15-33% CRA Tax Changes May Have an Impact on Daily Life in Canada: Here’s How and When. The Canada Revenue Agency (CRA) has rolled out a bunch of updates and new initiatives for the 2024 tax year you will want to know before filing your return this year. Additionally, Narcity spoke with Gerry Vittoratos, the national tax specialist at UFile, to break down a few of these key changes and how Canadians can make the most of them on their tax return.
15-33% CRA Tax Changes May Have an Impact on Daily Life in Canada
As the tax season draws near in 2025, Canadians are preparing for a series of significant changes that could significantly affect their tax returns. From new tax brackets to enhancements in benefits and penalties for non-compliance, the Canada Revenue Agency (CRA) has rolled out a series of updates that every taxpayer needs to know.
New Tax Brackets
Here’s how it shakes out:
- 15% on the first $55,867 of taxable income.
- 20.5% on income from $55,868 to $111,733.
- 26% from $111,734 to $173,205.
- 29% from $173,206 to $246,752.
- 33% on income over $246,752
The basic personal amount has also been seen to have changes allowing tax-free income up to:
- 15,705 for those earning up to $173,205.
- $14,156 for incomes of $246,752 or more, with gradual adjustments for incomes in between.
Capital Gain Inclusion Rate Increase
A major shift in 2024 is the increase of the capital gains inclusion rate from 50% to 66.7% for gains exceeding $250,000. This adjustment affects how much of your profit from the sales, like real estate or stocks, is taxed. Despite the lack of royal assent due to Parliament’s prorogation, the CRA is moving forward with these changes, with new forms available by January 31, 2024.
Who will benefit from the tax cut?
According to the Department of Finance, nearly 22 million Canadians will benefit from the reduction in rates. Two-income families might save USD 840 per year by 2026. The Canada Revenue Agency (CRA) will modify its tables for tax deductions so that employees will notice lower withholdings in their paycheques starting in July 2025. Those who do not notice changes right away will reap the benefits when they file their 2025 tax returns in spring 2026.
key points of Taxpayers
- Tax rate reduced: The lowest personal income tax rate drops from 15% to 14%, effective July 1, 2025.
- Tax rate for 2025: Since the cut starts mid-year, the average rate for 2025 will be 14.5%.
- Benefit amount: Two-income households could save up to USD 840 per year by 2026.
- Who qualifies: The relief targets people earning under USD 114,750, especially those earning below USD 57,375 in 2025.
- Who will benefit: About 22 million Canadians are expected to benefit.
- CRA changes: Tax withholdings on pay cheques will be reduced starting July 1, 2025, to reflect the new rate.
Total relief: The plan is expected to provide USD 27 billion in tax savings over five years.
When CRA Tax Changes
The CRA has extended the deadline for charitable donations to February 28, 2025, allowing contributions made in the first two months of this year to be applied to last year’s taxes. Normally, only donations made within the calendar year are eligible, so this gives anyone looking to maximise their credits a bit more time. Once legisted, the lowest marginal personal income tax rate will be reduced.
Last month, Canadians called for a serious plan for change to address the rising cost of living that has eroded Canadians, quality of life. Changes that put more money in the pockets of Canadians.
Once legislated, the lowest marginal personal income tax rate will be reduced from 15% to 14% effective July 1, 2025. This tax cut will help hard-working Canadians keep more of their paycheques to spend where it matters most.
The government of canada sets the federal income tax rates for individuals. Each province and territory determines their own income tax rates.
Conclusion
In this article we discussed the 15-33% CRA tax changes that may have an impact on daily life in Canada: here’s how and when. The CRA has extended the deadline for charitable donations to February 28, 2025, allowing contributions made in the first two months of this year to be applied to last year’s taxes.
FAQs
1. What are the new tax changes in Canada?
The rebate u/s 87A for taxpayers filing tax returns under the New Tax Regime was increased to from Rs. 25,000 to Rs. 60,000
2. What is the CRA problem with days?
Duplicate tax slips appearing in online accounts and error codes preventing electronic submissions,