Canada Income Tax 2026 – Key Changes You Need to Know Before April 30
The 2026 tax season is filing your 2025 income. The deadline for most Canadians is April 30, 2026. Self-employed individuals have until June 15, 2026, though any taxes owed must still be paid by April 30 to avoid interest.
As of April 12, 2026, more than 16.1 million returns have already been filed and over $22.2 billion in refunds have been issued. Canada.ca If you haven't filed yet, here's what's new this year.
Lower Tax Rate for Most Canadians
The biggest change Canadians will notice is the one percentage point reduction to the lowest marginal tax rate — now 14% on the first $58,523 of income, down from 15%. This works out to about $420 in tax savings per person, or $840 per couple.
The federal basic personal amount — the amount of income that is not taxed — has also increased to $16,452 for 2026. Federal tax brackets have been indexed to inflation, meaning you can earn a little more before being pushed into a higher bracket.
Capital Gains Tax — No Increase
Good news for investors and property owners: the capital gains inclusion rate remains unchanged at 50% for individuals. The previously proposed increase has been scrapped.
New: Personal Support Worker (PSW) Tax Credit
A new temporary refundable tax credit for personal support workers allows PSWs to claim 5% of eligible earnings, for a credit of up to $1,100. This measure is in effect from 2026 until the end of 2030. Note it is not available in BC, Newfoundland and Labrador, or the Northwest Territories.
GST/HST Credit Boosted
The federal government enhanced the existing GST/HST credit and renamed it the Canada Groceries and Essentials Benefit, providing a one-time payment equivalent to 50% of the yearly credit value (no later than June 2026), and increasing quarterly payments by 25% over five years starting July 2026. This affects an estimated 12 million low-income Canadians.
CPP Contributions Up Slightly
The first CPP earnings ceiling for 2026 is $74,600 (up from $71,300 in 2025), with a second ceiling of $85,000. The employee contribution rate remains 5.95%. Higher contributions now mean better future CPP benefits.
RRSP & TFSA Limits for 2026
- RRSP maximum contribution for 2025 income: $33,810
- TFSA annual limit: $7,000 (cumulative lifetime max: $109,000)
- FHSA annual limit: $8,000 (lifetime max: $40,000)
Filing on time avoids late penalties and ensures you receive any benefits or credits you're entitled to — including the Canada Child Benefit, GST/HST credit, and Canada Workers Benefit.
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