Summary 2015 New Year’s Tax Cut:
• The biggest tax changes for 2015 are from the changes to the Universal Child Care Benefit (UCCB). They lower the taxes for all families with children under eighteen.
• There are also big tax savings for families from the Family Tax Cut that will be implemented retroactively for the 2014 tax year.
• There is very little change to the Canadian Pension Plan and Employment Insurance payroll taxes. The rates for both stay the same, but the income thresholds are increasing.
• Employees and employers pay equal CPP taxes, but EI has a higher tax rate for employers. The employer’s share of EI and CPP taxes has been relatively constant at a little less than 53% since 2006.
The new 2015 federal government’s Family Tax Cut and changes to the Universal Child Care Benefit will help families with the bottom line. The savings will range from a few hundred dollars to more than $2,500.
For example, a two-parent, two-child, one-income family earning about $60,000 will save about $1,600 in their federal income taxes as a result of the changes that the federal government has promised.
A similar family earning $80,000 annually is expected to save about $2,476.
Single income families get the biggest tax cut from the Family Tax Cut.
Families with a high income earner and a lower income earner benefit less from the Family Tax Cut than single income earner families. However the savings are still substantial. There are no FTC tax savings at the very low income levels because the low income spouse is generally not paying any income tax because of their personal basic exemption and other low income tax credits.