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In some ways, the annual March 1 deadline for making a contribution to a registered retirement savings plan (RRSP) couldn’t come at a worse time with respect to the tax and non-tax financial obligations of most Canadians. During February, credit card bills for holiday spending will be coming due, taxpayers who pay tax by instalments will be facing the March 16 deadline for the first such instalment payment of 2026, and, for all taxpayers, any balance of income tax owed for 2025 must be paid to the federal government on or before April 30, 2026.

In some ways, the annual March 1 deadline for making a contribution to a registered retirement savings plan (RRSP) couldn’t come at a worse time with respect to the tax and non-tax financial obligations of most Canadians. During February, credit card bills for holiday spending will be coming due, taxpayers who pay tax by instalments will be facing the March 16 deadline for the first such instalment payment of 2026, and, for all taxpayers, any balance of income tax owed for 2025 must be paid to the federal government on or before April 30, 2026.

Notwithstanding all of those competing financial priorities, the unvarying rule is that RRSP contributions, in order to be deducted on the income tax return for 2025, must be made on or before March 1, 2026. (Where, as is the case this year, the March 1 contribution deadline falls on a Sunday, CRA administrative policy extends the deadline by one day, to Monday, March 2, 2026.)

The basic rules governing RRSP contributions allow a Canadian taxpayer to make a current year contribution to their RRSP of the lesser of 18% of earned income for the previous taxation year or the annual RRSP limit, which is a specified dollar amount. (For 2025, the annual RRSP dollar amount limit is $32,490.) Where a taxpayer has not made the maximum allowable RRSP contribution in a previous tax year, that unused contribution room is carried forward and added to allowable RRSP contribution room for 2025. The total contribution amount made for the year can then be deducted from income on the annual return.

The wisdom of making annual contributions to one’s RRSP has become an almost unquestioned tenet of tax and retirement planning, but the one question that doesn’t often get asked by taxpayers is whether it makes sense to contribute to an RRSP, or if a different savings vehicle is more appropriate to their tax and financial situation – or whether it’s even possible to make an RRSP contribution.

For just over 50 years after RRSPs were introduced in 1957, they represented the only means by which taxpayers who were not members of a registered pension plan could save for retirement on a tax-assisted basis. That changed in 2009, when the tax-free savings account (TFSA) program was introduced.

The tax treatment of TFSA contributions is essentially the inverse of the tax rules governing RRSP contributions. RRSP contributions made can be deducted from income and all contributions and all investment income earned by those contributions can compound free of tax inside the RRSP. However, when funds are withdrawn from the RRSP (which can be done at any time but must start, at the latest, the year after the taxpayer turns 71) all such funds are fully taxed as income. Conversely, contributions made to a TFSA are not deductible from income in the year they are made. However, as is the case with an RRSP, contributed funds and investment income earned on those funds can compound free of tax inside the TFSA. However, any and all funds withdrawn from the TFSA are received free of tax, whether they represent original contributions or investment income earned on those contributions.

Given the specific rules governing RRSPs and TFSAs, taxpayers must consider whether it is possible for them to make an RRSP contribution and, if so, whether an RRSP or a TFSA is their best vehicle for short-term or long-term saving. Some of the considerations which will influence that decision are as follows.

Where no RRSP contribution can be made

For Canadians over the age of 71, there is no real choice. All individual Canadians must collapse their RRSPs by the end of the year in which they turn 71, and no RRSP contributions can be made after that time. Practically speaking, a TFSA is the only tax-sheltered savings vehicle to which taxpayers over age 71 can contribute. Most taxpayers over the age of 71 have transferred their RRSP savings to a registered retirement income fund (RRIF) and are required to withdraw a specified percentage of funds from that RRIF each year. Taxpayers who are in the fortunate position of having such income in excess of current cash flow needs can contribute some or all of such amounts to a TFSA, to the extent of their TFSA contribution room for the year. While the RRIF withdrawals must still be included in income and taxed in the year of withdrawal, transferring the funds to a TFSA will allow them to continue compounding free of tax and no additional tax will be payable when any funds in the TFSA are withdrawn. And, unlike RRIF or RRSP withdrawals, monies withdrawn in the future from a TFSA will not affect the planholder’s eligibility for Old Age Security benefits or other means-tested tax credits.

When RRSP contribution room is reduced

The minority of Canadian taxpayers who belong to an employer-sponsored registered pension plan (RPP) save some percentage of income for retirement through contributions made to that RPP, with the employer also making a contribution to the benefit of the employee. The value of benefits earned under the RPP each year by the employee is known as a pension adjustment, and generally any such pension adjustment reduces the employee’s ability to contribute to an RRSP in the following year. Where the ability to contribute to an RRSP is limited in this way, a TFSA is likely the best available alternative for tax-assisted savings.

When the savings goal is short-term

Where savings are being put aside for an expenditure that is likely to be made in the next five years (like a new car, a wedding, or a “bucket list” vacation), saving through a TFSA is almost certain to be the better option. Taxpayers in that situation are sometimes tempted to make an RRSP contribution instead, in order to get a tax refund, and then to withdraw the funds when the planned expenditure is to be made. However, while choosing that option will provide a deduction on this year’s return and probably generate a tax refund, tax will still have to be paid when the funds are withdrawn from the RRSP a year or two later. And, more significantly from a long-term point of view, using an RRSP in this way will eventually erode one’s ability to save for retirement, as RRSP contributions which are withdrawn from the plan cannot be replaced – the contribution room used to make that contribution is permanently lost. While the amounts involved may seem small, the loss of compounding on even a relatively small amount over 25 or 30 years can make a significant dent in one’s ability to save for retirement.

When income is likely to increase significantly in the near future

The greatest tax benefit of contributing to an RRSP is realized when contributions are made when income (and therefore tax payable) is higher, and the intention is to withdraw those funds when both income and the rate of tax payable on that income is lower. Taxpayers who are expecting their income to rise significantly within a few years – for example students in post-secondary or professional education or training

programs – can save some tax by contributing to a TFSA while they are in school and their income (and therefore their tax rate) is low, allowing the funds to compound on a tax-free basis, and then withdrawing the funds tax-free once they’re working, when their tax rate will be higher. At that time, the withdrawn funds can be used to make an RRSP contribution, which will be deducted against income which would be taxed at the much higher rate, generating a tax savings. And, if a need for funds should arise in the meantime, a tax-free TFSA withdrawal can always be made.

When income after retirement isn’t likely to change

Lower-income taxpayers, for whom there isn’t likely to be a great difference between pre- and post-retirement income, are likely better off saving through a TFSA. That’s especially the case where those taxpayers may be eligible in retirement for means-tested government benefits like the Guaranteed Income Supplement or tax credits like the GST/HST credit or age credit. Withdrawals made from an RRSP or RRIF during retirement (including the minimum required withdrawal from an RRIF) will be included in income for purposes of determining eligibility for such benefits or credits, and lower-income taxpayers could find that such withdrawals have pushed their income to a level which reduces or eliminates their eligibility. On the other hand, monies withdrawn from a TFSA are not included in income for the purpose of determining eligibility for any government benefits or tax credits, so saving through a TFSA will ensure that receipt of such benefits is not put at risk.

Many Canadian couples, by the time they reach retirement, have achieved most of life’s major financial goals, and the recurring costs of reaching those goals are no longer a consideration. Retirement savings are in place, most homeowners are mortgage-free, and the cost of raising (and providing a post-secondary education for) their children is something already accomplished.

Many Canadian couples, by the time they reach retirement, have achieved most of life’s major financial goals, and the recurring costs of reaching those goals are no longer a consideration. Retirement savings are in place, most homeowners are mortgage-free, and the cost of raising (and providing a post-secondary education for) their children is something already accomplished.

However, there is one major cost which can never be left behind, and that is income tax. For many retirees, the annual tax bill represents their single largest expenditure, and our tax system recognizes this financial reality by providing a number of tax deductions and credits for which only individuals aged 65 and older are eligible.

Most Canadians aged 65 and older do claim those age-related tax deductions and credits on their annual return. There is, however, one age-related tax break of which many Canadians are unaware: pension income splitting. This lack of awareness is particularly unfortunate in light of the fact that pension income splitting has greater potential to reduce the overall family tax bill than any other single tax deduction or tax credit available to older Canadians.

Pension income splitting also offers attributes that are seldom found in other tax deduction or credit measures. First, the eligibility rules with respect to pension income splitting do not include an income ceiling (individual or family) which would limit claims which can be made. Second, there is no limitation placed on the amount by which income tax payable for the year can be reduced by pension income splitting. Third, utilizing pension income splitting does not require any expenditure of funds on the part of the taxpayer(s). And finally, no pre-planning or actual reallocation of income is needed: to benefit from pension income splitting, all that’s needed is for each spouse to file a single form (the T1032) with the CRA and to make a single entry on their 2025 tax return.

Pension income splitting basically involves taking private pension income which was received during the year by one spouse and allocating some of that income to the other spouse for tax purposes. Like all forms of income splitting, pension income splitting works because Canada has what is called a “progressive” tax system, in which the applicable tax rate goes up as income rises. For 2025, the federal tax rate applied to the first $57,375 of taxable income is 14.5%, while the federal rate applied to the next $57,375 of such income is 20.5%. So, an individual who has $100,000 in taxable income would pay federal tax of about $17,057 (14.5% of $57,375 plus 20.5% of $42,625). If that $100,000 was divided equally between such individual and their spouse, each would have $50,000 in taxable income and federal tax payable of $7,250 (14.5% of $50,000). The total federal tax bill for the family would be $14,500, saving just over $2,500 in federal tax payable for the year.

The general rule with respect to pension income splitting is that a taxpayer who receives private pension income during the year is entitled to allocate up to half that income (without any dollar limit) to their spouse for tax purposes. For pension income splitting purposes, private pension income means payments from a pension plan and, where the income recipient is aged 65 or older at the end of the year, payments from an annuity, a registered retirement savings plan (RRSP), or a registered retirement income fund (RRIF). Government source pensions, like the Canada Pension Plan, Québec Pension Plan, or Old Age Security payments do not qualify for pension income splitting, regardless of the age of the recipient.

The mechanics of pension income splitting are relatively simple. There is no need to transfer funds between spouses or to make any change in the actual payment or receipt of qualifying pension amounts, and no need to notify a pension or retirement savings plan administrator. Taxpayers who wish to split eligible pension income received by either of them must complete Form T1032, Joint Election to Split Pension Income (T1032 E (23)). That form, which is not included in the annual tax return package, can be found on the Canada Revenue Agency website at https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1032.html, or can be ordered (in English or French) by calling the CRA’s automated forms ordering telephone line at 1-855-330-3305.

Using the T1032, the taxpayer receiving the private pension income and the spouse with whom that income is to be split must make a joint election and provide the amount of pension income to be split. Where returns are filed electronically, the completed T1032 must be retained in case the Canada Revenue Agency makes a request for it; where the returns are paper filed, the completed T1032 form is filed with each spouse’s return. Since the splitting of pension income affects the income, and therefore the tax liability, of both spouses, the election must be made and the form filed by both spouses – an election filed by only one spouse or the other won’t suffice. In addition to filing the T1032, the spouse who actually received the private pension income to be split must deduct from income the amount of eligible pension income which is being allocated to their spouse. That deduction is taken on Line 21000 of their 2025 return. And, conversely, the spouse to whom the eligible pension income is being allocated is required to add that amount to their income on the return, this time on Line 11600.

Unfortunately, the T1 package issued by the Canada Revenue Agency simply outlines the mechanics of how to carry out pension income splitting but does not provide any information on the benefits of doing so. More detailed information on those benefits and on pension income splitting generally can, however, be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/pension-income-splitting.html.

Finally, taxpayers who would have been able to benefit from pension income splitting in previous taxation years but were unaware that they could do so may still be able to benefit. The CRA notes on its website that “Under certain circumstances, the CRA may allow you to make a late or amended election, or revoke an original election, if the application is made on or before the day that is three calendar years after the filing-due date for the year that the election applies. You and your spouse or common-law partner must agree to any amendment or revocation of the election.” Taxpayers who find themselves in that situation are advised to call the CRA’s Individual Income Tax Enquiries Line at 1-800-959 8281.

Every resident of Canada is required to pay income tax on their worldwide income. And while the vast majority of Canadians do so when and as required (with varying degrees of reluctance), very few understand how the amount of tax they must pay is calculated, or the system by which such tax payable is remitted to the federal taxation authorities.

Every resident of Canada is required to pay income tax on their worldwide income. And while the vast majority of Canadians do so when and as required (with varying degrees of reluctance), very few understand how the amount of tax they must pay is calculated, or the system by which such tax payable is remitted to the federal taxation authorities.

That’s particularly true for employed Canadians, who have tax deducted from their paycheques by their employer and remitted to the Canada Revenue Agency (CRA) on their behalf. When those taxpayers file a tax return for the year, all tax amounts remitted to the CRA on their behalf are credited against their total income tax bill for the year. The goal is for amounts withheld from the taxpayer’s paycheques throughout the year to be at least the amount of income tax actually owed for that year. In most cases, the system works, with the majority of taxpayers who file a return for the year receiving a tax refund.

While this “deduction at source” system generally works well, it is also a system which is largely invisible to the taxpayer, requiring virtually no action on their part. That’s not the case, however, for taxpayers who pay income tax by instalment payment, and some time during the month of February, millions of those taxpayers will receive an Instalment Reminder from the CRA, in which tax instalment amounts to be paid on March 16 and June 15, 2026 are set out.

The CRA’s decision to send an Instalment Reminder to particular taxpayers isn’t an arbitrary one, although it may seem so to the taxpayers who are unfamiliar with the instalment payment rules. Under those rules, the CRA issues an Instalment Reminder to a particular taxpayer where the amount of tax which is withheld from that taxpayer’s income throughout the year is not sufficient to cover the amount of income tax which they are actually required to pay for that year, leaving a balance owing when the return for the year is filed.

Put more technically, an Instalment Reminder is issued by the CRA when the amount of tax which was or will be owed by the taxpayer on filing is more than $3,000 in the current (2026) tax year and either of the two previous (2025 or 2024) tax years. Essentially, the instalment payment system for 2026 will be triggered where the amount of tax withheld from the taxpayer’s income throughout the year is at least $3,000 less than their total tax owing for 2026 and for either 2025 or 2024. For residents of Québec, that threshold amount which triggers the issuance of a federal Instalment Reminder is $1,800.

There’s a lot about the Instalment Reminder received by taxpayers that is confusing. There is no indication of how the CRA arrives at the numbers which are listed as instalment payments to be made in March and June 2026 and, in addition, the notice is called an Instalment “Reminder” and not an actual requirement to pay, or a bill from the CRA.

Taxpayers who receive an Instalment Reminder actually have three options when it comes to deciding how to respond. Each of those options has its own benefits and disadvantages, as outlined below.

No-Calculation Option

First, the taxpayer can simply pay the amounts set out in the Instalment Reminder, in full, and on or before the required dates. A taxpayer who does so will not face any interest or penalty charges, even if the amount remitted by way of instalment payments turns out to be less than the taxpayer’s actual tax payable for the year.

There are, however, circumstances in which paying the amounts specified on the Instalment Reminder might not be the best course of action. The amounts set out in the Reminder are based on the CRA’s best estimate of the taxpayer’s actual tax payable for the year, based on prior year income and taxes. Where tax payable for 2026 is likely to be significantly less (for instance, where the taxpayer recently retired and their income for 2026 will be less than income earned in the last year or two of employment) another approach can make more sense. A taxpayer who does not want to pay the amounts set out in the Instalment Reminder has two other options, as outlined on the CRA website.

Prior-Year Option

This option is best if the taxpayer’s 2026 income, deductions, and credits will be similar to such amounts for 2025, but significantly different from those in 2024. In that case, the taxpayer can determine 2026 tax instalment amounts based on the tax payable for 2025, as calculated on their return for that year.  As the first instalment for 2026 is not due until March 16, many taxpayers will already have completed and filed their return for 2025 and will know the exact amount of their tax payable for that year. (The forms for completing the return for 2025 are available now on the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package.html, and many of the software packages used to complete a return for 2025 can now be downloaded or purchased.)  

Current-Year Option

This option is best if the taxpayer’s 2026 income, deductions, and credits will be significantly different from those in both 2025 and 2024 – as, for example, a taxpayer who retired at the end of 2025.

Using this option, the taxpayer determines the amount of instalment payments to be made based on their estimated current year (2026) tax payable. The CRA provides an online calculator (available at calculation chart for instalment payments for 2026 (PDF, 94 KB)) which can be used to assist in making that determination.

While the no-calculation option – simply paying the amounts set out in the Instalment Reminder by the due dates – is entirely risk-free, that’s not necessarily the case with the prior-year and current-year options. Should the taxpayer’s calculations with respect to the amount of income tax which will be owed for the 2026 tax year be inaccurate, meaning a shortfall in instalment payments, the CRA will impose interest charges. For the current quarter (January 1 to March 31, 2026) the interest rate charged by the CRA is 7%, and all such interest amounts levied are compounded daily. The CRA can also impose penalty charges for insufficient instalments, but such penalty charges are levied only where the amount of instalment interest charges for the year is more than $1,000.

Taxpayers who don’t want to risk having to pay interest charges, or who simply don’t want to involve themselves in calculating tax payable amounts for the year, can simply pay the amounts listed in the Instalment Reminder issued by the CRA. The more technical-minded (or those who want to ensure that they are paying no more than absolutely required and are willing to take the risk of having to pay interest on any shortfall) can avail themselves of the second or third options outlined above.

Detailed information on the instalment payment system for 2026, and the calculation and payment options available to taxpayers, can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/payments/payments-cra/individual-payments/income-tax-instalments.html.

The strong preference of many older Canadians is to remain in their own homes for as long as possible – usually described as “aging in place”. There’s a lot to recommend that choice – moving, at any age, is a stressful experience. As well, remaining in one’s current home often means staying close to family and friends, and in a familiar community. There’s also a financial aspect to staying in one’s home: while home ownership has its unavoidable costs in the form of property taxes and utilities costs and the inevitable maintenance and repair bills, the cost of living in a retirement home is usually several thousand dollars per month. And, in the event that a greater level of care is needed, the cost of a bed in a long-term care home is even greater.

The strong preference of many older Canadians is to remain in their own homes for as long as possible – usually described as “aging in place”. There’s a lot to recommend that choice – moving, at any age, is a stressful experience. As well, remaining in one’s current home often means staying close to family and friends, and in a familiar community. There’s also a financial aspect to staying in one’s home: while home ownership has its unavoidable costs in the form of property taxes and utilities costs and the inevitable maintenance and repair bills, the cost of living in a retirement home is usually several thousand dollars per month. And, in the event that a greater level of care is needed, the cost of a bed in a long-term care home is even greater.

That said, the home that suited a growing family or even empty nesters in their early retirement years may no longer meet the needs of older retirees. When that’s the case, selling the home and moving is not the only available choice. Often, changes can be made to a home to make it both safe and comfortable for its older owners, and the out-of-pocket cost of making such changes can be offset by the availability of a non-refundable federal tax credit – the Home Accessibility Tax Credit (HATC) program.

The HATC is an unusually broad and flexible tax credit in a number of ways, including the broad definition of the kinds of expenses which qualify for the credit, who can claim the credit, and the number of tax credit programs for which expenses incurred may be eligible.

In a nutshell, the HATC program provides a tax credit for changes made to a home which allow a “qualifying individual to gain access to, or be mobile or functional within, the dwelling or which reduce the risk of harm to a qualifying individual within the dwelling or in gaining access to the dwelling”. It’s apparent from that description that a very broad range of expenses can qualify for the purpose of the HATC – everything from the purchase and installation of a bathtub grab bar to a full-scale renovation done to provide a ground floor bathroom. The limitations on which expenses qualify for the credit are actually quite few in number. Generally, in order to be eligible for the credit, a cost incurred must be for a change which is permanent part of the property, and costs which represent the ordinary costs of maintaining a home and property and/or are periodic or recurring in nature, do not qualify. The listing of non-qualifying expenses provided by the Canada Revenue Agency (CRA) is as follows:

• amounts paid to acquire a property that can be used independently of the qualifying renovation;
• the cost of annual, recurring, or routine repairs or maintenance;
• amounts paid to buy household appliances;
• amounts paid to buy electronic home-entertainment devices;
• the cost of housekeeping, security monitoring, gardening, outdoor maintenance, or similar services;
• financing costs for the qualifying renovation; and
• the cost of renovations incurred mainly to increase or maintain the value of the dwelling.

The definition of a “qualifying individual” for purposes of the HATC includes both homeowners who are over the age of 64 at the end of the taxation year for which the claim is being made, as well as individuals of any age who are eligible for the federal disability tax credit at any time during the year. However, the list of individuals who can make a claim for the HATC is broader than that.

Claims for the HATC can also be made by an “eligible individual” and for purposes of the credit an eligible individual includes the spouse or common-law partner of a qualifying individual. Other relatives of a qualifying individual, including a parent, grandparent, child, grandchild, brother, sister, aunt, uncle, nephew, or niece of that qualifying individual (or the spouse of any of these individuals) can also make the claim for the HATC, as long as the elderly or disabled individual is dependent on the relative making the claim. The rules governing the circumstances in which a relative other than a spouse or common-law partner can make a claim for the HATC are somewhat complex, and those rules are set out in detail on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-31285-home-accessibility-expenses.html.

It's a basic tenet of the Canadian tax system that an expenditure can only be claimed once, for either tax deduction or tax credit purposes – that “double dipping” by claiming the same expense twice is not allowed. The HATC is one of the rare exceptions to that rule, in that an eligible expense for purposes of the HATC which also qualifies as a medical expense can be claimed twice – as a medical expense tax credit and as a home accessibility tax credit.

Finally, there are a number of other grant, forgivable loan, or tax credit programs at the federal, provincial, and territorial government levels which provide assistance to eligible Canadians with the cost of making a home safer or more accessible for older residents. No matter the source or amount of such financial assistance, any amount received does not reduce the amount claimable for purposes of the HATC.

Take, for example a couple, each of whom is over the age of 64, and each of whom has an income of $30,000. The couple live in their own two-story home, in which the bedrooms and bathrooms are on the second floor. As the result of both age and illness- related mobility restrictions, one of the spouses must now use a wheelchair to move about within their home. In order to be able to stay in that home, the couple decide to undertake renovations which will create a bedroom and bathroom on the first floor of the home. They also replace the stairs leading to the front door of their home with a ramp. The cost to do these renovations is $15,000. In their tax return for the year, the couple can make the following claims with respect to the cost of the renovations.

Claim for HATC

The total cost of the renovations was $15,000. The HATC is calculated as 14.5% of eligible costs incurred, meaning that the credit for the renovation is $2,175 ($15,000 times 14.5%). The claim for the HATC is then made on line 31285 of the return, and federal income tax payable is reduced by $2,175.

Claim for medical expense tax credit (METC)

Under general rules, Canadian taxpayers can claim a federal medical expense tax credit for eligible medical expenses which exceed 3% of their net income for the year, or       $2,834, whichever is less.

Since both spouses have the same income, the tax result will be the same, regardless of who makes the claim for the METC. (If their incomes were different, the claim for the METC should usually be made by the lower-income spouse.)

Since the income of the spouse making the claim is $30,000, 3% of net income is $900, meaning that $14,100 ($15,000 minus $900) of the cost of renovations can be claimed for purposes of the METC. The METC is equal to 14.5% of qualifying medical expenses, meaning that the credit with respect to the renovation costs will be $2,044.50 ($14,100 times 14.5%), and federal tax payable by the individual making the claim will be reduced by that amount.

In total, the couple has received $4,219.50 in federal non-refundable tax credits (and thereby reduced their federal tax payable for the year by that amount) with respect to their renovation costs, bringing the net cost of those renovations from $15,000 to $10,780.50.

There is an overall limit of $20,000 on the amount of eligible expenses which can be incurred in respect of a single dwelling during a single tax year, regardless of the number of qualifying individuals who live in that dwelling. However, there are no restrictions on the number of times a claim for the HATC can be made. Consequently, taxpayers who are contemplating incurring costs which exceed the $20,000 annual limit should consider spreading those costs over more than one taxation year, in order to maximize the total HATC claim which can be made.

Detailed information on the HATC can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-31285-home-accessibility-expenses.html.

Individual income tax rates and brackets for 2026.

Alberta

Individual income tax rates and brackets for 2026

During the 2026 taxation year the province of Alberta will levy individual income tax using the following income brackets and tax rates.

Tax Rate          Taxable Income Brackets

8.0%                     up to $61,200

10.0%                   $61,201 to $154,259

12.0%                   $154,260 to $185,111

13.0%                   $185,112 to $246,813

14.0%                   $246,814 to $370,220

15.0%                   over $370,220

Alberta does not impose an individual income tax surtax or a high-income surtax.

British Columbia

Individual income tax rates and brackets for 2026

During the 2026 taxation year the province of British Columbia will levy individual income tax using the following income brackets and tax rates.

Tax Rate          Taxable Income Brackets

5.06%                   up to $50,363

7.70%                   $50,364 to $100,728

10.50%                 $100,729 to $115,648

12.29%                 $115,649 to $140,430

14.70%                 $140,431 to $190,405

16.80%                 $190,406 to $265,545

20.5%                   Over $265,545

British Columbia does not impose an individual income tax surtax or a high-income surtax.

Manitoba

Individual income tax rates and brackets for 2026

During the 2026 taxation year, the province of Manitoba will levy individual income tax using the following income tax brackets and tax rates.

Tax Rate          Taxable Income Brackets

10.8%                   up to $47,000

12.75%                 $47,001 to $100,000

17.40%                 over $100,000

The province of Manitoba does not impose an individual income tax surtax or a high-income surtax.

New Brunswick

Individual income tax rates and brackets for 2026

During the 2026 taxation year, the province of New Brunswick will levy individual income tax using the following income tax brackets and tax rates.

Tax Rate          Taxable Income Brackets

9.4%                     up to $52,333

14.0%                   $52,334 to $104,666

16.0%                   $104,667 to $193,861

19.5%                   over $193,861

The province of New Brunswick does not impose an individual income tax surtax or a high-income surtax.

Newfoundland and Labrador

Individual income tax rates and brackets for 2026

During the 2026 taxation year, the province of Newfoundland and Labrador will levy individual income tax using the following income tax brackets and tax rates.

Tax Rate          Taxable Income Brackets

8.70%                    up to $44,678

14.50%                  $44,679 to $89,354

15.80%                  $89,355 to $159,528

17.80%                  $159,529 to $223,340

19.80%                  $223,341 to $285,319

20.80%                  $285,320 to $570,638

21.30%                  $570,639 to $1,141,275

21.80%                  over $1,141,275

The province of Newfoundland and Labrador does not impose an individual income tax surtax or a high-income surtax.

Northwest Territories

Individual income tax rates and brackets for 2026

During the 2026 taxation year, the Northwest Territories will levy individual income tax using the following income tax brackets and tax rates.

Tax Rate          Taxable Income Brackets

5.9%                     up to $53,003

8.6%                     $53,004 to $106,009

12.2%                   $106,010 to $172,346

14.05%                 over $172,346

The Northwest Territories does not impose an individual income tax surtax or a high-income surtax.

Nunavut

Individual income tax rates and brackets for 2026

During the 2026 taxation year, Nunavut will levy individual income tax using the following income tax brackets and tax rates.

Tax Rate          Taxable Income Brackets

4.0%                     up to $55,801

7.0%                     $55,802 to $111,602

9.0%                     $111,603 to $181,439

11.50%                 over $181,439

Nunavut does not impose an individual income tax surtax or a high-income surtax

Nova Scotia

Individual income tax rates and brackets for 2026

During the 2026 taxation year, the province of Nova Scotia will levy individual income tax using the following income tax brackets and tax rates.

Tax Rate          Taxable Income Brackets

8.79%                   up to $30,995

14.95%                 $30,996 to $61,991

16.67%                 $61,992 to $97,417

17.50%                 $97,418 to $157,124

21.00%                 over $157,124

The province of Nova Scotia does not impose an individual income tax surtax or a high- income surtax.

Ontario

Individual income tax rates and income brackets for 2026

During the 2026 tax year, the province of Ontario will levy individual income tax using the following income brackets and tax rates.

Tax Rate          Taxable Income Brackets

5.05%                    up to $53,891

9.15%                    $53,892 to $107,785

11.16%                  $107,786 to $150,000

12.16%                  $150,001 to $220,000

13.16%                  over $220,000

For 2026, the province of Ontario levies an individual surtax of 20% of provincial tax payable over $5,818 plus 36% of provincial income tax over $7,446.

Information on Ontario individual income tax brackets, rates, and surtax rates for 2026 can be found on the provincial government website at https://data.ontario.ca/dataset/personal-income-tax-rates-and-credits/resource/77bc9ec1-068a-4bb1-9a5c-05a508eb92a0.

Prince Edward Island

Individual income tax rates and income brackets for 2026

During the 2026 tax year, the province of Prince Edward Island will levy individual income tax using the following income brackets and tax rates.

Tax Rate          Taxable Income Brackets

9.5%                     up to $33,928

13.47%                 $33,929 to $65,820

16.60%                 $65,821 to $106,890

17.62%                 $106,891 to $142,250

19.00%                 over $142,250

The province of Prince Edward Island does not impose an individual income tax surtax or a high-income surtax.

Québec

Individual income tax rates and brackets for 2026

During the 2026 taxation year the province of Québec will levy provincial individual income tax using the following income brackets and tax rates.

Tax Rate          Taxable Income Brackets

14.0%                   up to $54,345

19.0%                   $54,346 to $108,680

24.0%                   $108,681 to $132,245

25.75%                 over $132,245

The province of Québec does not impose an individual income tax surtax or a high-income surtax.

Details of the province’s personal income tax brackets and rates for 2026 can be found on the Revenu Québec website at https://www.revenuquebec.ca/en/businesses/source-deductions-and-employer-contributions/employers-kit/principal-changes-for-2026-employers-kit/#accordion_169636=[1].

Saskatchewan

Individual income tax rates and brackets for 2026

During the 2026 taxation year the province of Saskatchewan will levy individual income tax using the following income brackets and tax rates.

Tax Rate          Taxable Income Brackets

10.5%                   up to $54,532

12.5%                   $54,533 to $155,805

14.5%                   over $155,805

The province of Saskatchewan does not levy an individual income tax surtax or a high-income surtax.

Yukon Territory

Individual income tax rates and brackets for 2026

During the 2026 taxation year, the Yukon Territory will levy individual income tax using the following income tax brackets and tax rates.

Tax Rate          Taxable Income Brackets

6.4%                     up to $58,523

9.0%                     $58,524 to $117,045

10.9%                   $117,046 to $181,440

12.8%                   $181,441 to $500,000

15.0%                   over $500,000

The Yukon Territory does not impose an individual income tax surtax or a high-income surtax.

The Employment Insurance premium rate for 2026 is set at 1.63%.

The Employment Insurance premium rate for 2026 is set at 1.63%.

Yearly maximum insurable earnings are increased to $68,900, making the maximum employee premium $1,123.07.

As in previous years, employer premiums are 1.4 times the employee premium. The maximum employer premium for 2026 is therefore $1,572.30.

As of 2024, there are two contribution levels for the Québec Pension Plan (QPP). Income amounts and employee contribution percentages for 2026 for each contribution level are as follows:

As of 2024, there are two contribution levels for the Québec Pension Plan (QPP). Income amounts and employee contribution percentages for 2026 for each contribution level are as follows:

• First-tier contributions for 2026 are set at 6.3% of pensionable earnings between $3,500 and $74,600. 
• Second-tier contributions for 2026 are set at 4.0% of pensionable earnings between $74,600 and $85,000.

The maximum employee QPP contribution in 2026 for employees making only first-tier contributions (those with pensionable earnings of $74,600 or less) will be $4,479.30. Employees making second-tier contributions will be required to contribute up to an additional $416.00 in contributions for the year.

As of 2024, there are two contribution levels for the Canada Pension Plan. Income amounts and employee contribution percentages for 2026 for each contribution level are as follows.

As of 2024, there are two contribution levels for the Canada Pension Plan. Income amounts and employee contribution percentages for 2026 for each contribution level are as follows.

• First-tier contributions for 2026 are set at 5.95% of pensionable earnings between $3,500 and $74,600. 
• Second-tier contributions for 2026 are set at 4.0% of pensionable earnings between $74,600 and $85,000.

The maximum employee CPP contribution in 2026 for employees making only first-tier contributions (those with pensionable earnings of $74,600 or less) will be $4,230.45. Employees making second-tier contributions will be required to contribute up to an additional $416.00 in contributions for the year.

Tax credit amounts on which individual, non-refundable federal tax credits for 2026 are based, and the actual tax credit claimable, will be as follows:

Tax credit amounts on which individual, non-refundable federal tax credits for 2026 are based, and the actual tax credit claimable, will be as follows:

                                                                   Credit amount          Tax credit

Basic personal amount*                                 $16,452                   $2,303

Spouse or common-law 
partner amount*                                             $16,452                   $2,303

Eligible dependant amount*                           $16,452                   $2,303

Age amount                                                    $9,208                     $1,289

  net income threshold for erosion of 
  age credit                                                      $46,432

Canada employment amount                          $1,501                    $210                       

Disability amount                                             $10,341                  $1,448

Adoption expenses credit                                $19,972                  $2,796

Medical expense tax credit (3% of 
net income ceiling)                                           $2,890

*For taxpayers having net income for the year of more than $258,482, amounts claimable for the basic personal amount, the spousal amount, and the eligible dependant amount for 2026 may differ.

The indexing factor for federal tax credits and brackets for 2026 is 2.0%. The following federal tax rates and brackets will be in effect for individuals for the 2026 tax year.

The indexing factor for federal tax credits and brackets for 2026 is 2.0%. The following federal tax rates and brackets will be in effect for individuals for the 2026 tax year.

Income level                       Federal tax rate

$16,452 - $58,523                       14.0%

$58,524 - $117,045                      20.5%

$117,046 - $181,440                    26.0%

$181,441 - $258,482                    29.0%

Over $258,482                             33.0%

Each new tax year brings with it a schedule of tax payment and filing deadlines, as well as some changes with respect to tax saving and planning opportunities. Some of the more significant dates and changes for individual taxpayers for 2026 are listed below.

Each new tax year brings with it a schedule of tax payment and filing deadlines, as well as some changes with respect to tax saving and planning opportunities. Some of the more significant dates and changes for individual taxpayers for 2026 are listed below.

Registered retirement savings plan (RRSP) deduction limit and contribution deadline

For 2025, the maximum current year contribution limit is $32,490. In order to make the maximum current year contribution for 2025 (for which the contribution deadline will be Monday March 2, 2026), it will be necessary to have earned income of $180,500 for the 2024 taxation year.

For 2026, the maximum current year contribution limit will increase to $33,810. In order to make the maximum current year contribution for 2026 (for which the contribution deadline will be Monday March 1, 2027) it is necessary to have earned income of $187,834 for the 2025 taxation year.

Tax-free savings account (TFSA) contribution limit

The TFSA current year contribution limit for 2026 remains at $7,000. The actual amount which can be contributed by a particular individual in 2026 includes both the current year contribution limit and any carryover of uncontributed or re-contribution amounts from previous taxation years.

Taxpayers can find out their individual 2026 TFSA contribution limit by calling the Canada Revenue Agency’s automated Individual Income Tax Enquiries Service at 1-800-959-8281 and selecting option 3. In order to receive information on one’s TFSA limit for the year, it’s necessary to provide one’s social insurance number and a personal identification number (PIN). Taxpayers who do not have a PIN must provide their date of birth and information on income amounts reported on prior year returns. Taxpayers who have registered for the CRA’s online tax service My Account can obtain information on their TFSA limit for 2026 on that service.

A current year TFSA contribution can be made at any time during the taxation year.

First Home Savings Account (FHSA) contribution limit for 2026

The FHSA current year contribution limit for 2026 is $8,000. The actual amount which can be contributed by a particular individual includes both the current year contribution limit and any carryover of uncontributed amounts from previous years, to a maximum carryover limit of $8,000.

There is a lifetime per individual limit of $40,000 in contributions to an FHSA, and an FHSA contribution can be made at any time during the taxation year.

Individual tax instalment deadlines for 2026

Millions of individual taxpayers pay income tax by quarterly instalments, which are due on the 15^th day of March, June, September, and December 2026. Where the 15^th of the month falls on a weekend or a statutory holiday, the instalment payment deadline is extended to the next business day.

The actual tax instalment due dates for 2026 are as follows:

• Monday March 16, 2026
• Monday June 15, 2026
• Tuesday September 15, 2026
• Tuesday December 15, 2026

Old Age Security income clawback threshold

For 2026, the income level above which Old Age Security (OAS) benefits are clawed back is $95,323.

Individual tax payment and filing deadlines in 2026

For all individual taxpayers, including those who are self-employed, the deadline for payment of any balance of 2025 taxes owed is Thursday April 30, 2026.

Taxpayers (other than self-employed individuals and their spouses) must file an income tax return for 2025 on or before Thursday April 30, 2026.

Self-employed taxpayers and their spouses must file an income tax return for 2025 on or before Monday June 15, 2026.

Two quarterly newsletters have been added – one dealing with personal issues, and one dealing with corporate issues.

Two quarterly newsletters have been added – one dealing with personal issues, and one dealing with corporate issues.

They can be accessed below.

Corporate:

Issue #74 Corporate

Personal:

Issue #74 Personal