Year-end Finance Canada and CRA announcements – in case you missed it

Finance Canada and the Canada Revenue Agency (CRA) announced several updates as 2022 came to a close, including the following:

  • 2023 Automobile Deduction Limits and Benefit Rates – Due to inflation and higher interest rates, the automobile limits were increased for all amounts other than the $300 deduction limit for new automobile loans. 
  • UHT guidance – The CRA released guidance on the Underused Housing Tax (UHT), which applies a 1 per cent tax on the ownership of vacant or underused housing in Canada that took effect on January 1, 2022. The tax usually applies to non-resident, non-Canadian owners. But, in some situations, it also applies to Canadian owners. We understand that the CRA will issue further guidance and we have provided suggestions on areas where more information will be needed. CPA Canada will also release a tax blog on the UHT later in January or early February. 
  • New filing options for special elections and returns – The CRA has released information on new filing options for “special elections and returns”, such as the T2054 election for capital dividends. At present, the CRA page only refers to filing these elections and returns electronically using My Account, My Business Account, or Represent a Client. We understand that efiling using tax preparation software will also become available at a later date. We have sent a number of suggestions and queries to the CRA and we will provide more information as it becomes available. 
  • EFILE / RepID update – On December 19, the CRA posted an update to its EFILE news and program updates page with more information on a new CRA initiative involving the transmission of RepIDs with returns where the EFILE system is used. In particular, the CRA stated that “starting February 20, 2023, as an additional level of security, you will be asked to enter a valid RepID when you file a return of income through EFILE software. This field will be optional during the upcoming filing season and it should be left blank if you do not have a valid RepID within the list of EFILE applicants.”

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