If you are a logger or resident in B.C., be sure you’re making the most of your regional tax regime. Here are some tips.
Logging Tax Credit
If you pay a provincial logging tax, you may be eligible for a federal credit. The credit is the lesser of either 6.7% of your logging income for the year, or two-thirds of the provincial logging tax paid for the year.
“What’s considered to be logging in B.C. is actually fairly broad,” says Craig Berg, accountant at Berg Lehmann in Nelson, B.C.
Be warned: The credit can’t exceed 6.7% (technically, it’s 6.6667%) of your total income, found on Line 260 of your return, minus the amounts on Lines 208, 214, 215, 219 and 220.
The claim the credit, write “Federal logging tax credit” and the total below Line 55 on Schedule 1; subtract the total credit from the amount on Line 55 and from any recapture of the investment tax credit; and enter your net federal tax from Line 64 of Schedule 1 on Line 420 of the return.
Working Income Tax Benefit
In B.C., this benefit has higher income thresholds than in other provinces. You’re eligible for this benefit if you meet all of the following criteria:
- you’re a resident of Canada for the entire year;
- you’ve not been in prison for 90 days or more in the year;
- you were not exempt from tax that year as a foreign diplomat, a foreign diplomat’s family member or tax-exempt employee;
- you were not enrolled as a full-time student at a designated educational institution for a total of more than 13 weeks in the year, unless you had an eligible dependant at the end of the year;
- you’ve earned income from employment or business; and
- you were at least 19 years old at the end of the year or live with a common-law partner, spouse or child.
A tip: If you’re eligible for the WITB as well as the Disability Tax Credit, you can claim the WITB disability supplement. In B.C., the supplement is worth up to $565.
To claim it, use the version of Schedule 6: Working Income Tax Benefit for British Columbia to calculate your benefit.
You can enter the amount on Line 42 of Schedule 6 on Line 453 of the return.
Be warned: Only one person per couple may claim the benefit. If one of you is eligible for the disability benefit, CRA says that person should be the one to claim. If both of you are eligible for the disability benefit, both of you should file Schedule 6 with your returns.