The Canada Revenue Agency (CRA) released the Indexation Adjustment For Personal Income Tax And Benefit Amounts from 2022 to 2025 on 15 November 2024.
Indexed amounts are provided for tax credits, medical expense supplements, old age security repayment, child benefits, and lifetime capital gains exemption for specific properties such as qualified farms, fishing properties, and small business shares.
The applicable federal tax brackets and rates for 2025 are as follows:
- Income up to CAD 57,375: taxed at 15%;
- Income over CAD 57,375 and up to CAD 114,750: taxed at 20.5%;
- Income over CAD 114,750 and up to CAD 177,882: taxed at 26%;
- Income over CAD 177,882 and up to CAD 253,414: taxed at 29%;
- Income exceeding CAD 253,414: taxed at 33%.
Although these proposed changes are subject to parliamentary approval, consistent with standard practice, the Canada Revenue Agency is administering the changes to the capital gains inclusion rate effective 25 June 2024.
For all taxpayers, the new inclusion rate will apply to capital gains realised on or after 25 June 2024. Impacted forms for individuals, trusts, and corporations are expected to be on Canada.ca as of 31 January 2025.
