2009 home renovation tax credit hrtc
Download
1 / 22

Details MS Power Point file - PowerPoint PPT Presentation


  • 320 Views
  • Updated On :

2009 Home Renovation Tax Credit (HRTC) By Colin Chambers, CA Wilkinson & Company LLP 2009 Home Renovation Tax Credit (HRTC) Overview Eligibility Eligible Expenditures Tips Technical Interpretations Resources from CRA Summary Overview Introduced in January 27, 2009 Federal Budget

Related searches for Details MS Power Point file

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Details MS Power Point file' - jana


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
2009 home renovation tax credit hrtc l.jpg

2009 Home Renovation Tax Credit (HRTC)

By Colin Chambers, CA

Wilkinson & Company LLP

© Wilkinson & Company LLP, 2009


2009 home renovation tax credit hrtc2 l.jpg
2009 Home Renovation Tax Credit (HRTC)

  • Overview

  • Eligibility

  • Eligible Expenditures

  • Tips

  • Technical Interpretations

  • Resources from CRA

  • Summary

© Wilkinson & Company LLP, 2009


Overview l.jpg
Overview

  • Introduced in January 27, 2009 Federal Budget

  • Applies only to individuals

  • Applies only to 2009 taxation year

  • Applies to “eligible expenditures” made with respect to a “qualifying dwelling”

© Wilkinson & Company LLP, 2009


Overview cont d l.jpg
Overview (Cont’d)

  • Credit is at 15% of “eligible expenditures” in excess of $1,000, with maximum expenditure limit of $10,000

  • Maximum credit is $1,350, which is non-refundable

    • [($10,000 - $1,000) * 15%]

  • Credit is Federal only; no Ontario equivalent

  • No draft legislation issued as of June 3, 2009

© Wilkinson & Company LLP, 2009


Eligibility l.jpg
Eligibility

  • Expenditures must be made with respect to a qualifying dwelling

    • Generally means any dwelling that you own and is used personally by you or your family – includes home or cottage

  • Eligibility is family-based – i.e., one credit per family

© Wilkinson & Company LLP, 2009


Eligibility cont d l.jpg
Eligibility (Cont’d)

  • Expenditures incurred must be of “an enduring nature” and “integral to the dwelling”

  • Expenditures must have been incurred after January 27, 2009 and before February 1, 2010, according to an agreement entered into after January 27, 2009

  • All expenses must be supported by receipts

© Wilkinson & Company LLP, 2009


Eligible expenditures l.jpg
Eligible Expenditures

  • No draft legislation issued yet, so no definite lists of eligible expenditures have been issued

  • CRA has provided examples of items it feels will be eligible and ineligible expenditures

© Wilkinson & Company LLP, 2009


Eligible expenditures cont d l.jpg

Eligible

Renovating a kitchen, bathroom or basement

New carpet or hardwood floors

Building an addition, garage, deck, garden/storage shed, fence

Re-shingling a roof

A new furnace, woodstove, boiler, fireplace, water softener or water heater

A new driveway or resurfacing a driveway

Painting of interior or exterior of a house

Window coverings directly attached to the window frame and whose removal would alter the nature of the dwelling

Laying new sod

Swimming pools (permanent – in ground and above ground)

Fixtures – lights, fans etc.

Associated costs such as permits, professional services, equipment rentals and incidental expenses

Ineligible

Furniture, appliances, and audio and visual electronics

Purchasing of tools

Cleaning carpets

House cleaning

Maintenance contracts (e.g. furnace cleaning, snow removal, lawn care, and pool cleaning)

Financing costs

Eligible Expenditures (Cont’d)

© Wilkinson & Company LLP, 2009


Eligible expenditures cont d9 l.jpg
Eligible Expenditures (Cont’d)

  • Expenditures must be supported by “acceptable documentation”

  • CRA has said that this includes invoices, agreements and receipts

© Wilkinson & Company LLP, 2009


Eligible expenditures cont d10 l.jpg
Eligible Expenditures (Cont’d)

  • Documentation must clearly identify the type and quantity of goods purchased or services provided, including, but not limited to, the following:

    • Name, address and GST/HST number of vendor

    • Description of goods and date of purchase

    • Date of delivery of goods or provision of services

    • Description of work performed, including address where the work was performed

    • Amount of the invoice

    • Proof of payment

© Wilkinson & Company LLP, 2009


Slide11 l.jpg
Tips

  • If two or more families share ownership of a home, each family will be eligible for a separate credit, calculated on their share of eligible expenditures

    • E.g., if two brothers each own ½ of a cottage and spend $20,000 on eligible expenditures, each brother would be able to claim $10,000 in eligible expenditures and the resulting $1,350 credit

© Wilkinson & Company LLP, 2009


Tips cont d l.jpg
Tips (Cont’d)

  • If a family owns both a house and a cottage, they can claim eligible expenses for both, up to the $10,000 maximum per family

    • E.g., a taxpayer owns a house and a cottage and spends $5,500 in eligible expenses on his house and $6,000 in eligible expenses on his cottage, for total eligible expenses of $11,500. The taxpayer will be able to claim eligible expenses of the maximum of $10,000, resulting in a credit of $1,350

© Wilkinson & Company LLP, 2009


Tips cont d13 l.jpg
Tips (Cont’d)

  • Expenditures will not be eligible if the related goods or services are provided by a person not dealing at arm's length with the individual, unless that person is registered for GST/HST.

  • In the case of condominiums and co-operative housing corporations, a taxpayer’s share of the cost of eligible expenditures for common areas will qualify.

© Wilkinson & Company LLP, 2009


Tips cont d14 l.jpg
Tips (Cont’d)

  • If a taxpayer rents a part of his or her home, the taxpayer will only be able to claim expenditures related to the personal-use part of the home

  • Expenditures made for common areas must be pro-rated for the personal use portion and rental portion

© Wilkinson & Company LLP, 2009


Tips cont d15 l.jpg
Tips (Cont’d)

  • Rental example

    • A taxpayer owns her home, and rents out the basement, which represents ½ of the square footage of the home. The taxpayer spends $10,000 re-shingling her roof, and another $4,000 renovating a bathroom in the personal-use portion of the house

    • The taxpayer would be able to claim ½ of the re-shingling cost plus the cost of renovating her personal bathroom, for total eligible expenses of $9,000 and a total credit of $1,200

© Wilkinson & Company LLP, 2009


Tips cont d16 l.jpg
Tips (Cont’d)

  • Where an eligible expenditure qualifies for the Medical Expense Tax Credit (METC), the individual will be permitted to claim both the METC and the HRTC for that expenditure

© Wilkinson & Company LLP, 2009


Technical interpretations l.jpg
Technical Interpretations

  • 2009-0313841E5 – Hot Tubs

    • Hot tubs qualify for the HRTC, provided that they are hard wired directly into the electrical system

    • Portable “plug and play” hot tubs will not qualify

© Wilkinson & Company LLP, 2009


Technical interpretations cont d l.jpg
Technical Interpretations (Cont’d)

  • 2009-0316501E5 – Window Coverings

    • Any window covering, including blinds, shutters and shades, that is directly attached to the window frame will qualify for the HRTC

    • Draperies or curtains would generally not be considered to be fixtures and therefore will not qualify for the HRTC

© Wilkinson & Company LLP, 2009


Resources from cra l.jpg
Resources from CRA

  • Frequently Asked Questions:

    • http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhmrnvtn-eng.html

  • Sample Worksheet for Home Renovation Expenses:

    • http://www.cra-arc.gc.ca/tx/ndvdls/sgmnts/hmwnr/hrtc/wrksht-eng.html

© Wilkinson & Company LLP, 2009


Sample worksheet l.jpg
Sample Worksheet

© Wilkinson & Company LLP, 2009


Summary l.jpg
Summary

  • No draft legislation as of June 3, 2009

  • HRTC is only available in 2009

  • Applicable to both principal residence and other personal-use dwellings

  • Maximum eligible expenditures total $10,000 per family

© Wilkinson & Company LLP, 2009


Summary cont d l.jpg
Summary (Cont’d)

  • No credit until expenditures exceed $1,000

  • Maximum credit is $1,350

  • No provincial credit

  • Must have receipts – need to start keeping them now

© Wilkinson & Company LLP, 2009


ad