Bill 25 updates The Income Tax Act, 2000 to alter how Saskatchewan treats the province’s one‑time fertility treatment tax credit. The Act inserts new administrative rules about how that credit is treated on provincial returns, and adjusts cross‑references in the statute.
Why it matters: the amendments create specific mechanics that affect claim timing, how the credit is treated for tax‑payment and insolvency purposes, and how multiple returns filed under federal rules interact with the provincial credit. That combination changes tax‑filing calculations, exposes the province to retroactive claims back to January 1, 2025, and requires administrative changes for software, practitioners and the Ministry of Finance.
At a Glance
What It Does
The Act amends s.39.5 of the provincial Income Tax Act to align the provincial fertility‑treatment credit with the federal definition and to set administrative rules governing claims, including the allowable 12‑month expense period and new deeming, death, separate‑returns and bankruptcy provisions.
Who It Affects
Individuals who paid fertility treatment expenses and their cohabiting spouses, provincial tax filers and preparers, trustees in bankruptcy and the Saskatchewan Ministry of Finance (tax administration and IT systems).
Why It Matters
The combination of retroactivity and tighter administrative mechanics changes filing outcomes, increases the risk of reassessments and overpayments, and obliges government and tax‑service vendors to change intake, validation and processing rules for 2025 returns.
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What This Bill Actually Does
Beyond changing eligibility language, the Act adds four concrete administrative rules to the provincial regime. One subsection deems the amount of the fertility‑treatment tax credit to be an amount paid on account of the taxpayer’s provincial tax for the year; another treats a taxpayer who dies while resident as deemed resident on the last day of the taxation year.
The package also limits the total amount that can be treated as paid when a taxpayer files separate returns under specified federal provisions, and caps claims where the taxpayer becomes bankrupt in the calendar year.
Those additions are technical but consequential. Deeming the credit as an amount paid on account uses provincial accounting rules to affect balances owing, refunds and how credits interact with payments and examinations.
The separate‑returns rule explicitly prevents double counting across staggered return periods that arise when federal separate returns are filed under subsections 70(2), 104(23) or 150(4) of the federal Income Tax Act. The bankruptcy rule limits how much of the credit can be claimed when insolvency proceedings occur in the claim year.The Act also updates cross‑references in several enumerations of the Income Tax Act (removing section 39.5 from certain lists).
Finally, the amendments take effect on assent but are retroactive to January 1, 2025, meaning affected taxpayers can rely on the new text for 2025 filings and the province must accept returns consistent with the retroactive application.
The Five Things You Need to Know
The Act inserts four new subsections (numbered (10)–(13)) into s.39.5 that deal with deeming, death‑residency, separate federal returns and bankruptcy limits.
Subsection (10) deems the fertility‑treatment tax credit amount to be an amount paid by the taxpayer on account of their provincial tax payable for the taxation year.
Subsection (12) prevents total amounts deemed paid across multiple provincial returns from exceeding what could have been claimed had no separate federal returns been filed under federal ss.70(2), 104(23) or 150(4).
Subsection (13) caps how much may be claimed in a taxation year that ends in a calendar year in which the taxpayer becomes bankrupt, limiting claims that would otherwise arise during insolvency.
The Act removes references to s.39.5 from several statutory enumerations (ss.42, 44(1)(b)(i), 45 and s.50 as amended) and makes the whole Act retroactive to January 1, 2025.
Section-by-Section Breakdown
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Redraws eligibility wording and cross‑reference scope
This substitution replaces existing subsection 39.5(3) to broaden the statutory phrasing that supports claiming the fertility credit and to explicitly tie the allowable expenses to the federal Income Tax Act paragraph 118.2(2)(v). Practically, that aligns the provincial eligibility standard with the federal definition of eligible fertility expenses and creates a clearer reference point for documentation and audit.
Broadens cross‑references and changes the 12‑month period language
These edits expand internal cross‑references in s.39.5 so later added subsections are captured and change a timing phrase to allow an expense period described as “any 12‑month period ending in the taxation year.” That phrasing lets a claimant choose the relevant 12‑month span that falls within a taxation year rather than restricting claims to expenses paid only during the taxation year itself, which affects how taxpayers package receipts across tax years.
Administrative mechanics: deeming, death, separate returns and bankruptcy
This is the substantive administrative package. The deeming rule (10) makes the credit function like an amount paid on account of tax, which can alter refund calculations and offsetting against tax balances. Subsection (11) creates a clear rule for deceased residents to avoid residency disputes. Subsection (12) constrains double‑counting where separate federal returns create overlapping provincial claim periods. Subsection (13) addresses insolvency by capping claims in bankruptcy years. Together they change both taxpayer outcomes and how the province treats the credit operationally.
Removes s.39.5 from statutory enumerations
The Act strikes s.39.5 from several lists found elsewhere in the Income Tax Act. That administrative housekeeping alters which general rules or transitional provisions apply to this credit; practitioners should map which consequences flow from those particular enumerations (for example, which sections are excluded from certain offsets, deductions or regulatory delegations) because omission can be as important as inclusion.
Retroactive application to Jan. 1, 2025
The Act comes into force on assent but is explicitly retroactive and deemed to have been in force on and from January 1, 2025. That creates immediate filing implications: taxpayers and preparers should treat 2025 returns under the new rules and the province must process returns and adjustments consistent with the retroactivity.
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Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Individuals who paid eligible fertility expenses in 2025: the statutory alignment and the 12‑month period give those taxpayers clearer grounds to claim provincial relief and to time which receipts fall into a single eligible period.
- Cohabiting spouses of taxpayers who paid fertility expenses: the amendments (as reflected in the replaced cross‑reference language) permit each cohabiting spouse to claim a one‑time credit, increasing potential provincial tax relief for couples who both incur or share costs.
- Trustees in bankruptcy and insolvency practitioners: the bankruptcy cap clarifies how much of the credit can be treated in estates and avoids downstream disputes about whether credits are estate property or pre‑bankruptcy payments.
- Tax preparers and tax software vendors: the new deeming, separate‑returns and timing rules create a defined compliance path, reducing ambiguity in return preparation once systems are updated.
- Estate representatives and executors: the death‑residency rule gives a clear cut‑off for residency status on the last day of the taxation year, simplifying processing of terminal returns.
Who Bears the Cost
- Saskatchewan Ministry of Finance (tax administration): retroactive application and new processing rules will require system changes, recalculations, potential refunds and reassessments, and additional administrative cost.
- Tax software vendors and accounting firms: they must update return logic, validation checks and client advisories to reflect the 12‑month window, deeming rules and the separate‑returns cap.
- Creditors and some bankrupt estates: the bankruptcy limitation may shift recoverable value and alter distributions, requiring trustees to reassess estate calculations and creditor expectations.
- Taxpayers subject to audits or disputes: the new deeming rule and interactions with separate federal returns create scenarios for reassessment where taxpayers and the Ministry disagree about which return or which 12‑month period applies.
- Revenue forecasting and budgeting units: retroactive claims increase uncertainty in short‑term revenue projections and could require one‑time adjustments to fiscal estimates.
Key Issues
The Core Tension
The central dilemma is between expanding usable tax relief for individuals who incur fertility‑treatment costs and containing fiscal and administrative risk: giving each cohabiting person clearer access increases potential provincial outlays and administrative complexity, while the added deeming, separate‑returns and bankruptcy limits try to protect fiscal integrity but introduce new interpretive and systems burdens that will fall on the Ministry, practitioners and sometimes taxpayers.
The Act bundles a substantive eligibility alignment with a set of technical fixes that address practical problems — but it raises implementation and legal‑interpretation questions. The deeming of the credit as an amount paid on account is operationally powerful: it affects whether the credit produces an immediate refund, offsets other liabilities, or interacts with instalments and assessment adjustments.
The statute does not explicitly state whether the credit is refundable independent of the deeming rule, so administrators will need policy guidance to resolve how refunds and offsetting operate in edge cases.
Retroactivity to January 1, 2025 reduces legal uncertainty for taxpayers wanting to claim on 2025 returns but requires the province to process retroactive claims and track potential reassessments. The separate‑returns cap fixes a plausible double‑claim gap when federal separate returns create overlapping periods, but it also creates a new dispute vector: when different return periods exist, taxpayers and the Minister may disagree about which return should bear the credit.
Finally, removing s.39.5 from several statutory enumerations may have unintended knock‑on effects if practitioners assumed those enumerations provided beneficial procedural rules for the credit; absence from an enumeration can produce exclusion from otherwise applicable relief or procedural paths.
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