FEDERAL BUDGET 2009 highlights

Budget 2009 supports small businesses by:
· increasing the amount of small business income eligible for the reduced federal tax rate of 11% to $500,000 from the current limit of $400,000 as of January 1, 2009.
· Introducing a temporary 100% capital cost allowance rate for computers acquired after January 27, 2009 and before February 1, 2001.


For individual taxpayers:
the government will boost the basic personal amount – which would allow people to earn more before they have to pay federal tax. The basic amount would go from $9,600 to $10,320, retroactive to Jan. 1.
The government also plans to raise the upper limits on the two lowest income tax brackets. The upper limit for the 15 per cent bracket would go to $40,726, while the upper income limit for the 22 per cent bracket would rise to $81,452.

A new home renovation tax credit would give up to $1,350 in tax relief on home improvement projects. The eligible expenses must be at least $1,000, but not more than $10,000, and the work would have to be done between Jan. 27, 2009, and Feb. 1, 2010.

For Canadians hit by layoffs, the government plans to 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.