Tax Credits 101: Starting Out

Reprint from Langley Times Wednesday August 12, 2009 B6

There is still a lot of confusion around the eligibility for the Federal Home Renovation Tax Credit.  At this time, the credit has not been legislated in the Income Tax Act, nor has draft legislation been released, but  some information is available on the Federal website.  A recap of eligible and ineligible expenses are listed below.

Canadian Homeowners can claim a 15% non-refundable tax credit for the eligible expenditures exceeding $1000, but not more than $10,000 which works out to a maximum credit of $1,350 which can be claimed on 2009 tax returns.

ELIGIBLE EXPENSES:

• Windows/Doors
• Flooring
• Furnace, boiler, woodstove, fireplace, water heater, oil tank
• Ventilation systems
• Central Air
• Reverse osmosis systems
• septic system
• well upgrades
• electrical wiring
• security systems
• solar systems
• painting
• building of additions, sheds, garages, decks
• roofing
• driveway resurfacing
• exterior shutters/awnings
• permanent installation of pools or hot tubs
• pool resurfacing
• solar heaters/heat pumps for pools
• landscaping – sod, perennials, trees, rock, lighting, water features, retaining walls
• interior fixtures – blinds, shades, shutters, lighting, fans
• kitchen, bathroom, basement renovation
• labor expenses for all of the above

INELIGIBLE EXPENSES

• furniture, appliances, AV
• tools
• cleaning/maintenance
• maintenance contracts
• financing costs

In order to be eligible for the tax credit, the work must be completed between January 27th, 2009 and February 1, 2010 and claimed on your 2009 tax return.  For more information visit the CRA website at http://www.cra-arc.gc.ca