Tax season is just around the corner, and whether you're a seasoned pro or the thought of filing your income taxes makes you break out in a cold sweat, it's time to start planning for your 2024 tax return.
The Canada Revenue Agency (CRA) has rolled out a bunch of updates and new initiatives for the 2024 tax year that you'll want to know before filing your return this year. Plus, 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.
From new income levels for Canada's tax brackets to capital gains tax updates and even changes to federal benefits like the Canada Carbon Rebate, there are some key things to know that could impact how much you owe — or how much you'll get back.
Here's everything you need to know about what's new or different for the 2024 tax season.
Important dates & deadlines
Mark your calendars — tax season officially kicks off on Monday, February 24, when the Canada Revenue Agency's NETFILE service opens for online filing. After that, key dates come fast:
- Friday, February 28: This is the last day for employers and banks to send out T4, T4A and T5 slips. If you're still missing these forms after this date, you'll want to follow up.
- Friday, February 28: This is also the extended deadline to make charitable donations for the 2024 tax year. If you make an eligible donation by this date, you can claim it on your 2024 tax return for a potential tax credit. (More on this below.)
- Monday, March 3: The deadline to contribute to an RRSP for the 2024 tax year. Making a contribution before this date could lower your taxable income for 2024 and save you some cash or get you a bigger refund.
- Wednesday, April 30: This is the big one — the tax filing deadline for most Canadians. File on time to avoid penalties if you owe money.
- Monday, June 16: Self-employed Canadians have until this date to file, but remember: any balance owing is still due by April 30, so don't wait too long to crunch those numbers!
New tax brackets & basic personal amount
Each year, the CRA adjusts personal income tax brackets and credits to account for inflation — and the indexation rate for 2024 was 4.7%. Here's how the federal tax brackets break down:
- 15% on taxable income of $55,867 or less
- 20.5% on income over $55,867 up to $111,733
- 26% on income over $111,733 up to $173,205
- 29% on income over $173,205 up to $246,752
- 33% on income over $246,752
The basic personal amount (BPA), which is the income you can earn tax-free, has also been adjusted for 2024:
- $15,705 if you earn $173,205 or less
- $14,156 if you earn $246,752 or more
- If your income falls in between, your BPA will be adjusted gradually.
Capital gains inclusion rate increase
Big changes were proposed for capital gains in 2024, especially for those earning significant profits. As of June 25, the inclusion rate — the portion of capital gains that's taxable — increased from one-half to two-thirds for gains over a certain threshold.
"For any capital gains made above $250,000 on or after June 25, 2024, the amount of the gain that has to be included as income on your tax return (referred to as the inclusion rate) increases from one-half to two-thirds of the gain," tax specialist Gerry Vittoratos explained.
This means a larger portion of profits from selling things like land, buildings, shares and bonds became subject to income tax. For gains of $250,000 or less, the effective inclusion rate remains at 50%. Additional updates included an increased lifetime capital gains exemption and new deductions for qualifying business transfers.
Although Parliament is prorogued and the legislation hasn't received royal assent yet, the CRA has confirmed that it will be proceeding with the proposed changes and that the new forms needed for filing under the updated rules will be available by January 31.
Canada Carbon Rebate eligibility expansion
In 2024, the Climate Action Incentive Payment got a new name: the Canada Carbon Rebate (CCR). Along with the rebrand came some key updates — especially for Canadians living in smaller communities and rural areas, who saw the rural supplement increase from 10% to 20% of the base amount. Eligibility rules for the rural supplement also reverted to using 2016 census data, allowing some who were previously excluded under 2021 census data to qualify again.
And there's more to come: Starting in April 2025, the feds have proposed to expand eligibility to include people living in census rural areas or small population centres (under 30,000 people) within census metropolitan areas. This change, based on your 2024 tax return, would bring the 20% rural top-up to 1.6 million additional Canadians.
Charitable donations deadline extension
If you're still feeling generous after the holidays, you've got extra time to make it count for your 2024 tax return. 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 maximize their credits a bit more time.
"This is a nice initiative to allow people who didn't have the funds by the end of the calendar year to catch up and claim the donations until the end of February for their 2024 tax return," Vittoratos told Narcity. "Considering all donations above $200 benefit for an accelerated credit, this gives everybody a chance to really increase their donations credit substantially."
Although this change hasn't yet been passed into law, the CRA has confirmed it will honour the extension, and you should still be able to get the necessary official donation receipts from registered charities and other qualified donees.
Home Buyers' Plan updates
Big news for first-time homebuyers: The withdrawal limit for the Home Buyers' Plan (HBP) has increased from $35,000 to $60,000 for withdrawals made after April 16, 2024. This means eligible Canadians can now pull even more from their RRSPs to put toward a down payment on their first home.
The government has also introduced a temporary deferral of the first repayment. Normally, participants begin repaying their HBP withdrawal two years after they make it, over a 15-year period. However, for withdrawals made between January 1, 2022, and December 31, 2025, the repayment period starts five years after the withdrawal instead of two.
"This is also a welcome change because it allows people more time to gather the funds to start their repayment," Vittoratos explained.
"Also, the increased limit can represent a powerful tool to allow people to make a substantial downpayment to purchase their first home, especially considering you can combine the Home Buyers' Plan with the First Home Saving Account announced in the previous year."
CPP & QPP enhancement
If you're contributing to the Canada Pension Plan (CPP) or Quebec Pension Plan (QPP), there are some updates for 2024 that could mean higher benefits in the future, as part of the CPP enhancement plan that began in 2019.
In 2024, a new "second additional contribution" of 4% now applies to earnings between $68,500 and $73,200. Employers and employees each contribute 4%, while self-employed individuals pay the full 8%. This enhancement is part of a phased plan to boost benefits, ensuring better financial security for future retirees.
Also starting in 2024, workers in Quebec aged 65 and older who already receive QPP or CPP benefits can choose to stop contributing to the QPP. Plus, contributions will end entirely for workers in the year you turn 73.
Short-term rentals
Starting January 1, 2024, the feds have introduced stricter rules for short-term rental operators.
"The federal government will deny income tax deductions for expenses incurred to earn short-term rental income (Airbnb, Vrbo etc..), including interest expenses, in provinces and municipalities that have prohibited short-term rentals," explained Vittoratos. "This rule is also applicable for short-term rental operators who are not compliant with the applicable provincial or municipal licensing, permitting or registration requirements."
This means properties in areas where short-term rentals are prohibited or those failing to meet local requirements could have to pay more tax on their rental income.
For 2024, there's a transitional exception: As long as your property became fully compliant by December 31, 2024, you can claim expenses for the entire year. However, starting in 2025, the CRA will strictly apply the new rules, calculating deductions based on the number of days the rental is non-compliant.
Digital platform sellers
If you make money through digital platforms like gig work or shared rentals, there's a new reporting rule to know about for 2024. Platform operators — like Uber, Skip, Crowdsource and others — are now required to collect and report income information for sellers to the federal government. If you're a reportable seller, you'll receive an annual statement from your platform operator by January 31, 2025, to help you file your taxes.
Volunteer firefighter & search and rescue credit
If you're a volunteer firefighter or search and rescue volunteer, your tax credit just got a boost. For 2024, the Volunteer Firefighters' Amount (VFA) and Search and Rescue Volunteers' Amount (SRVA) have both doubled from $3,000 to $6,000 for those who perform at least 200 hours of eligible volunteer service during the year.
Eligible hours include responding to emergencies, attending training sessions and participating in meetings related to firefighting or search and rescue operations. You can combine hours from both activities to meet the 200-hour threshold but can only claim one credit.
