Ontario to expand access to small-business tax rate, increase disability and senior payments

Ontario to expand access to small-business tax rate, increase disability and senior payments

Click the link above to read the full article. The article was published on November 14, 2022 and written by Rudy Mezzetta at Investment Executive.

A quick and timely update for small business owners, and people that receive disability and/or senior payments from the government. See below for a few highlights.

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Small Business Owners: 

Ontario’s Conservative government proposed increasing the level of taxable capital at which a business can still access the small business rate (a provincial rate of 3.2% on the first $500,000 of taxable income, versus the general corporate rate of 11.5%). Under current rules, access to the small business rate is proportionally reduced when a business has taxable capital of between $10 million and $15 million. Under the proposal, access to the rate would phase out more gradually between $10 million and $50 million.

...the proposed change would allow more medium-sized small businesses to access the small business deduction (SBD) and increase the amount of active business income that would be eligible for the SBD.

“The increased threshold will be a much-needed incentive for small businesses,” said Armando Minicucci, a tax partner with Grant Thornton LLP in Toronto, in an email. “The increased funding will support growth and investment in people and equipment. Often, a business’s significant debt load results in a grind to the small business deduction, yet they are the businesses that need it the most.”

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ODSP recipients: 

The government seeks to increase the monthly earnings exemption for people on ODSP from $200 to $1,000 per month. Above that amount, people on ODSP could keep 25 cents on the dollar. It could encourage up to 25,000 more people to participate in the workforce, the government said.

In the budget earlier this year, the government increased ODSP rates by 5% and promised to index future increases to inflation, but advocates have said the amounts still leave people unable to pay for basic needs.

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Seniors: 

For low-income seniors, the government proposes to double the Guaranteed Annual Income System payment for a year starting in January. The maximum payment for single seniors would be $166 per month and $332 per month for couples. The government is also indicating it is working on expanding eligibility for the payments.

The article linked and mentioned above was published on November 14, 2022 and written by written by Rudy Mezzetta at Investment Executive. Check out Rudy's articles and profile here. Visit Investment Executive to see more great investment articles here.