Recording of our Webinar on What’s New For Personal Tax Season 2026
Every tax season brings a few changes, and while the 2025 personal tax year doesn’t introduce as many updates as some previous years, there are still several important items taxpayers should be aware of before filing.
Below is a breakdown of the most relevant updates for the 2025 personal tax season, along with a reminder of a few key measures that remain important when preparing your return.
Important Reminder About Charitable Donations
One area taxpayers should pay special attention to this year involves charitable donations.
Due to the Canada Post strike that occurred toward the end of 2024, the CRA introduced a special rule that allowed taxpayers to claim up to 14 months of charitable donations on their 2024 tax return.
This meant taxpayers could include:
- Donations made between January and December 2024
- Donations made in January and February 2025
All of those donations could be claimed together on the 2024 tax return.
Because of that rule, taxpayers must now be careful when preparing their 2025 tax return.
If you already claimed your January and February 2025 donations on your 2024 return, you cannot claim them again this year.
That means for the 2025 tax year you would only be able to claim donations made between:
March 2025 and December 2025
In other words, only 10 months of donations may be available to claim this year, depending on how your donations were reported last year.
This is an important detail to review when gathering your receipts to avoid duplicate claims.
Lower Federal Tax Rate
One of the biggest changes this year is a reduction in the lowest federal tax rate. As of July 1, 2025, the lowest tax bracket has been reduced from 15% to 14.5%.
This change has been introduced as a middle-class tax cut. The estimated impact is:
- Approximately $420 in tax savings for individuals
- Up to $840 in tax savings for families
While this reduction may seem small, it can still have a positive impact when combined with other deductions and credits available on your return.
Temporary Top-Up Tax Credit
Because the lowest tax rate was reduced, a temporary top-up tax credit has also been introduced.
This credit is designed to ensure that taxpayers who claim significant non-refundable tax credits—such as medical expenses or tuition—do not lose the value of those credits due to the lower tax rate.
The top-up credit will apply from 2025 through 2030 and effectively restores the credit calculation rate back to 15% on eligible amounts over $57,000.
Increase to the Basic Personal Amount
The basic personal amount—the amount of income you can earn before paying federal tax—has increased again.
For the 2025 tax year, the new threshold is:
$16,129
This represents an increase of $424 from the previous year.
In simple terms, Canadians can now earn slightly more income before federal taxes begin to apply.
Tax Brackets Adjusted for Inflation
As with every year, tax brackets have been adjusted to account for inflation.
These adjustments help maintain purchasing power and prevent taxpayers from being pushed into higher tax brackets simply because of rising costs.
If your income stayed roughly the same compared to last year, these adjustments could mean you fall into a slightly lower tax bracket, potentially reducing the amount of tax you owe.
Higher RRSP Contribution Limit
The maximum RRSP contribution limit has increased for 2025.
The new maximum contribution is:
$32,490
This reflects the standard rule allowing contributions of up to 18% of your previous year’s income, up to the annual maximum.
Compared to last year, this represents an increase of $930 in additional contribution room.
This means taxpayers have more opportunity to reduce taxable income while saving for retirement.
New Canada Disability Benefit
As of June 2025, the federal government introduced the Canada Disability Benefit.
This new benefit is available to working-age Canadians between 18 and 64 years old who qualify for the Disability Tax Credit.
Eligible individuals may receive up to $2,400 per year.
Currently the benefit is taxable, but there are plans for legislation that may make it tax-exempt in the future.
End of the Digital News Subscription Tax Credit
The digital news subscription tax credit has now been eliminated.
Previously, taxpayers could claim a 15% credit on up to $500 in eligible digital news subscriptions.
While this credit is no longer available for personal tax filings, self-employed individuals may still be able to deduct certain subscriptions as business expenses if they are used to stay informed about industry developments.
Changes to the Canada Carbon Rebate
In March 2025, the federal government removed carbon pricing from gasoline.
As a result, the Canada Carbon Rebate prepayments have ended. The final rebate was issued in April 2025 for taxpayers who filed their 2024 tax returns.
However, there is an important deadline to keep in mind.
If you have not yet filed your 2024 tax return, you must do so before October 30, 2026 to receive the rebate. Any returns or adjustments submitted after that date will no longer qualify for the payment.
Looking Ahead to 2026
There is already another change coming next year.
Starting January 1, 2026, the lowest federal tax rate will drop again—from 14.5% to 14%.
This means taxpayers could see additional savings in the next tax year as well.
Final Thoughts
While the 2025 tax season does not introduce sweeping reforms, there are still several important updates that could impact your personal tax return. These include a reduction in the lowest federal tax rate, a special rule affecting how charitable donations can be claimed, an increase in RRSP contribution limits, the introduction of a new Canada Disability Benefit, the removal of the digital news subscription tax credit, and changes to the Canada Carbon Rebate program. Together, these updates highlight areas taxpayers should review carefully when preparing their returns.
