BILL 21
An Act to Amend the New Brunswick Income Tax Act
Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:
1 The New Brunswick Income Tax Act, chapter N-6.001 of the Acts of New Brunswick, 2000, is amended by adding after section 27 the following:
Tuition tax credit
27.1 Section 118.5 of the Federal Act applies for the purposes of this Act, except that any reference to “appropriate percentage” in that section is to be read as a reference to “appropriate percentage” as defined in section 13.
Unused tuition tax credits
27.2( 1) For the purpose of computing an individual’s tax payable under this Part for a taxation year, there may be deducted the lesser of
athe individual’s unused tuition tax credits at the end of the preceding taxation year, and
bthe amount that would be the individual’s tax payable under this Part for the year if no amount were deductible under this Part, other than an amount deductible under this section and any of sections 17 to 24, 27 and 32.
27.2( 2) The amount of an individual’s unused tuition tax credits at the end of the 2018 taxation year is the amount determined by the formula
A + B + C
where
A is the amount of tuition tax credits that would have been deductible under section 27.1 by the individual in computing the individual’s tax payable under this Part for the 2017 taxation year if section 27.1 had been in force for the 2017 taxation year,
B is the amount of tuition tax credits that would have been deductible under section 27.1 by the individual in computing the individual’s tax payable under this Part for the 2018 taxation year if section 27.1 had been in force for the 2018 taxation year, and
C is the amount of the individual’s tuition tax credits that remains unused at the end of the 2018 taxation year.
27.2( 3) Subject to subsection (4), the amount of an individual’s unused tuition tax credits at the end of the 2019 taxation year or a subsequent taxation year is the amount determined by the formula
A + (B – C) – (D + E)
where
A is the amount of the individual’s unused tuition tax credits at the end of the preceding taxation year,
B is the total of all amounts each of which may be deducted under section 27.1 in computing the individual’s tax payable under this Part for the year,
C is the lesser of the value of B and the amount that would be the individual’s tax payable under this Part for the year if no amount were deductible under this Part, other than an amount deductible under this section and any of sections 17 to 24, 27 and 32,
D is the amount that the individual may deduct under subsection (1) for the year, and
E is the amount of the tuition tax credits transferred for the year by the individual to the individual’s spouse, common-law partner, parent or grandparent.
27.2( 4) If an individual was not resident in New Brunswick on the last day of the preceding taxation year, the amount of the individual’s unused tuition tax credits at the end of the preceding taxation year is equal to the amount that would be the individual’s unused tuition tax credits at the end of the preceding taxation year as determined under section 118.61 of the Federal Act if the percentage applied under section 118.5 of the Federal Act had been the appropriate percentage for the year as defined in section 13 instead of the appropriate percentage as defined in the Federal Act.
27.2( 5) For the purposes of subsection (4), the amounts that are determined under the Federal Act shall be used only to the extent that they have not been used in claiming a credit under section 118.5 or 118.61 of the Federal Act, or in determining credits transferred under section 118.81 of the Federal Act, for any taxation year.
2 The heading “Unused tuition and education credits” preceding section 30 of the Act is repealed and the following is substituted:
Unused education credits
3 Section 30 of the Act is amended
ain subsection (1)
( i) in paragraph (a) by striking out “tuition and”;
( ii) in paragraph (b) by striking out “tuition and”;
bin subsection (2) by striking out “118.5,”;
cin paragraph (3)(a) by striking out “tuition and”;
din subsection (4) by striking out “tuition and” wherever it appears;
ein subsection (5)
( i) by striking out “tuition and” wherever it appears;
( ii) by striking out “sections 118.5 and 118.6” wherever it appears and substituting “section 118.6”.
4 The Act is amended by adding after section 32 the following:
Transfer of tuition tax credits
32.1( 1) For the purpose of computing the tax payable under this Part for a taxation year by an individual who, at any time in the year, is a married person or a person who is in a common-law partnership, other than an individual who, by reason of a breakdown of their marriage or common-law partnership, is living separate and apart from the individual’s spouse or common-law partner at the end of the year and for a period of 90 days commencing in the year, there may be deducted an amount determined by the formula
A – B
where
A is the amount of the tuition tax credits transferred for the year by the spouse or common-law partner to the individual, and
B is the amount, if any, by which
a)the amount that would be the spouse’s or common-law partner’s tax payable under this Part for the year, or that would be so payable if the spouse or common-law partner were liable under section 11 to pay tax for the year, if no amount were deductible under this Part, other than an amount deductible under section 19, 27.2, 30 or 32,
exceeds
b)the lesser of
( i) the total of all amounts that may be deducted under section 27.1 in computing the spouse’s or common-law partner’s tax payable under this Part for the year, or that would be so deductible if the spouse or common-law partner were liable under section 11 to pay tax for the year, and
( ii) the amount that would be the spouse’s or common-law partner’s tax payable under this Part for the year, or that would be so payable if the spouse or common-law partner were liable under section 11 to pay tax for the year, if no amount were deductible under this Part, other than an amount deductible under any of sections 17 to 24, 27, 27.2, 30 and 32.
32.1( 2) In subsection (1), the amount of the tuition tax credits transferred for a taxation year by the spouse or common-law partner of an individual to the individual is the lesser of
athe amount determined by the formula
A – B
where
A is the lesser of
( i) the total of all amounts that may be deducted under section 27.1 in computing the spouse’s or common-law partner’s tax payable under this Part for the year, or that would be so deductible if the spouse or common-law partner were liable under section 11 to pay tax for the year, and
( ii) the amount obtained by multiplying $5,000 by the appropriate percentage for the year, and
B is the amount that would be the spouse’s or common-law partner’s tax payable under this Part for the year, or that would be so payable if the spouse or common-law partner were liable under section 11 to pay tax for the year, if no amount were deductible under this Part, other than an amount deductible under any of sections 17 to 24, 27, 27.2, 30 and 32, and
bthe amount for the year that the spouse or common-law partner designates in writing for the purpose of subsection (1).
32.1( 3) If for a taxation year a parent or grandparent of an individual, other than an individual in respect of whom the individual’s spouse or common-law partner deducts an amount for the year under subsection (1) or section 17 of this Act, section 118 or 118.8 of the Federal Act or similar provisions of an income tax statute of another province, is the only person designated in writing by the individual for the year for the purpose of this subsection, and no other person is designated in writing by the individual for the year for the purpose of section 118.9 of the Federal Act or a similar provision of an income tax statute of another province, there may be deducted in computing the tax payable under this Part for the year by the parent or grandparent so designated the tuition tax credits transferred for the year by the individual to that parent or grandparent.
32.1( 4) In subsection (3), the amount of the tuition tax credits transferred for a taxation year by an individual to a parent or grandparent of the individual is the lesser of
athe amount determined by the formula
A – B
where
A is the lesser of
( i) the total of all amounts that may be deducted under section 27.1 in computing the individual’s tax payable under this Part for the year, or that would be so deductible if the individual were liable under section 11 to pay tax for the year, and
( ii) the amount obtained by multiplying $5,000 by the appropriate percentage for the year, and
B is the amount that would be the individual’s tax payable under this Part for the year, or that would be so payable if the individual were liable under section 11 to pay tax for the year, if no amount were deductible under this Part, other than an amount deductible under any of sections 17 to 24, 27, 27.2, 30 and 32, and
bthe amount for the year that the individual designates in writing for the purpose of subsection (3).
5 Section 38 of the Act is amended by striking out “30” and substituting “30, 27.2, 27.1, subsection 32.1(2), subsection 32.1(1) and sections”.
Commencement
6 This Act shall be deemed to have come into force on January 1, 2019.