Tax season is right around the corner, and whether you’re a seasoned tax pro or find the process overwhelming, it’s time to start preparing for your 2024 tax return. The Canada Revenue Agency (CRA) has introduced several updates and initiatives for the 2024 tax year, and understanding these changes can help you maximize your return or minimize what you owe.
Here’s a comprehensive guide to help you navigate the 2024 tax season effectively.
Table of Contents
Important Dates & Deadlines
Mark these dates in your calendar to ensure you don’t miss any critical deadlines:
- Monday, February 24: CRA’s NETFILE service opens for online filing.
- Friday, February 28: Deadline for employers and banks to issue T4, T4A, and T5 slips. It’s also the extended deadline to make charitable donations for the 2024 tax year.
- Monday, March 3: Last day to contribute to an RRSP for the 2024 tax year to potentially lower your taxable income.
- Wednesday, April 30: Tax filing deadline for most Canadians. File on time to avoid penalties.
- Monday, June 16: Deadline for self-employed Canadians to file, though any balance owing is due by April 30.
Updates to Tax Brackets & Basic Personal Amount (BPA)
The CRA adjusts personal income tax brackets annually to account for inflation, which for 2024 was set at 4.7%. Here are the new federal tax brackets:
- 15% on taxable income up to $55,867
- 20.5% on income between $55,867 and $111,733
- 26% on income between $111,733 and $173,205
- 29% on income between $173,205 and $246,752
- 33% on income over $246,752
The Basic Personal Amount (BPA), which is the income you can earn tax-free, is:
- $15,705 if your income is $173,205 or less.
- $14,156 if your income exceeds $246,752, with gradual adjustments for incomes in between.
Capital Gains Inclusion Rate Increase
Significant changes were made to capital gains rules in 2024:
- The inclusion rate for gains above $250,000 has increased from 50% to 66.7%.
- Gains under $250,000 still have a 50% inclusion rate.
This means a larger portion of profits from selling assets like property, stocks, and bonds will now be taxable. Additionally, the lifetime capital gains exemption and deductions for qualifying business transfers have been expanded.
Canada Carbon Rebate (CCR) Eligibility Expansion
Formerly known as the Climate Action Incentive Payment, the CCR underwent key changes in 2024:
- The rural supplement for smaller communities increased from 10% to 20% of the base amount.
- Eligibility rules reverted to using 2016 census data, allowing more Canadians to qualify.
From April 2025, eligibility will expand further to include residents in census rural areas or small population centres under 30,000 people within metropolitan regions.
Charitable Donations Deadline Extension
The CRA extended the deadline for charitable donations to February 28, 2025, for the 2024 tax year. This gives taxpayers extra time to maximize their donations credit. Donations above $200 benefit from an accelerated tax credit, offering an incentive to contribute generously.
Home Buyers’ Plan (HBP) Updates
First-time homebuyers can now withdraw up to $60,000 (up from $35,000) from their RRSPs to use as a down payment. Additionally, repayment of HBP withdrawals made between 2022 and 2025 has been deferred, with repayments starting five years after the withdrawal instead of the usual two.
CPP & QPP Enhancements
Contributors to the Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) will see updates that aim to provide higher retirement benefits:
- A 4% second additional contribution applies to earnings between $68,500 and $73,200.
- Self-employed individuals will contribute the full 8%.
- Workers in Quebec aged 65+ can now choose to stop contributing to the QPP, with contributions ending entirely at age 73.
CRA’s New Rules What They Mean for Short-Term Rental Income Deductions
CRA Inflation Relief Payment: $1200 Extra OAS Deposit for Canadian Senior Citizens
CPP Vs inflation: Do CPP payments increase with inflation?
CPP & OAS Payment Increase 2024: How Much Is Increase?
$628 Grocery Rebate in Canada 2024: Your Guide to Relief from Inflation
New Rules for Short-Term Rentals
Starting January 1, 2024, stricter rules apply to short-term rental operators:
- Income tax deductions for non-compliant rentals (e.g., Airbnb or Vrbo properties) will be denied.
- Properties must comply with local licensing and registration requirements to qualify for deductions.
- Transitional exception: Properties compliant by December 31, 2024, can claim deductions for the entire year.
Reporting for Digital Platform Sellers
Gig workers and rental platform sellers will now receive income statements directly from platforms like Uber and Airbnb. Platform operators are required to report this income to the CRA, simplifying the filing process for sellers.
Volunteer Firefighter & Search and Rescue Credit
Volunteer tax credits have doubled for 2024:
- Eligible volunteers performing at least 200 hours of service can now claim a credit of $6,000 (up from $3,000).
This applies to hours spent on emergencies, training sessions, and meetings. Volunteers can combine hours across activities but can only claim one credit.
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