On March 12, 2018, Manitoba Finance Minister Cameron Friesen tabled the province’s fiscal 2018-2019 budget. The budget contains some factors that have potential implications for both individuals and corporations. It is important that you and your accounting and legal professionals are aware of these factors, so be sure to ask them about it.
Measures for Incorporated Business Owners & Professionals:
No changes were made to the Manitoba corporate tax structure. Therefore, the rates for 2018 are as follows:
However, there are three other measures that may potentially affect small business:
Small Business Deduction
In previous years the small business deduction was $450,000 of net profitability, but as of January 1, 2019, that limit will be increased to $500,000. Corporations that qualify for the small business deduction pay a 0% rate of Manitoba corporation income tax. The $50,000 increase in small business deduction represents a potential $6,000 in possible Manitoba tax savings if your business qualifies. For more information to see if your business qualifies, click here.
Small Business Venture Capital Tax Credit
Effective March 12, 2018, access to the 45% investment tax credit was enhanced by the elimination of the existing $15M revenue cap on the size of an eligible issuer corporation, and the minimum amount of investment was lowered from $20,000 to $10,000.
Amendments will be made to allow chiropractors to provide their professional services through a corporation.
Measures for Individuals:
There were no changes made to personal income tax rates. Therefore, the following is a summary of the 2018 Manitoba personal tax rates as well as the combined federal & provincial marginal tax rates for 2018, courtesy of the tax & Estate Planning 2018 Tax Facts Guide.
Combined 2018 Federal / Manitoba Marginal Tax Rates
Basic Personal Amount
Effective for the 2019 tax year, the basic personal amount will be increased from $9,382 to $10,392, and for the 2020 tax year, it will be increased from $10,392 to $11,402.
Primary Caregiver Tax Credit
Effective as of the budget date, the process for claiming the Primary Caregiver Tax Credit will be simplified through the removal of the complicated paperwork. It will instead require eligible caregivers to complete a registration form, submit a copy of the form to Manitoba Finance and claim the credit on their income tax return. All previous Manitoba Health or Families applications from January 1, 2018, to the budget date will be forwarded to Manitoba Finance for processing.
Further streamlining measures will be imposed through implementing a flat $1,400 annual credit, available to all eligible caregivers with no change to the minimum 90-day requirement of care before eligibility commences.
Other Notable Measures:
- The budget eliminates the labour-sponsored-fund tax credit effective for shares acquired after 2018.
- The Manitoba Book Publishing Tax Credit has been extended to 31 December 2019.
- The Cultural Industries Printing Tax Credit has been extended to 31 December 2019.
- Effective for 2019, the calculation of the Education Property Tax Credit will be based on school taxes with the $250 deductible being eliminated. The Seniors’ Education Property Tax Credit would also be calculated on the school tax portion.
For more information visit https://www.gov.mb.ca/budget2018/index.html or call to make an appointment for us to review your income tax situation.
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