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Tax-Free Savings Accounts: Leveraging the New Way to Save
One of the most interesting announcements contained in the 2008 Federal Budget was the introduction of the Tax-Free Savings Account (TFSA). Beginning in 2009, the TFSA will have a profound impact on savings patterns, as Canadians 18 and over will be able to start contributing up to $5,000 of after-tax dollars annually to these accounts. Group TFSAs may also come to form a valuable part of the total compensation package offered to employees.
What Does the METC Budget Change Mean for Employer Drug Plans?
The recent Federal Budget modified the Income Tax Act provisions governing the medical expense tax credit (METC). This change may end up having significant implications for sponsors of private health services plans. In light of the announced amendments, the question that currently has not been answered is whether these plans can continue to cover over-the-counter drugs while maintaining their tax-preferred status. The Canada Revenue Agency has yet to rule on this and plan sponsors should wait for clarity on the issue before making changes to their plans.
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