ARCHIVED CD 2009-005
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March 20, 2009
SUBJECT: Tax Changes -- Effective April 1, 2009
1. PURPOSE
1.1. The purpose of this directive is to provide clients with information relative to the changes in tax legislation effective April 1, 2009.
1.2. A notice of information to employees concerning the above-mentioned subject has been included with this Compensation Directive.
2. BACKGROUND
2.1. The federal budget contains changes to both the federal and Yukon tax legislation, as it is harmonized with the federal tax legislation. These changes will come into effect on April 1, 2009.
2.2. The explanations in this directive will help compensation advisors provide information to employees concerning the factors that may cause changes to their pay cheques.
3. POLICY
3.1 Federal and Yukon Tax Brackets, Rates and Tax Credits Effective April 1, 2009
Federal Changes
The following table provides the changes to the federal tax brackets effective April 1, 2009.
| Tax brackets and rates effective January 1, 2009 | Prorated Tax brackets and rates effective April 1, 2009 | ||
|---|---|---|---|
| Tax brackets | Tax rates | Tax brackets | Tax rates |
| More than - Not more than | More than - Not more than | ||
| $0 to $38,832 | 15% | $0 to $41,200 | 15% |
| $38,832 to $77,664 | 22% | $41,200 to $82,399 | 22% |
| $77,664 to $126,264 | 26% | $82,399 to $126,264 | 26% |
| Over $126,264 | 29% | Over $126,264 | 29% |
Personal Tax Credits
The 2009 Budget announced that, effective January 1, 2009, the basic personal amount, the spouse or common-law partner amount and the amount for an eligible dependent would be set at $10,320, and the age amount would be set at $6,408. The following table provides the changes to the federal tax credit amounts effective April 1, 2009.
| Current amount | Retroactive amount effective January 1, 2009 | Prorated amount effective April 1, 2009 | |
|---|---|---|---|
| Basic personal amount | $10,100 | $10,320 | $10,375 |
| Age amount | maximum of $5,408 | maximum of $6,408 | maximum of $6,658 |
| Spouse or common-law partner amount | maximum of $10,100 | maximum of $10,320 | maximum of $10,375 |
| Amount for an eligible dependent | maximum of $10,100 | maximum of $10,320 | maximum of $10,375 |
The "Personal Tax Credits Return" (TD1) form will be revised to include these changes.
Yukon Changes
The Yukon tax brackets are harmonized with the federal tax brackets. Therefore, the following table provides the changes to the Yukon tax brackets effective April 1, 2009.
| Tax brackets and rates effective January 1, 2009 | Prorated Tax brackets and rates effective April 1, 2009 | ||
|---|---|---|---|
| Tax brackets | Tax rates | Tax brackets | Tax rates |
| More than - Not more than | More than - Not more than | ||
| $0 to $38,832 | 7.04% | $0 to $41,200 | 7.04% |
| $38,832 to $77,664 | 9.68% | $41,200 to $82,399 | 9.68% |
| $77,664 to $126,264 | 11.44% | $82,399 to $126,264 | 11.44% |
| Over $126,264 | 12.76% | Over $126,264 | 12.76% |
Personal Tax Credits - Yukon
The Yukon tax credit amounts are harmonized with the federal tax credit amounts. Therefore, effective January 1, 2009, the basic personal amount, the spouse or common-law partner amount and the amount for an eligible dependent were set at $10,320, and the age amount was set at $6,408. The following table provides the changes to the Yukon tax credit amounts effective April 1, 2009.
| Current amount | Retroactive amount effective January 1, 2009 | Prorated amount effective April 1, 2009 | |
|---|---|---|---|
| Basic personal amount | $10,100 | $10,320 | $10,375 |
| Age amount | maximum of $5,408 | maximum of $6,408 | maximum of $6,658 |
| Spouse or common-law partner amount | maximum of $10,100 | maximum of $10,320 | maximum of $10,375 |
| Amount for an eligible dependent | maximum of $10,100 | maximum of $10,320 | maximum of $10,375 |
The "Yukon Personal Tax Credits Return" (TD1YT) form will be revised to include these changes.
4. PROCEDURES/INSTRUCTIONS
4.1. All Public Works and Government Services Canada (PWGSC) pay and pension systems will be programmed to automatically reflect the new federal and Yukon tax bracket changes for payments dated on or after April 1, 2009.
All PWGSC pay and pension systems will be programmed to automatically reflect the new federal and Yukon basic personal amounts and spouse or common-law partner amounts.
Employees who wish to change any of their personal tax credit amounts at source that are not automatically programmed, as mentioned herein, must complete a federal and/or Yukon TD1 form. These forms are available at District Taxation Offices or on the Internet at the following address:
- Federal, territorial and provincial (other than Quebec) TD1 forms TD-e
5. INQUIRIES
5.1. Any inquiries on the information contained in this document should be addressed to your PWGSC Compensation Services Office.
Original Signed by
B. Fortin
Brigitte Fortin
Director General
Compensation Sector
Accounting, Banking and Compensation
Reference(s): CJA 9007-11-15 and 9007-11-1
- Date modified: