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PIN Ontario Canada is withholding income tax!!!!! Outrage is rising!!!!
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Income tax changes eliminate refunds for many Ontario residents
Ontario residents with low to moderate incomes may get a nasty surprise when filing their 2011 tax returns.
Their refunds are disappearing, thanks to a low-key provincial decision to stop giving lump sum tax credit payments once a year.
Instead, it has combined several tax credits into the Ontario Trillium Benefit. This will be paid monthly, starting in July, to those who receive relief for energy costs, rent, sales tax and property tax.
The government made the move after consulting welfare experts, who said a monthly benefit would provide a steady income flow to pay bills.
But that’s no consolation to people who expected to get a lump sum refund. They’re furious to get a promise of monthly payments later this year instead of a windfall at tax time.
Bill Worden, a senior, just did his tax return and found he owed $123.
“I was counting on the provincial tax credits to pay some bills,” he said. “We’re told nothing. Why do I have to pay when I should be getting a refund?”
Janice Meighan wrote a letter to the editor, saying she resented seeing the government tell her how to budget her finances.
“Taxpayers need to be outraged at this intrusion by the Conservatives,” she wrote, assuming (mistakenly) the Harper government made the change.
I also heard from a self-employed dog walker, who earned $14,500 in 2011, and can’t use her Ontario tax credits to offset what she owes in federal tax.
“She’ll have to send $350 to the federal government to get a $400 tax rebate (in the end) from the Ontario government,” her mother said. “But how is she supposed to get that $350 to send in the first place?”
It’s ironic to see a government plan aimed at helping people to budget creating new cash flow problems for some taxpayers
“Seniors, in particular, aren’t crazy about it,” Finance Minister Dwight Duncan said in an interview. “They like getting the money once a year.”
“We’re looking at ways of allowing people to choose. There are some administrative issues, but it seems perfectly reasonable to me.”
Under the current system, the province holds onto people’s money until the end of the year, he said. And under the new system, payments flow to them on a monthly basis.
Some low-income people file their taxes early in November or December, going to tax preparation firms that pay them advances on their refunds (for a 15 per cent fee).
They use the refunds to buy Christmas gifts or pay for holiday expenses, said Cleo Hamel, a senior tax analyst with H&R Block Canada.
“Low income people are accustomed to receiving these benefits at tax time. This is a huge change. Many are very confused and ask us, ‘How come you’re not giving me this money?’
“They may be facing a tax bill and a long wait until they get the benefit from the Ontario government in July.”
In the budget handed down last March, the Ontario government said the change was designed to “better align the timing of the assistance with the expenses that people face.”
To smooth the transition, it would pay 2011 tax credits to qualified taxpayers in two instalments last year (July and December) and two more instalments in March and June of this year.
As a result, low-income people would receive their tax credit payments earlier than they would have if the schedule had not been changed.
The advance payments seem to have made little impact. Many taxpayers and tax preparers were caught unaware of the change, judging from the feedback I’ve received.
The government should have run a mass media publicity campaign to let people know what was coming. Instead, it’s dodging an outcry from those who feel let down.
Ellen Roseman writes about personal finance and consumer issues. You can reach her at [email protected]. [link to www.thestar.com]
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