CD 2012-008

Subject: Tax Changes - Effective July 1, 2012

June 8, 2012

1. Purpose

1.1. The purpose of this directive is to provide clients with information relative to the tax legislation changes that are effective July 1, 2012.

1.2. A notice of information to employees concerning the above has been included with this compensation directive and will also be posted on the "Public Service Employee" page of the Compensation Sector Web site.

2. Background

2.1. The provincial budgets for Nova Scotia and Ontario contained changes to their respective tax legislation which will be effective July 1, 2012.

2.2. The explanations in this directive will assist compensation advisors in providing information to employees concerning the factors that may cause changes to their pay cheques.

3. Policy

3.1. Provincial Tax Credits, Tax Brackets and Rates Effective July 1, 2012.

3.1.1. Nova Scotia

The Nova Scotia budget introduced changes to three non-refundable tax credit amounts. The following table provides the changes to the Nova Scotia tax credit amounts, effective July 1, 2012.

Nova Scotia Personal Tax Credit amounts effective July 1, 2012
  Current Amount Amount Effective July 1, 2012
Disability amount maximum of $5,035 maximum of $9,647
Spouse or common-law partner amount maximum of $7,201 maximum of $9,761
Amount for an eligible dependant maximum of $7,201 maximum of $9,761

The "2012 Nova Scotia Personal Tax Credits Return" (TD1NS) form has been revised to include these changes.

3.1.2. Ontario

The Government of Ontario has announced that the province will add a new tax bracket for personal taxable income in excess of $500,000. The following table provides the changes to the Ontario tax brackets, effective July 1, 2012.

Ontario Tax brackets and rates effective January 1, 2012
Tax brackets Tax rates
$0 to $39,020 5.05%
$39,020 to $78,043 9.15%
Over $78,043 11.16%
Ontario Tax brackets and rates effective July 1, 2012
Tax brackets Tax rates
$0 to $39,020 5.05%
$39,020 to $78,043 9.15%
$78,043 to $500,000 11.16%
Over $500,000 13.16%

4. Procedures and Instructions

4.1. Compensation systems will be programmed to automatically reflect the new provincial tax rates for payments dated on or after July 1, 2012.

4.2. Effective July 1, 2012, employees who wish to obtain the additional tax credit for the Nova Scotia disability amount, the spouse or common-law partner amount or amount for an eligible dependant must file a revised TD1NS form. This form is available at District Taxation Offices (DTO) or from the Canada Revenue Agency (CRA) Web site: Forms listed by form number.

5. Inquiries

5.1. Any inquiries on the information contained in this directive should be addressed to your Public Works and Government Services Canada (PWGSC) Compensation Services Office.

Original Signed by
Jeff Marcantonio

Carrie E. Roussin
Director General
Compensation Sector
Accounting, Banking and Compensation

Reference(s):

Information Notice to Employees

The purpose of this notice is to provide you with information relative to the tax legislation changes that are effective July 1, 2012.

The provincial budgets for Nova Scotia and Ontario contained changes to their respective tax legislation which will be effective July 1, 2012.

Nova Scotia

The Nova Scotia budget introduced changes to three non-refundable tax credit amounts. The following table provides the changes to the Nova Scotia tax credit amounts effective July 1, 2012.

Nova Scotia Personal Tax Credit amounts effective July 1, 2012
  Current Amount Amount Effective July 1, 2012
Disability amount maximum of $5,035 maximum of $9,647
Spouse or common-law partner amount maximum of $7,201 maximum of $9,761
Amount for an eligible dependant maximum of $7,201 maximum of $9,761

The "2012 Nova Scotia Personal Tax Credits Return" (TD1NS) form has been revised to include these changes.

If you wish to obtain the additional tax credit for the Nova Scotia disability amount, the spouse or common-law partner amount or amount for an eligible dependant, you must file a revised TD1NS form. This form is available at District Taxation Office (DTO) or from the Canada Revenue Agency (CRA) Web site: Forms listed by forms number.

Ontario

The Government of Ontario has announced that the province will add a new tax bracket for personal taxable income in excess of $500,000. The following table provides the changes to the Ontario tax brackets, effective July 1, 2012.

Ontario Tax brackets and rates effective January 1, 2012
Tax brackets Tax rates
$0 to $39,020 5.05%
$39,020 to $78,043 9.15%
Over $78,043 11.16%
Ontario Tax brackets and rates effective July 1, 2012
Tax brackets Tax rates
$0 to $39,020 5.05%
$39,020 to $78,043 9.15%
$78,043 to $500,000 11.16%
Over $500,000 13.16%

Compensation systems will be programmed to automatically reflect the new provincial tax rates for payments dated on or after July 1, 2012.

Any request for information regarding the foregoing should be addressed to your compensation advisor.