been extended from October 31st to December 31st.
• As of Oct 26, businesses operating from a personal account can now apply.
• Expansion on lending from 40k to 60k with 25% forgiveness – the business must show Loss of income due to COVID (details coming soon about the applying process).

CEBA hotline- an agent will call back tel:+1-888-324-4201

CEWS (Canada Emergency Wage Subsidy)

CEWS has been extended until June 2021. On October 14th, an announcement was made that periods ending Oct-Dec will now have a max base rate of 40% (instead of original decline method) and the max with top up will be 65% (business with a loss of 70% or over).
They will provide more details about changes for 2021 periods. Also removed the requirement of employees being paid for 14 days prior to qualifying. keep watch for update on this one

CERS- Commercial emergency rent subsidy

• New program which allows the tenant to apply without a landlord. Subsidizing up to 65% on a sliding scale based on loss paid directly to tenant.
• Increase of additional 25% to current CERS program for businesses closed due to second wave over and above 65%.
• Program can be applied for retroactively from September 27th until December 2020.
• This program will continue until June 2021.

CECRA- original commercial rent subsidy (applied for by landlord)

Final period has to be applied for by no later than October 30th, 2020.

Relief for indigenous business owners

$40k loan, of which $30k is interest free and $10k non repayable. Apply through aboriginal financial institution

High Affected Sectors Credit Availability Program (HASCAP)

Helping hardest-hit businesses access additional financing on more flexible terms. Some businesses such as those in tourism and hospitality, have been more heavily impacted as a result of Covid-19 and are struggling more than others to access financing.  If you are a Canadian business that needs additional cash flow to cover operational costs, you may be eligible for the HASCAP guarantee through your financial institution. For more information, visit bdc.ca/HASCAP

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Canada Emergency Response Benefit (CERB) and Canada Emergency Student Benefit (CESB).

CERB recipients need to be aware that the CERB is a taxable benefit and is considered ordinary income. In other words, the amount of taxes owed from CERB payments will depend on the recipient’s total income for 2020 and their marginal tax rate for the year Recipients of these benefits will get a T4A slip from CRA.

Canada Recovery Benefit (CRB), Canada Recovery Sickness Benefit (CRSB), and Canada Recovery Caregiving Benefit (CRCB)

The government is withholding 10 per cent in taxes at source. In addition, when it comes to the CRB, you may have to pay money back if your additional income for 2020 is more than $38,000. The claw back rate is $0.50 for each dollar of CRB received for net income over this amount.

Basic Personal Amounts (Federal)

The basic personal amount was $12,069 in 2019 and has been increased to $13,229 for 2020; what this means is that a taxpayer can earn up to this amount before paying any federal income tax.

The simplified home office deduction- including those working from home due to the Pandemic

If you’re an employee who’s been toiling at home more than 50 per cent of the time over at least four consecutive weeks in 2020 due to COVID-19, you’ll be able to claim a deduction of $2 for every work-from-home day up to a maximum of $400. This is what the CRA is calling a temporary flat-rate method of calculating the home office deduction. If you’re an employee with significant home office expenses, you can use the current “detailed method” of calculating the home office tax break. If using the simplified method you will not be required to provide a T2200 or the simplified version T2200S nor will you need to keep records of expenses. If choosing to use the detailed method you will have to have this form signed by your employer and keep your supporting documents for the 7 year requirement period.  The CRA has launched an online calculator to assist with this.

NEW– Home office expenses can now include your internet expense. It will be claimed under the utilities column on your T777. You cannot include the cost of connection OR the rental portion of a modem or router.

Use of Employers Vehicle and reporting Personal Usage amount

Business lockdowns, reduced business activity, and other changes to our daily and business lives throughout the pandemic, may result in an employee’s business or personal mileage being reduced compared to a normal year. If employees have used the automobile substantially less for business purposes during the pandemic, they may no longer qualify for the reduced standby charge for tax purposes, even though their personal driving use might be similar or less than last year.

To address this, the government proposes to allow employees to use their 2019 automobile usage to determine whether they use the automobile primarily for business purposes in order to access the reduced standby charge in 2020 and 2021. Only employees with an automobile provided by the same employer as in 2019 would be eligible for this option.

Digital News Subscriptions Tax Credit

The maximum credit will be calculated by:

• multiplying the lowest personal income tax rate (15%) by the total of all amounts paid by the individual for qualifying subscription expenses in the year up to $500.

Only the individual(s) who entered into the agreement can claim the credit:

• if more than one individual is entitled to claim the qualifying subscription expense for a year (i.e. spouses, roommates, etc.), the total amount can be split between them provided that the total amount claimed is not more than the maximum amount that would be allowed if only one of them made the claim.

If the qualifying subscription is eligible and provides access to content in non-digital form or content other than content of the QCJO:

• only the cost of a stand-alone digital subscription to the content of the QCJO will be an eligible expense; and
• if there is no stand-alone subscription, the amount is limited to the cost of a comparable stand-alone digital subscription that provides access to content of a QCJO. If there is no comparable digital news subscription then only one half of the amount paid is an eligible expense.

Canada Training Benefit

The federal government introduced the Canada Training Benefit to help with disruption in the labor force due to changes in technology. This refundable tax credit is designed to lower the barrier to professional development and to provide financial support to help pay for half of the tuition and training fees. As a worker, you’ll be eligible to receive up to $250 annually as a tax credit. This amount goes into a notional account, which the worker can use for eligible purposes.

To be eligible to accumulate $250 in a year, you must meet the following criteria:

• File a tax return for that year
• Be at least 26 years old and no older than 65 years old at the end of the year
• Be a Canadian resident during the year
• Have eligible earnings of minimum $10,000 and maximum $150,000 in the year (this includes employment, self-employment, and maternity and parental benefits)

Claiming Cannabis as a Medical Expense

To reflect the fact that cannabis is legal in Canada, the federal government will be amending the ITA. You can claim a medical expense tax deduction for any cannabis products that you buy as a patient after October 16, 2018. If you didn’t claim your medical cannabis on your 2018 or 2019 return, you may submit these now as an adjustment to those particular tax years.

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