Tax Bracket Changes – As of January 1, 2009, the two lowest income tax brackets will be raised 7.5% above 2008 limits to $40,726 and $81,452 respectively. The basic personal amount will also be increased to $10,320 in 2009, up from $9,600 in 2008.
RRSP Home Purchase and Renovation – To encourage home ownership and home construction, the finance minister proposes to increase the amount first time homebuyers can withdraw from their RRSPs to purchase or build a home—from $20,000 to $25,000. It also proposes to establish a first time homebuyer’s tax credit which could amount to $750 worth of savings on closing costs for anyone purchasing a new home.
The second “limited time offer” being offered up in this budget is a temporary home renovation tax credit. Until January 31, 2010, this proposed measure will provide tax relief for home renovation costs of up to $1,350 for each family.
E.I. -Reduce Employment Insurance premium rates to $1.73 per $100 of insurable earnings, their lowest level since 1982.
Extend maximum EI benefits by five weeks, bringing it up to a maximum of 50 weeks. The measure would be in effect for the next two years, at a cost of $1.15 billion.
Business Owners – An increase in the amount of small business income eligible for the reduced federal tax rate of 11% – changes announced raise the current limit of $400,000 to $500,000 as of January 1.
Create a temporary 100% capital cost allowance rate for computer hardware and systems software acquired after January 27, 2009 and before February 1, 2011.
Infrastructure – The government says it would provide $12 billion in infrastructure funding over the next two years.
Environment – Clean Energy Fund to support clean energy research development and demonstration projects, including carbon capture and storage.
Deficits – Large deficits of $34-billion in the 2009-10 fiscal year and $30-billion in the 2010-11 fiscal year will quickly be reduced and then eliminated to show a small surplus of $700-million in 2013-14.
Here is a link to the accounting firm of BDO Dunwoody for a more comprehensive Budget overview: