As a result of the Feb. 16, 1999, federal budget the following tax changes are effective July 1, 1999:

1. The basic personal amount is increased from $6,456 to $6,793.50 for 1999.

2. The maximum for the spousal or equivalent-to-spouse amount is increased from $5,380 to $5,717.50 for 1999.

3. The personal amount supplement is reduced to half of the previously allowable amount for 1999. Since half of the credit has already been allowed for payroll purposes, the personal amount supplement is nil for the period July 1 to Dec. 31, 1999.

4. The three per cent federal surtax is reduced by half for 1999. This means that by the end of June 1999, all employees will have paid the total three per cent surtax required for the year. Effective July 1, 1999, the three per cent surtax will be nil for the remainder of the year. It is also nil for the year 2000.

The three per cent surtax was previously eliminated or reduced for many ranges of income, so many employees will not have any tax change as a result of this revision.

The five per cent federal surtax, which applies to basic federal tax over $12,500, is not changed.

To prevent a complete revision and re-filing of Form TD1, Personal Tax Credits Return, by employees, Revenue Canada has requested that employers automatically adjust the basic personal amounts for all employees, except those employees who have claim code 0 (no personal amounts claimed).

If an employee wishes to change the spousal or equivalent-to-spouse amount, the employee should complete Form TD1A, Amendment to the Personal Tax Credits Return. Furthermore, since the personal amount supplement is eliminated effective July 1, 1999, any employee or pensioner who claimed that amount in January 1999 should complete Form TD1A to delete that claim amount.

Form TD1A is available on the Internet at Revenue Canada’s Web site: www.rc.gc.ca, or call 737-7410 for a copy. You may wish to log on to the Canadian Payroll Association’s Web site to read further explanation of the tax change.

These changes will be implemented on the payroll for July 15, 1999, and for the July pensioners payment.