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• Revised income tax information
• Are you using the correct tax and benefit package?

We list the major changes below, including income tax changes that have been announced but were not law at the time of printing. If they become law as proposed, they will be effective for 2005 or as of the dates indicated. For more details on these and other changes, see the areas outlined in yellow in this guide.

Marital status - The proposed amendments to the Income Tax Act regarding same-sex relationships have now become law. The CRA has made adjustments to reflect these changes.

Child Disability Benefit - The maximum amount for the supplement has increased to $2,000. See Canada Child Tax Benefit (CCTB) and Child Disability Benefit (CDB) for details.

Eligibility of new home construction or home renovations or alterations for disabled persons (lines 330 and 331) - The rules for these expenses have been clarified.

Foreign property rule - The 30% limit in respect of foreign property that may be held by pension funds and other deferred income plans has been eliminated. See guide T4040, RRSPs and Other Registered Plans for Retirement, for details.

Registered retirement savings plans (RRSP) and certain deferred income plans - New investments have been added to the list of qualified investments. For more information, get guide T4040, RRSPs and Other Registered Plans for Retirement .

Schedule 3 - Line 195 (Capital gains reduction on flow-through entities) has been removed. For more information, get guide T4037, Capital Gains.

Disability supports deduction (line 215) - You can now claim certain additional expenses.

Adoption expenses (line 313) - Certain expenses are now allowable as a non-refundable tax credit to individuals who adopt a child under the age of 18 years.

Disability amount (line 316) - Certain conditions for this non-refundable tax credit have changed.

Medical expenses (lines 330 and 331) - You can now claim certain additional medical expenses for you, your spouse or common-law partner and your dependent children born in 1988 or later, or other dependants.

Allowable amount of medical expenses for other dependants (line 331) - The maximum amount has been increased to $10,000.

Refundable medical expense supplement (line 452) - The maximum amount has increased to $750.

Revised income tax information

On November 14, 2005, the Minister of Finance announced the following proposed income tax measures that are effective as of January 1, 2005:

Federal tax rate - The lowest personal tax rate has been reduced from 16% to 15%.

Basic personal amount (line 300) - The amount has increased to $8,648.

Spouse or common-law partner amount (line 303) - The maximum amount has changed. See line 303 for details.

Amount for an eligible dependant (line 305) - The maximum amount has changed. See line 305 for details.

Forms affected by these measures have been revised.

Are you using the correct tax and benefit package?

It is important to use the correct package so that your tax and credits can be calculated properly. To make sure you are using the correct package, see “Is this tax and benefit package for you?” and "What tax and benefit package should you use if this is one is not for you?".

Visually impaired persons can get our publications in braille, large print, or etext (computer diskette), or on audio cassette by visiting our Web site at www.cra.gc.ca/alternate or by calling 1‑800‑959‑2221 weekdays from 8:15 a.m. to 5:00 p.m. (Eastern Time).

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