Principal Issues: If the proposed HRTC program continues for a second year, will expenditures exceeding the limit of $10,000 be allowed to be carried forward to the 2010 tax year?
Position: No.
Reasons: The legislation regarding the new HRTC has been enacted and is contained in section 118.04 of the Income Tax Act, and does not extend the HRTC for a second year. In addition, Mr. Flaherty has not announced any plans to extend the HRTC.
XXXXXXXXXX 2009-033784 A. Mahendran January 11, 2010
Dear XXXXXXXXXX :
We are responding to your correspondence, which we received on August 13, 2009, regarding the new home renovation tax credit (HRTC). We apologize for this delayed reply.
In particular, you would like to know if the HRTC program continues for a second year, will expenditures exceeding the limit of $10,000 be allowed to be carried forward to the 2010 tax year. The HRTC provides individuals with a temporary 15% non-refundable income tax credit on eligible home renovation expenditures for services received or goods acquired, after January 27, 2009, and before February 1, 2010. However, expenditures for services received or goods acquired under agreements entered into before January 28, 2009, do not qualify for the HRTC.
The legislation regarding the new HRTC has been enacted and is contained in section 118.04 of the Income Tax Act, and does not extend the HRTC for a second year. In addition, Mr. Flaherty has not announced any plans to extend the HRTC.
Thank you for communicating your concerns.
Yours truly,
Nerill Thomas-Wilkinson
Acting Manager
for Acting Director
Ontario Corporate Tax Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch