Canada tax overhaul lands
Canada is rolling out a major tax update and stricter compliance rules effective April 1, 2026 — new brackets and higher thresholds are part of the package. The changes increase reporting scrutiny and procedural updates that could affect how income and deductions are filed this tax year ( ).
The federal government deferred the planned increase to the capital‑gains inclusion rate to January 1, 2026, delaying the shift from a 50% inclusion rate to a two‑thirds inclusion rate for gains above CA$250,000 and for most corporations and trusts. (canada.ca) Draft legislative changes linked to that inclusion‑rate move would also alter the employee stock‑option deduction — reducing the standard deduction to one‑third of the taxable benefit while adding a special one‑sixth deduction for the first CA$250,000 of benefit — provisions flagged for implementation alongside the 2026 inclusion‑rate changes. (rsmcanada.com) The Basic Personal Amount for 2026 is set at CA$16,452 for taxpayers with net income up to CA$181,440, with the BPA phasing down between CA$181,440 and CA$258,482. (taxtips.ca) Registered‑account limits rose for 2026: the annual TFSA contribution limit remains CA$7,000 and unused TFSA room will be updated in CRA records beginning April 2026, while the RRSP dollar limit for 2026 is CA$33,810 (18% of 2025 earned income, subject to individual earned‑income calculations). (fidelity.ca) The Canada Revenue Agency is requiring CRA My Account and My Business Account users to add a backup multi‑factor authentication option beginning in the 2026 filing season, with options including a third‑party authenticator app or a printed passcode grid. (canada.ca) Employers and payroll administrators must use updated TD1 personal‑tax credits and 2026 payroll deduction formulas (TD1 updated December 8, 2025; payroll deduction formulas effective January 1, 2026) to calculate source withholdings under the new 2026 personal amounts and bracket thresholds. (canada.ca)
