(Please see the beginning of the article in our previous post)
Deductions and Expenses
Under the new rules, the AMT base would be broadened by disallowing
50 per cent of the following deductions:
• employment expenses, other than those to earn commission income;
• deductions for Canada Pension Plan, Quebec Pension Plan, and
Provincial Parental Insurance Plan contributions;
• moving expenses;
• child care expenses;
• disability supports deduction;
• deduction for workers’ compensation payments;
• deduction for social assistance payments;
• deduction for Guaranteed Income Supplement and Allowance
payments;
• Canadian armed forces personnel and police deduction;
• interest and carrying charges incurred to earn income from property;
• deduction for limited partnership losses of other years;
• non-capital loss carryovers; and
• Northern residents deductions.
Expenses associated with film property, rental property, resource property, and
tax shelters that are limited under the existing AMT rules would continue to be
limited in the same manner.
Non-Refundable Credits
Currently, most non-refundable tax credits can be credited against the AMT.
The government proposes that only 50 per cent of non-refundable tax credits
would be allowed to reduce the AMT, subject to the following exceptions.
The Special Foreign Tax Credit would continue to be allowed in full, and would
be based on the new AMT tax rate.
The proposed AMT would continue to use the cash (i.e., not grossed-up) value
of dividends and fully disallow the Dividend Tax Credit.
Some non-refundable credits that are currently disallowed would continue to be
disallowed in full: the Political Contribution Tax Credit, the Labour Sponsored Venture
Capital Corporations Credit, and the non-refundable portion of investment tax credits.
Please see our next posts to continue reading the article.
*The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions, a further review should be done by a qualified professional.
No individual or organization involved in either the preparation or distribution of this text accepts any contractual, tortious, or any other form of liability for its contents.
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