Budget 2025 Updates
T4As For Services in the Trucking Industry
All businesses are generally required to report fees paid to other businesses for services provided. Payments that exceed $500 in a calendar year must be reported on a T4A slip. While these slips are technically required, CRA has had a longstanding policy of not assessing penalties for failure to report fees for service in a T4A.
CRA is lifting the moratorium on the penalties and interest of non compliance, particularly for those businesses that could be considered personal service businesses (PSBs) and for businesses in the trucking sector to ensure the accurate reporting of fees for services.
Underused Housing Tax
Budget 2025 proposes to eliminate the Underused Housing Tax (UHT) starting for the 2025 calendar year. As a result, there will be no return filing requirements or taxes payable for 2025 and future years.
Bare Trusts
Budget 2025 announced the government’s intention to defer the application date for bare trust reporting so that T3 Trust returns do not need to be filed for the 2025 calendar year. T3 returns, including Schedule 15s, will be required to be filed for taxation years ending on or after December 31, 2026, except for bare trusts that:
have been in existence for less than 3 months at the end of the calendar year and
has assets with a total fair market value that does not exceed $50,000 throughout the year and are:
money (other than gold and silver coins and bars) or
a share or debt obligation on a designated stock exchange, a mutual fund interest, or a segregated fund interest.
Automated Filing of Individual Tax Returns
As previously announced, the Budget proposes to amend the Income Tax Act to grant the CRA the discretionary authority to file a tax return, effective for the 2025 T1 personal tax returns, on behalf of an individual (other than a trust) who meets certain criteria.
Very generally, this measure is proposed to apply to individuals with taxable income below either the federal or provincial basic personal amount, and all income for the taxation year is included in information returns filed with CRA. The Budget includes various details regarding required contact with the individual, providing an opportunity to review and submit changes to CRA and confirm certain basic information.
Immediate Expensing for Manufacturing and Processing Buildings
The budget proposes to provide temporary immediate expensing for the cost of eligible manufacturing or processing buildings, including the cost of eligible additions or alterations made to such buildings. The enhanced allowance would provide a 100-percent deduction in the first taxation year that eligible property is used for manufacturing or processing, provided the minimum 90-percent floor space requirement is met.