The 2023 federal budget proposes changes in the deduction for tradespersons tools. Here are the facts:
- The proposed change included doubling the maximum employment deduction for tradesperson’s tools from $500 to $1,000.
- The new maximum deduction would be in effect for the 2023 tax year.
- Under the current rules, a tradesperson can claim a deduction of up to $500 of the amount by which the total cost of eligible new tools acquired in a taxation year as a condition of employment exceeds the amount of the Canada Employment Credit.
- The total cost of eligible new tools cannot exceed the total of the employment income earned as a tradesperson and any apprenticeship grants received to acquire the tools, which are required to be included in income.
[At the time of writing this article, the budget had not yet received Royal assent.]
(Source: CEIRP’s law firm, Koskie Minsky)