A few updates may affect your personal tax return this year.
Here is what matters:
1. Lower federal tax rate
The lowest federal personal income tax rate dropped from 15% to 14%.
Because the change happened mid-year, the effective rate for 2025 works out to 14.5%.
This means slightly lower tax on income in the first bracket, up to $57,375 for 2025.
2. Temporary top-up credit
Normally, when the lowest tax rate drops, the value of many non-refundable credits also drops. These include tuition, medical expenses, and other common credits.
To prevent taxpayers from losing value on those credits, the government introduced a temporary top-up.
For 2025, non-refundable credits above $57,375 will still be calculated at 15%.
This temporary measure is expected to stay in place until 2030.
3. CRA digital changes
The CRA is moving more services online:
• You can now reset your CRA login without calling
• Multi-factor authentication is mandatory
• Payment plans can be set up online if you owe $1,000 or more
• Paper copies of T4 slips can no longer be requested by phone
• Notices of Assessment will be available in your CRA online account instead of mailed copies
If you are not set up for CRA online access, now is the time.
What does this mean for you?
For many taxpayers, the rate cut will create small savings. The top-up ensures you do not lose value on key credits.
The bigger shift is digital. If you rely on paper notices or phone calls, that process is changing quickly.
If you are unsure how these updates affect your return, let’s review it together.
Here is what matters:
1. Lower federal tax rate
The lowest federal personal income tax rate dropped from 15% to 14%.
Because the change happened mid-year, the effective rate for 2025 works out to 14.5%.
This means slightly lower tax on income in the first bracket, up to $57,375 for 2025.
2. Temporary top-up credit
Normally, when the lowest tax rate drops, the value of many non-refundable credits also drops. These include tuition, medical expenses, and other common credits.
To prevent taxpayers from losing value on those credits, the government introduced a temporary top-up.
For 2025, non-refundable credits above $57,375 will still be calculated at 15%.
This temporary measure is expected to stay in place until 2030.
3. CRA digital changes
The CRA is moving more services online:
• You can now reset your CRA login without calling
• Multi-factor authentication is mandatory
• Payment plans can be set up online if you owe $1,000 or more
• Paper copies of T4 slips can no longer be requested by phone
• Notices of Assessment will be available in your CRA online account instead of mailed copies
If you are not set up for CRA online access, now is the time.
What does this mean for you?
For many taxpayers, the rate cut will create small savings. The top-up ensures you do not lose value on key credits.
The bigger shift is digital. If you rely on paper notices or phone calls, that process is changing quickly.
If you are unsure how these updates affect your return, let’s review it together.
