Key Changes to 2024 Personal Taxes in Canada: What You Need to Know
As we navigate the 2024 tax season, it's essential to stay informed about the latest changes to Canada's personal income tax regulations. Here's a comprehensive overview to help you understand and plan accordingly.
1. Adjustments to Federal Tax Brackets and Basic Personal Amount
To account for inflation, the Canada Revenue Agency (CRA) has updated the federal tax brackets for 2024. The new brackets are as follows:
15%: Income up to $55,867
20.5%: Income over $55,867 up to $111,733
26%: Income over $111,733 up to $173,205
29%: Income over $173,205 up to $246,752
33%: Income over $246,752
Additionally, the Basic Personal Amount (BPA)—the income you can earn tax-free—has increased to $15,705 for individuals earning $173,205 or less. For those with incomes above $246,752, the BPA is capped at $14,156. Incomes between these thresholds will see a gradual adjustment.
2. Changes to the Alternative Minimum Tax (AMT)
Starting in 2024, significant modifications to the AMT have been implemented:
Increased Rate: The AMT rate has risen to 20.5%.
Higher Exemption Threshold: The basic exemption amount has been elevated.
Adjusted Taxable Income Calculation: Revisions have been made to how adjusted taxable income is computed for AMT purposes.
Foreign Tax Credit: Changes affect the special foreign tax credit and the minimum tax carryover.
Non-Refundable Tax Credits: The value of most non-refundable tax credits is now limited under the AMT framework.
For a detailed breakdown, refer to the CRA's guidelines on the AMT.
3. Capital Gains Tax Update
Initially, the government proposed increasing the taxable portion of capital gains from 50% to 66.67% for individuals and businesses with gains exceeding $250,000. However, the implementation of this change has been deferred to January 1, 2026. Despite the delay, the government has been collecting the increased tax since June 2024. If the measure isn't formally approved, the CRA will cease its administration, potentially impacting the government's revenue projections.
4. Elimination of the Flat-Rate Method for Home Office Deductions
In response to the COVID-19 pandemic, a flat-rate method was introduced to simplify home office expense claims for the 2020, 2021, and 2022 tax years. This method has not been extended into 2024. Taxpayers wishing to claim home office expenses will need to use the detailed method, which requires comprehensive documentation of all related expenses.
5. Key Tax Filing Dates for 2024
February 19, 2024: The CRA began accepting 2023 tax returns.
April 30, 2024: Deadline for most Canadians to file their tax returns and pay any owed amounts. Filing on time ensures timely receipt of refunds, benefits, or credits.
June 16, 2024: Extended filing deadline for self-employed individuals, though any taxes owed are still due by April 30.
Staying updated on these changes is crucial for effective tax planning and compliance. For personalized advice tailored to your financial situation, consider consulting with a tax professional.
Here are the sources used for this blog post:
Government of Canada – CRA Tax Updates 2024
Canada Revenue Agency: What's New for 2024Narcity
CRA Tax Return 2024: What's New?Reuters
Canada Defers Implementation of Modified Capital Gains Tax to January 2026NerdWallet Canada
Canadian Tax Changes in 2024
These sources provide reliable and up-to-date information regarding tax changes in Canada for 2024.
