2008 Federal Budget Impact Paper

The 2008 Federal budget that was presented by the Honourable James M. Flaherty, Minister of Finance for the Government of Canada on February 26, 2008, was reviewed and contained no new income tax measures affecting federal public service pay or pension payments.


ITEMS OF INTEREST

Tax-Free Savings Account (TFSA)

Starting in 2009, Canadian residents aged 18 or older will be eligible to contribute up to $5,000 (indexed) annually to a TFSA, with any unused room being carried forward to future years.

Impact: It is anticipated that there will be no impact to payroll on the administration of the new program.

Northern Residents Deduction

Effective for the 2008 and subsequent taxation years, the budget proposes to increase the residency deduction by 10%, increasing the maximum deductions from $7.50 per day to $8.25 and from $15.00 per day to $16.50.

Impact: This increase will be incorporated into the 2008 income tax and benefit return.

To review the 2008 Federal Budget documents, please visit this site:

http://www.budget.gc.ca/2008/home-accueil-eng.asp