What’s new for the 2026 tax-filing season
Personal income tax changes
The lowest federal personal income tax rate was reduced from 15 per cent to 14.5 per cent for the 2025 taxation year. Beginning in 2026, this rate will be further reduced to 14 per cent. Federal tax brackets have been indexed to inflation; provincial and territorial indexing varies.
Capital cost allowance (CCA) changes
Bill C-15 contains several important changes to the CCA rules. Immediate expensing will be available for productivity-improving capital assets (patents, data network infrastructure equipment and general-purpose electronic data processing equipment) acquired after April 15, 2024 and available for use before 2027.
Immediate expensing will also be available in respect of manufacturing or processing machinery and equipment (Class 53), clean energy generation equipment/energy conservation equipment (Classes 43.1) and zero-emission vehicles (Classes 54, 55 and 56) if acquired on or after Jan. 1, 2025, and available for use before 2030, with a phase-out for property that becomes available for use from 2030 to 2033.
Although Bill C-15 has not yet been enacted, the Canada Revenue Agency (CRA) has confirmed to CPA Canada that it is administering these CCA changes and others.
The following reminders are worth highlighting for the current tax season:
Some individuals and businesses have been transitioned by the CRA to receiving certain correspondence digitally rather than by paper mail, which may result in important notices, requests and assessments being missed.
Tax preparers can no longer submit authorization requests for representative access using tax preparation software. Representatives must instead log into Represent a Client and submit an authorization request to gain access to individual client accounts.
The Tax on Split Income rules could result in certain income being taxed at the highest marginal rate applicable to the type of income.
Consider whether a deemed interest benefit must be reported in respect of low-interest or interest-free loans. For example, certain shareholder loans may give rise to an interest benefit.
Tax deductions to earn rental income could be limited for a non-compliant short-term rental.