Updated: What’s new for the 2025 tax-filing season

Capital gains. Finance deferred the proposed increase to the capital gains inclusion rate to 2026. The CRA is providing additional time for taxpayers reporting capital gains to meet their tax filing obligations. It will grant relief of late-filing penalties and interest until June 2, 2025, for individual filers and until May 1, 2025, for trust filers.

Alternative minimum tax (AMT). Introduced for 2024 and later tax years, AMT changes include an increase to the minimum tax rate, to 20.5% from 15%, and an increased basic exemption threshold, to the start of the fourth federal tax bracket ($173,205 in 2024) from $40,000.

There are also changes to the calculation of adjusted taxable income for AMT purposes, the special foreign tax credit, and the minimum tax carryover. The changes also limit the value of most non-refundable tax credits. See Line 41700.

Canada carbon rebate (not available in B.C., the Northwest Territories, Nunavut, Quebec or the Yukon). This tax-free rebate helps eligible individuals and families offset the cost of the federal pollution pricing, and consists of a basic amount and a supplement for small and rural communities.

Under proposed changes, eligibility for the supplement will be expanded to include those who reside within a census rural area or small population centre (less than 30,000 people) in a census metropolitan area, as designated by Statistics Canada. Eligibility for the supplement will be based on the geographical designations from the most recent census published before the tax year.

In a LinkedIn post, Ryan Minor, director of tax with CPA Canada, shared communication from the CRA that said the proposed changes will be delayed because of prorogation: “Since Parliament will not sit again until March, it will not be possible for legislation to be tabled and receive royal assent in time for the expanded eligibility to take effect as early as April 2025. If legislation does pass later this spring, the rural supplement amounts for those now eligible as a result of the expansion will be queued to be issued when possible.”

Canada Pension Plan and Quebec Pension Plan enhancement. As of January 2024, a second additional contribution of 4% is required by the employee and employer on pensionable earnings between the year’s maximum pensionable earnings ($68,500 in 2024) and the year’s additional maximum pensionable earnings ($73,200 in 2024). This amount is reported in box 16A (CPP) or box 17A (QPP) of T4 slips. For self-employment income and other earnings, the rate for second additional contributions is 8%.

Quebec Pension Plan. As of Jan. 1, 2024, Quebecers aged 65 and over who are still working and already receiving QPP can choose to stop contributing to the plan, as workers in the rest of Canada already can under CPP.

In addition, the requirement to contribute to QPP for workers age 72 and older ends as of the year they turn 73. All wages paid and earnings received as of Jan. 1 of the year a worker turns 73 are no longer subject to QPP contributions.

Charitable donations. The deadline for making donations for the 2024 tax year was extended to Feb. 28, 2025, given the disruption of the Canada Post strike. The draft legislation confirms that the donation can be in cash or “transferred by way of cheque, credit card, money order or electronic payment.”

Home Buyers’ Plan (HBP) withdrawals. The HBP withdrawal limit increased to $60,000 from $35,000 for withdrawals made after April 16, 2024. Temporary repayment relief was also introduced to defer the start of the 15-year repayment period by an additional three years (up from two years previously) for participants making a first withdrawal between Jan. 1, 2022, and Dec. 31, 2025. Accordingly, the 15-year repayment period will start in the fifth year following the year that the first withdrawal was made.

Mineral exploration tax credit. Eligibility has been extended to flow-through share agreements entered into before April 2025 for expenses incurred (or deemed incurred) before 2026. See Line 41200.

Reporting rules for digital platform operators. Beginning with the 2024 calendar year, reporting platform operators must collect and report information on sellers using their platform to sell goods or provide certain services, such as the rental of real or immovable property.

If your client is a reportable seller, their reporting platform operator will provide them with an annual copy of the information collected and reported to the CRA under these rules. Sellers should expect to receive that information by Jan. 31, the CRA said.

Short-term rentals. If your client rents a residential property for short periods (less than 90 consecutive days), they must comply with provincial or municipal regulations and licensing, or else the CRA will deny them expense deductions. Transitional relief is in place for the 2024 tax year, so that if a taxpayer was compliant by Dec. 31, 2024, the taxpayer is deemed compliant for all of 2024.

Volunteer firefighters’ amount and search and rescue volunteers’ amount. These amounts increased to $6,000 from $3,000. Eligible individuals who performed at least 200 hours of combined eligible volunteer service during the year can claim one of these amounts.

Canada child benefit (CCB). Beginning in 2025, eligibility for the CCB will be extended for six months after a child’s death if the person claiming the CCB for that child is otherwise eligible. The person receiving the CCB will still be required to notify the CRA of the child’s death before the end of the month following the death. The extended period will also apply to the child disability benefit.

Stats from the 2024 tax-filing season

The CRA said in its release on Thursday that more than $52 billion in benefits was paid to taxpayers last tax-filing season.

The agency also issued more than 19 million refunds, with the average refund being $2,294.

Taxpayers who get back thousands of dollars in tax refunds can avoid that outcome by filing a T1213 Request to Reduce Tax Deductions at Source.

The form lists deductions and non-refundable tax credits, including RRSP contributions (not deducted from pay or by an employer), child care expenses, support payments, employment expenses, carrying charges and interest expenses on investment loans, large charitable donations and more.