Staying informed about Canadian personal income tax changes is essential for effective financial planning. The Canada Revenue Agency (CRA) has introduced several updates to its services and tax regulations for 2024. This guide provides an overview of key changes, from updates to the Canada Child Benefit (CCB) to new reporting rules for digital platform operators.
Highlights of the CRA's Services
New Identity Validation for CRA Sign-in Services
The CRA now offers a real-time identity validation option for registering with its sign-in services. This feature allows instant access to your online account, eliminating the waiting period for a mailed security code.
For more details, visit Register for the CRA Sign-in Services.
Updates for Individuals and Families
Alternative Minimum Tax (AMT)
Changes to the AMT calculation for 2024 include:
Higher minimum tax rate and basic exemption threshold.
Adjustments to taxable income, foreign tax credits, and carryover rules.
Limits on most non-refundable tax credits.
Refer to Form T691, Alternative Minimum Tax for additional details.
Canada Carbon Rebate (CCR)
Residents in Alberta, Manitoba, New Brunswick, Nova Scotia, Newfoundland and Labrador, Ontario, and Saskatchewan now have expanded eligibility for the CCR rural supplement. This includes individuals living in census rural areas or small population centers with fewer than 30,000 people. These updates take effect for payments starting in April 2025.
Learn more about the Canada Carbon Rebate.
Canada Child Benefit (CCB)
From 2025, the CCB will extend for six months following the death of a child, provided the recipient is eligible. The same extension applies to the child disability benefit.
For more information, visit the CRA’s Canada Child Benefit.
Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) Enhancements
Effective January 2024:
Employers and employees contribute an additional 4% on pensionable earnings exceeding the year’s maximum pensionable earnings.
Self-employed individuals contribute an additional 8%.
Workers aged 65+ receiving CPP/QPP pensions can opt out of QPP contributions.
Contributions end for workers turning 73 in the same year.
Visit the CRA’s page on Federal Income Tax and Benefits for more details.
Canadian Personal Income Tax Measures You Should Know
Capital Gains
Starting June 24, 2024:
The inclusion rate for capital gains increases to two-thirds.
Gains of $250,000 or less maintain the one-half inclusion rate.
The lifetime capital gains exemption increases, along with new provisions for reductions and deductions.
Refer to Guide T4037, Capital Gains for more information.
Home Buyers' Plan (HBP)
Withdrawal limits increase to $60,000 for withdrawals made after April 16, 2024.
Temporary repayment relief defers the 15-year repayment period by three years for withdrawals made between 2022 and 2025.
Mineral Exploration Tax Credit
Eligibility for this credit extends to flow-through share agreements made before April 2025, with expenses incurred before 2026. Visit Line 41200 – Investment Tax Credit for more details.
New Reporting Rules for Canadian Personal Income Tax
Digital Platform Operators
Starting in 2024, platform operators must report income earned by sellers in the gig and sharing economy. Sellers will receive annual information statements by January 31, 2025, to assist with tax filing.
For more details, visit Reporting Rules for Digital Platforms.
Short-term Rentals
From January 1, 2024, expenses related to non-compliant short-term rentals, including interest, are no longer deductible.
Refer to Guide T4036, Rental Income for further guidance.
Volunteer Tax Credits for Canadian Personal Income Tax
Volunteer Firefighters' and Search and Rescue Volunteers' Amounts
The credit amount increases to $6,000 for eligible individuals who perform at least 200 hours of combined volunteer service in the year.
Frequently Asked Questions (FAQ)
1. What is the Canada Carbon Rebate (CCR) rural supplement?
The CCR rural supplement provides additional payments to individuals living in rural areas or small population centers. For 2024, eligibility has expanded to include those residing in census rural areas or small centers within census metropolitan areas.
2. How do the new AMT changes affect me?
The Alternative Minimum Tax (AMT) changes introduce a higher tax rate and basic exemption threshold. Adjustments to the calculation of taxable income and limits on certain credits may result in higher AMT liabilities for some taxpayers.
3. Are there any changes to the Home Buyers' Plan (HBP)?
Yes, the withdrawal limit has increased to $60,000 for withdrawals made after April 16, 2024. Additionally, repayment relief has been introduced, deferring the start of the repayment period by three years for certain withdrawals.
4. What do the new rules for digital platform operators mean for gig economy workers?
Platform operators are required to report income earned by gig economy workers, ensuring greater transparency. Workers will receive annual information statements to assist with tax filing.
5. Can short-term rental expenses still be deducted?
Only expenses related to compliant short-term rentals can be deducted. Non-compliant rental expenses, including interest, are no longer deductible starting January 1, 2024.