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Claiming a tax deduction for child care expenses incurred (April 2026)

While the rules of the Canadian tax system include a great number of tax deduction and credit claims which can be made by individuals, the general rule is that personal living expenses do not, in most cases, qualify for any kind of tax assistance or tax relief. However (and fortunately for parents who must expend significant amounts over the course of a tax year for the cost of day care, after-school care, a babysitter, or even a nanny) an exception is provided from that rule in the form of the child care expenses tax deduction.

That child care expenses tax deduction is particularly beneficial in two ways: first, while there are limits on the amount of child care expenses which can be deducted (and those limits are not indexed to inflation and have not changed since 2014), the limits imposed are still relatively generous ones. Second, and more important, the child care expense deduction enables parents to deduct eligible expenses from income on a dollar-for-dollar basis, meaning that income used to pay eligible child care expenses is income which is not taxed. As well, the rule determining whether child care costs incurred are deductible is fairly straightforward and easy to meet – parents who incur eligible child care costs in order to work (whether in employment or self-employment) or, in some cases to attend school, can deduct those costs from income.

The amount of any available child care deduction to be claimed for the 2025 tax year is calculated on Form T778 E(25), and that calculation can seem forbiddingly complex. However, at the end of the day, the amount of child care expenses which can be deducted is simply the least of three figures, and only one of those figures requires a calculation. The steps involved in determining the amount of available child care expenses deduction are as follows.

First, the amount of any deduction for child care expenses is limited to two-thirds of the taxpayer’s earned income for the year. The income figure used to calculate the two-thirds figure is, generally, the amount shown on Line 23600 of the annual tax return. Where the family incurring child care expenses is a two-income family, it is usually the spouse with the lower net income who must make the claim and consequently it is their net income which is used to provide that two-thirds of net income figure.

The second figure to be determined is the amount actually paid for eligible child care costs during the year. While virtually any licensed child care arrangement will qualify for purposes of the deduction, some more informal arrangements may not. Specifically, no deduction is available for amounts paid to most family members to provide child care. Consequently, it’s not possible for a working spouse to pay the stay-at-home parent to provide child care, nor is it possible to pay an older sibling (or any other related person) who is under the age of 18 to provide such services and to claim a deduction for those expenses incurred. As well, where a claim is made for a deduction for child care expenses on the annual return, the claimant must obtain (and be prepared to provide to the tax authorities) the social insurance number of the individual providing the care as well as a receipt showing the amounts paid, whether to an individual or an organization.

The third figure to be determined is the one which requires some calculation. Basically, the rules governing the deduction of child care expenses impose a maximum deduction per child per year (referred to as the “basic limit”), with that basic limit dependent on the age and health of the particular child.

For 2025, the following overall limits apply:

$5,000 in costs per year for a child who was born in 2009 to 2018;
$8,000 in costs per year for a child who was born after 2018;
$11,000 in costs per year for a child who was born in 2025 or earlier and for whom the disability tax credit can be claimed.

Take, for example, a two-income family in which one spouse earns $70,000 and the second spouse earns $56,000. They have two children, aged 4 (born in 2021) and aged 8 (born in 2017). Neither is disabled. The 4-year-old attends day care five days a week and the 8-year-old goes to an after-school program each weekday.

During 2025, the family incurred $6,000 in day care costs for the younger child and $4,000 in costs for after-school care for the older child.

All eligible child care costs incurred must be claimed by the lower income spouse, who earned $56,000 during 2025. In order to determine the amount which can be claimed for each child, it’s necessary to determine the basic limit for that child, based on their age, as follows.

the basic limit for the 4-year-old (who was born after 2018) is $8,000, and so the entire $6,000 in day care costs incurred can be deducted.
the basic limit for the 8-year-old (who was born between 2009 and 2018) is $5,000, and so once again the entire $4,000 incurred in costs for after-school can be deducted.

Finally, the overall limit for purposes of the child care expense deduction is two-thirds of earned income of the lower-income spouse, meaning that the maximum claim which can be made for 2025 is $37,296 (66.6% of $56,000), well in excess of the actual costs incurred.

The total deduction available for child care expenses incurred for the 2025 tax year will therefore be $10,000. That deduction is claimed on Line 21400 of the tax return filed by the lower-income spouse for the year, reducing their taxable income from $56,000 to $46,000, and resulting in a federal tax savings of $1,450. A similar tax deduction is claimed as well for provincial tax purposes; the amount of provincial tax saved will depend on the tax rates imposed by the province in which the family lives.

Parents wishing to find out more about the child care expense deduction, and perhaps to calculate the maximum deduction which will be available to them for the 2025 tax year, should consult Form T778 E (25). The form is currently on the CRA website and can be found at https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t778.html.

The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.

Making a payment arrangement with the CRA (April 2026)

Very few Canadians look forward to the annual chore of completing and filing their income tax return, and that experience isn’t improved by finding out, once the return is completed, that additional tax amounts are owed to the CRA. Unfortunately, that’s an experience that millions of Canadians will have over the next month or so. While most tax return filings result in payment of a refund to the taxpayer, that’s not always the case. This year, of the returns filed by March 22, 2026, just over a million of those returns resulted in additional tax owed on filing by the individual tax filer. And while that number represents a very small percentage of total returns filed, that’s little consolation for the taxpayers who find themselves in that unhappy position.

Finding out that additional tax amounts are owed usually comes as a surprise to the taxpayer and consequently is almost never something that they have budgeted or planned for. The worst-case scenario, for all taxpayers, is to find out that they are faced with a large tax bill and an imminent payment deadline, and that they just don’t have the funds needed to make the required payment by that deadline. This year, that payment deadline is Thursday April 30, 2026 for ALL individual taxpayers (including self-employed taxpayers and their spouses, notwithstanding the fact that such taxpayers have until Tuesday June 16, 2026 to file their 2025 tax return).

The April 30 payment deadline is inflexible and, where payment in full is not made on or before that date, interest charges on any unpaid balance will be levied by the CRA beginning on May 1, 2026. Interest charges levied by the CRA tend to add up quickly, for two reasons. First, the interest rate charged by the CRA on outstanding tax amounts is, by law, higher than current commercial rates – the rate charged from April 1 to June 30, 2026 is 7.0%. Second, interest charges levied by the CRA are compounded daily, meaning that each day interest is levied on the previous day’s interest charges. It is for these reasons that a taxpayer is, where at all possible, likely better off arranging private borrowing – for example, through a line of credit or low-interest credit card – in order to pay any taxes owing by the April 30, 2026 deadline.

Where the taxpayer can’t pay their tax bill out of current resources and is unable to borrow the funds to do so, there is another option. Like most creditors, the CRA would rather get paid on time and in full, but the Agency’s ultimate goal is to collect the full amount of taxes owed. If a tax bill can’t be paid on time, in full or in part, the CRA is open to making a payment arrangement with the taxpayer, providing them with the option of paying an amount owed over time, plus interest.

There are three options available to taxpayers who want to propose such a payment arrangement. The first is a call to the CRA’s automated TeleArrangement service at 1-866-256-1147. When making such a call, it is necessary for the taxpayer to provide their full name and address, social insurance number, and date of birth, and to have the Notice of Assessment for the last tax return for which the taxpayer filed. For taxpayers who are up to date on their tax filings, that will be the Notice of Assessment for the return for the 2024 tax year. The TeleArrangement Service is available Monday to Friday, from 7 a.m. to 10 p.m., Eastern time.

Taxpayers who would rather speak directly to a CRA employee can call the Agency’s debt management call centre at 1-888-863-8657 from 8 a.m. to 8 p.m. Eastern Time Monday to Friday. Where there is a long wait time, the taxpayer can request that a CRA representative return the call, or can complete an online form (available at https://apps.cra-arc.gc.ca/ebci/iesl/showClickToTalkForm.action) requesting a callback from a CRA agent.

Finally, taxpayers who have registered for the CRA’s online service My Account can also log into their account to schedule a series of pre-authorized debits from their bank account to discharge their tax debt. My Account is available on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/cra-login-services.html.

Finally, regardless of the taxpayer’s circumstances, there is one strategy which is in all circumstances the wrong choice. Taxpayers who can’t pay their tax bill by the deadline sometimes conclude that there is no point in filing if payment can’t be made. That’s the wrong decision, and potentially a very costly one. Where an amount of tax is owed and the return isn’t filed on time, there is an immediate late filing penalty imposed equal to 5% of the outstanding tax amount – and interest charges start accruing on that penalty amount (as well as on the outstanding tax balance) immediately. For each full month that the return isn’t filed, a further penalty of 1% of the outstanding tax amount is charged, to a maximum of 12 months. Higher penalty amounts are charged, for a longer period, where the taxpayer has incurred a late-filing penalty within the past three years. In the worst-case scenario, the total penalty charges can reach 50% of the tax amount owed – and that doesn’t count the compound interest which is levied on all penalty amounts, as well as on all unpaid taxes. In all cases, no matter what the circumstances, the right answer is to file one’s tax return on time and, where necessary, contact the CRA to make an arrangement to pay tax amounts owed over time.

Detailed information on the options available to taxpayers who can’t pay their taxes on time and in full can be found on the CRA website at Call us if you can't pay in full or on time - Debt collection at the CRA - Canada.ca and https://www.canada.ca/en/revenue-agency/services/payments-cra/payment-arrangements.html.

Claiming the political contribution tax credit on your 2025 tax return (April 2026)

2025 was a busy year in Canadian politics. In addition to the general federal election, elections were held in two provinces (Ontario and Newfoundland) and two of the territories (Nunavut and Yukon Territory). In addition, there were no fewer than thirteen by-elections and eleven leadership contests, for different political parties, at both the federal and provincial/territorial levels.

Whether it’s a leadership contest, a by-election, or a general election at the federal, provincial, or territorial level, votes are needed in order to win. And to run the leadership or election campaigns needed to garner those votes, candidates need an organization, volunteers, and money – a lot of money. Particularly in a general federal election, the major political parties needed to raise and spend millions of dollars, and the task of raising that money is undoubtedly made somewhat easier by the fact that a tax credit exists to help offset the out-of-pocket cost to potential donors.

Individuals who donated money to the political party or candidate of their choice during 2025 may or may not be happy with the outcome of an election or leadership contest, but no matter which registered party or candidate they donated to, donors may be able to claim a federal and a provincial or territorial tax credit for that donation when they file their returns for the 2025 tax year.

Federally, the political contribution tax credit is available with respect to funds contributed to either a registered political party or to candidates running in a federal election. Contributions can be made at any time, not just during an election campaign, as long as the donation is received by an official candidate or by a registered federal political party or association.

While the parties which currently hold seats in the House of Commons are, of course, the most well known, there were in fact 16 political parties registered and in good standing with Elections Canada at the time of the 2025 federal general election; a listing of those parties can be found on the Elections Canada website at https://www.elections.ca/content.aspx?section=ele&dir=pas/45ge/pollim&document=index&lang=e.

Contributions to any one of these registered parties, within prescribed limits, will qualify for the federal political contribution tax credit. And, where a qualifying contribution is made, an official receipt must be issued in order for the contributor to claim that tax credit.

The federal political contribution tax credit is calculated as a percentage of donations given, with the credit percentage decreasing as contributions amounts increase. The credit percentages allowed for different contribution levels are as follows:

*Contribution amount*	*Allowable tax credit*
$0.01 to $400.00	75 per cent of the contribution
$400.01 to $750.00	$300 plus 50 per cent of the contribution over $400
$750.01 and over	$475 plus 33.33 per cent of the contribution over $750

The maximum credit claimable in any taxation year by a single taxpayer is $650, meaning that the maximum credit obtainable is reached once contribution levels reach $1,275.

Unlike some other tax credit measures, the rules governing the political contribution tax credit do not permit political contributions eligible for the credit to be carried over and claimed in any previous or subsequent tax year. Consequently, all such contributions made can only be claimed on the return for the year in which those contributions were made. As well, where such contributions exceed $1,275 in any one taxation year, no tax credit can be claimed on any “excess” contributions, in either the current or any previous or subsequent tax year.

Each of the provinces and territories also provides a tax credit for political contributions made. The rules on which types of contribution are eligible for that credit, and how the credit is calculated, will differ for each jurisdiction. Information on the political contribution tax credit for the provinces and territories which held general elections in 2025 can be found on the following websites:

Many Canadians who are committed to a particular political party or candidate volunteer their time during a nomination or election campaign – canvassing for the candidate, putting up election signs, or telephoning voters to encourage them to vote for the candidate. However, in such cases, the work must be its own reward, as no income tax receipts can be issued for most such non-monetary contributions, and consequently no credit can be claimed for the value of any non-monetary contribution (including volunteer hours) donated.

Information on the federal political contribution tax credit, as well as the credit claimable in each of the provinces and territories, can be found on the Canada Revenue Agency 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/federal-political-contributions-line-40900-total-contributions-line-41000-tax-credit.html, https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/provincial-territorial-tax-credits-individuals.html, and https://www.revenuquebec.ca/en/citizens/income-tax-return/completing-your-income-tax-return/how-to-complete-your-income-tax-return/line-by-line-help/400-to-447-income-tax-and-contributions/line-414/.

How, when, and where to pay your 2025 income taxes (April 2026)

Fortunately for Canadian taxpayers, most individual income tax returns filed with the Canada Revenue Agency result in payment of a tax refund to the taxpayer. Last year, out of nearly 34 million returns filed, just over 19 million resulted in payment of a refund to the taxpayer, with the average refund being $2,000. Just over 8 million taxpayers owed money on filing to the CRA, and the remainder of returns were nil returns, resulting in neither tax owing nor payment of a refund.

The minority of taxpayers who are assessed as having tax owing have a lot of options when it comes to the available methods by which such tax can be paid, but no choice at all when it comes to the deadline by which such payment must be made. In all cases, individual income tax owed by a taxpayer for a tax year must be paid on or before April 30 of the following year. This year, that means any balance of income tax owed for the 2025 tax year must be paid on or before Thursday April 30, 2026. No exceptions and, absent unusual circumstances, no extensions.

Failing to pay one’s tax bill in full and on time can result in a significant financial cost, as the result of the CRA’s practices and policies with respect to interest charges. Interest will be levied on any outstanding amount owed for the 2025 tax year beginning on May 1, 2026. By law, the CRA charges interest at rates which are higher than current commercial rates. For the second quarter of 2026 (April 1 – June 30) the interest rate charged on overdue or insufficient tax amounts owed is 7%, and all such interest charges are compounded daily, meaning that each day interest is charged on interest levied on the previous day.

Just as it’s in the taxpayer’s interest to pay tax amounts owed on or before the April 30 payment deadline, it’s also very much in the CRA’s interest to make paying taxes as simple and straightforward as it can be. To that end, the Agency offers individual taxpayers a wide range of choices when it comes making that payment. This year there are no fewer than eleven separate options available to individual residents of Canada in paying their taxes for the 2025 tax year. The rules and procedures for the methods most frequently used by individual taxpayers are outlined below: the first four options involve payment by electronic means, while the last three describe those available to taxpayers who would prefer to make their payments in person, or by sending a cheque to the CRA.

Pay using online banking

Millions of Canadians transact most or all of their banking using the online services of their particular financial institution. The list of financial institutions through which a payment can be made to the Canada Revenue Agency is a lengthy one (available at Pay online with your bank or credit union - Payments to the CRA - Canada.ca), and includes all of Canada’s major banks and credit unions.

The specific steps involved in making that payment will differ slightly for each financial institution, depending on how their online payment systems are configured. What’s important to remember is that the nature of the payment – i.e., tax balance owed on filing, as distinct from current year tax instalment payments – must be specified, and the taxpayer’s social insurance number must be provided, in order to ensure that the payment is credited to the correct account, for the correct taxation year.

It’s not necessary to access any particular CRA form in order to make an online payment of taxes through one’s financial institution.

Using the CRA’s My Payment

The CRA also provides an online payment service called My Payment. There is no fee charged for the service, and it’s not necessary to be registered for any of the CRA’s other online services in order to use My Payment.

What is necessary is that the taxpayer have an activated debit card with a VISA Debit or Debit MasterCard logo from a participating Canadian financial institution, as My Payment is set up to accept payment using only those cards. It’s not possible to use a credit card to make a payment on My Payment; in addition, cards bearing only the Interac Debit logo, which were formerly eligible, have not been accepted for purposes of My Payment since September 2024.

Anyone intending to use My Payment should also confirm that the amount of any payment to be made is within any transaction limits imposed by their particular financial institution.

A list of participating financial institutions for each type of card, and more details on this payment method, can be found at https://www.canada.ca/en/revenue-agency/services/e-services/payment-save-time-pay-online.html.

Payment by credit card, PayPal, or Interac e-transfer

While it’s possible to pay one’s taxes using a credit card, PayPal, or Interac e-transfer, such payments can be made only through third-party service providers (that is, payments by those methods cannot be made directly to the Canada Revenue Agency), and such third-party service providers will impose a fee for the service.

There are currently only three service providers through which individual income tax amounts owed can be paid – Pay Simply, Plastique, and TelPay – and each such service provider offers different payment methods. Links to each such service are available at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-credit-card.html.

Payment by pre-authorized debit

It’s possible to set up a pre-authorized debit (PAD) arrangement with the CRA, authorizing the Agency to debit a specific bank account for an amount of taxes owed, on dates specified by the taxpayer.

Individuals who make instalment payments of tax throughout the year may already have such an arrangement in place and can certainly use that existing arrangement to schedule a PAD of any balance of taxes owed for the 2025 tax year. However, any such payments must be scheduled at least five business days before the date the payment is to be made – i.e., April 30, 2026. A taxpayer who makes a payment of taxes only once a year is likely better off using another of the available payment methods.

There is also another option for taxpayers who have their return prepared and E-FILED by an authorized electronic filer. Such taxpayers can have that E-FILER set up a PAD agreement on their behalf in order to make a “one-time” payment for a current year tax amount owed. Such an arrangement is only for the payment of a current year tax balance and can’t be used for other payments like instalment payments of tax. Details on how to set up a pre-authorized debit arrangement, whether for a single payment or for recurring payments, are outlined on the CRA website at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-authorized-debit.html.

Paying in person at your financial institution

For those who don’t use online banking, or simply prefer to make a payment in person, it’s possible to pay a tax amount owed at a bank or credit union. Doing so, however, requires that the taxpayer have a specific remittance form – the T7DR, Amount owing Remittance Voucher.

It’s possible to download and print that remittance form from the CRA website. Instructions on how to do so can be found on the website at https://www.canada.ca/en/revenue-agency/services/forms-publications/request-payment-forms-remittance-vouchers.html.

Paying at a Canada Post outlet

All Canada Post outlets can receive payments of individual income tax balances owed, in cash or by debit card, but will charge a fee for doing so. A specific form is needed to make tax payments at Canada Post outlets.

For such payments, the taxpayer must have a QR code which contains the information needed for the CRA to credit the amount paid to the taxpayer’s account.

While a QR code is sometimes included on remittance forms sent to the taxpayer by the CRA, it’s also possible to generate a QR code online through the CRA website. A link to instructions on how to do so can be found on that website at https://www.canada.ca/en/revenue-agency/corporate/about-canada-revenue-agency-cra/pay-canada-post.html.

Paying by cheque

While it’s not as common anymore, it’s still possible to pay any tax balance owed on filing by cheque, as outlined on the CRA website at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-cheque.html.

Such cheques are made payable to the Receiver-General for Canada and are mailed, together with the required remittance voucher, to the Canada Revenue Agency, using the address found on the CRA website. As is the case with payments made at a financial institution, the taxpayer can print such a remittance form from the CRA’s website. Instructions on how to do so can be found at https://www.canada.ca/en/revenue-agency/services/forms-publications/request-payment-forms-remittance-vouchers.html.

Even where the taxpayer does not have a remittance form, it’s possible to pay taxes owed by cheque. The CRA suggests that, where payment of taxes owed is made by cheque, the taxpayer should include their social insurance number on the memo line found on the front of the cheque and, in addition, provide information about the tax account (that is, 2025 income tax balance owed on filing) to which the payment should be applied. Alternatively, that information can be provided on a separate piece of paper sent in the same envelope as the cheque. Taking these steps will help ensure that the payment is credited to both the correct taxpayer and the correct tax account of that taxpayer.

A decision on what method to use to pay one’s taxes includes another very important consideration of which most taxpayers are unaware. Under longstanding Canada Revenue Agency policy, the CRA considers that a payment is actually made on the date on which it is received by the Agency. However, depending on the payment method chosen, that date of receipt usually isn’t the same day the payment is made by the taxpayer, and it can be as much as several days later. And, of course, where payment is made close to the payment deadline, that delay can mean the difference between a timely payment and one that is late and incurs interest charges.

Helpfully, the Canada Revenue Agency provides information, for each payment method, on both which types of tax payments can be made using that method and how the date of receipt is determined for that particular method. That information can be found on the CRA’s website at Canada Revenue Agency https://www.canada.ca/en/revenue-agency/services/payments-cra/individual-payments/make-payment.html.

Finally, once payment has been made, by any payment method, the CRA provides taxpayers with an online method for confirming that a payment has been received and applied to the taxpayer’s account, through the Agency’s My Account service. That service is available at https://www.canada.ca/en/revenue-agency/services/payments-cra/confirm-payment.html. Taxpayers who have not signed up for My Account can confirm that their payment has been received and applied to their 2025 tax account by calling the CRA’s Individual Income Tax Enquiries line, where an automated service at 1-800-959-8281, option 4, can provide that information.

New Quarterly Newsletters (Q2 2026)

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

What’s new for the 2025 filing season? (March 2026)

When Canadians sit down to prepare the tax return for the 2025 tax year, the forms they use will appear to most taxpayers to be identical to the ones completed at this time last year. That appearance is deceptive, as the tax return form is never the same from one year to the next. In some cases, the change is one which happens each year – the increase in taxable income brackets and tax credit amounts resulting from the indexing of those amounts for inflation. Those changes are built into the figures which appear in the return form, and the taxpayer doesn’t need to do anything in order to benefit from such changes when completing and filing the return.

That’s not necessarily the case for other tax changes. Each year, new tax measures are introduced. In addition, the rules on the computation of income can be changed and existing tax deductions and credits can be extended, changed, or withdrawn altogether. In such cases, it’s up to the taxpayer to make sure that income is accurately reported and a claim is made for every deduction and credit available under the current rules – and conversely, to ensure that claims are not made for deductions or credits for which the taxpayer is not eligible for 2025.

At the beginning of tax filing season, the Canada Revenue Agency (CRA) posts information on its website to alert taxpayers to the substantive tax changes which they will find when completing their tax return, as well as any changes made to the Agency’s administrative policies and practices which could affect taxpayers who are filing their return for 2025. Such information is also highlighted in the General Income Tax and Benefit Guide for 2025. This year, the substantive tax changes made are relatively narrow and technical in nature, affecting only taxpayers who do specific types of work, or who have specific living or health circumstances, or those who make particular types of investments. Most of this year’s changes relate to tax administration – the policies and procedures which govern the completion and filing of returns for 2025.

The changes to such administrative policies and procedures include the following.

Changes to EFILE

Most Canadian taxpayers do not prepare and file their own returns. During last year’s filing season, 60% of returns were filed using EFILE, a system in which an accredited EFILER prepares a taxpayer’s return and files it electronically with the CRA on the taxpayer’s behalf. (Individual taxpayers can also prepare and file their own tax returns electronically, but such filings are done using the CRA’s NETFILE service.)

To properly prepare and EFILE a return, the EFILER needs to have access to the information found in the taxpayer’s online tax CRA account. In previous filing seasons, such access could be gained using the “Authorize a Representative” function found in EFILE software for individuals.

That was changed beginning July 15, 2025, and an EFILER can no longer use EFILE software to request access to another taxpayer’s online tax account. Instead, EFILERS must request such online access through the “Represent a Client” function on the CRA website, and the access will be provided only once the taxpayer confirms it within their CRA account.

More information on changes to the CRA’s processes for naming and authorizing a representative can be found at https://www.canada.ca/en/revenue-agency/services/tax/representative-authorization/confirm-representative.html#individual.

Regaining access to a CRA account

For good reason, the online CRA accounts of taxpayers are protected by multiple levels of security. To access their accounts, taxpayers must enter a UserID and password. As well, at the time the taxpayer is logging in, they are sent a one-time six-digit numeric code as part of the Agency’s Multi-Factor Authentication requirement, and must enter that code.

Most taxpayers don’t log into their online CRA accounts that frequently, and so it’s not that unusual for a taxpayer to forget or mislay their login information. As well, if a taxpayer inputs the incorrect User ID or password too many times in an attempt to get it right, their online account will be locked and therefore inaccessible.

In previous years, taxpayers who were locked out of their CRA online accounts or simply forgot their login information had to call the CRA to re-establish access – a process which could take some time, especially during tax filing season.

The CRA has now instituted a self-service option which enables taxpayers to regain access to their online account where they have forgotten or misplaced their log-in credentials, have been locked out of their account, or simply want to change their sign-in options. Information on how to do that is available on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/cra-login-services/help-cra-sign-in-services/cra-userid-password.html#section3.

Change in marital status during 2025

The marital status of a taxpayer has a significant effect on the types of tax deductions and credits for which they may be eligible. Generally speaking, where a taxpayer is married (or living common-law) their eligibility, especially for tax credit or benefit programs like the Goods and Services/Harmonized Sales Tax Credit or the Canada Child Benefit, is determined, in part, by the combined income of both spouses, and is not based on individual income. As well, the ability to claim personal tax credits, like the spousal tax credit, or to make a spousal registered retirement savings plan contribution, depends on the taxpayer having a spouse at the end of the tax year.

Consequently, a change in marital status usually has an effect on one’s eligibility for a variety of tax deductions and credits and the ability to engage in particular tax planning strategies. The CRA’s listing of income tax changes for 2025 includes a reminder that taxpayers are required to inform the CRA of a change in marital status by the end of the following month after that status has changed. Where a taxpayer’s marital status changed during 2025, they must enter the date of the change on page 1 of the tax return. Taxpayers who must do so should be aware that the CRA will recalculate benefits and credits received based on the new marital status, which could mean either increased or decreased eligibility for benefits and credits.

One final point – while the general rule is that a change in marital status must be communicated to the CRA by the end of the month following the month of the change, that’s not the case where a couple separates. A separation does not generally exist (for tax purposes) until the spouses have lived separate and apart for 90 days, as the result of a breakdown in their relationship. Once that 90-day separation period has passed, the taxpayer must inform the CRA that they are now separated, and the effective date of that separation, for tax purposes, will be the date the spouses began living apart.

When it comes to substantive changes to tax rules for 2025, the only change which will affect all taxpayers is a reduction in the tax rate applied to the first income tax bracket (for 2025, income up to $57,375). Effective as of July 1, 2025, that rate was reduced from 15.0% to 14.0%. Because the change took effect mid-year, the effective tax rate for 2025 on the first income bracket is 14.5%. As with changes in tax bracket and tax credit amounts, the tax rate reduction is built into the tax return form (or tax return software), and there’s no need for the taxpayer to do anything to benefit from the change.

That’s not the case for other substantive changes to the tax system which took effect in 2025. Those changes are relatively technical and narrow in effect, but should be noted by the taxpayer groups who are affected by them. A listing of such changes, with links to the information provided by the CRA on the nature and effective date of those changes, is set out below.

For those using the Income Tax and Benefit Guide for 2025 in completing their return, each of these changes is highlighted in the Guide.

Some last-minute tax filing strategies – what (and what not) to claim (March 2026)

Most taxpayers don’t sit down to prepare their tax return for the 2025 tax year – or meet with a tax preparer to get that return done – before early in the month of March, after T4 slips have been received from their employer and the CRA’s online filing services are up and running for 2025 returns. Unfortunately, by that time, the most significant opportunities to reduce or minimize the tax bill for 2025 are no longer available. Almost all such tax planning or saving strategies, in order to be effective for 2025, must have been implemented by the end of that calendar year and the deadline for the last such major tax saving opportunity – making an RRSP contribution – was March 2, 2026.

The fact that the clock has run out on most major tax planning opportunities for 2025 doesn’t, however, mean that there are no tax-saving strategies left. At this point, there are a couple of ways to minimize the tax hit for 2025 – by claiming all available deductions and credits on the return, and also by making sure that those deductions and credits are structured and claimed in the way which will give the taxpayer the greatest tax benefit.

In some cases, a claim for a tax deduction or credit can only be made on the return for the year in which the expense is incurred, while in other cases claims can be made for expenses incurred in the previous tax year, or even as far back as five years previously. In other cases, the availability and the amount of a tax deduction or credit which can be claimed depend, in whole or in part, on the income (and tax payable) of the taxpayer making the claim.

Getting the best tax result on one’s return requires an assessment of which deductions and credits are available to claim in the current year, whether claims to be made by each spouse can be combined on a single return, whether some or all credit and deduction claims can be carried forward and claimed in a future year (or claimed in the current year by another family member), and whether it even makes sense to make the claim. To most taxpayers, it would seem that the logical approach, and the one guaranteed to create the best tax result, would be to claim every available deduction and credit as soon as it is available and to the maximum extent possible. It may seem counterintuitive, or even illogical, to not do so, but in some cases (albeit for different reasons) there are situations in which it makes sense to defer an available claim to a future year, or to transfer the claim to another family member.

Those considerations apply to two of the most common tax credit claims made by Canadian taxpayers – the charitable donation tax credit and the medical expense tax credit, and the decision on how to structure such claims doesn’t need to be made until the tax return for the year is prepared.

Charitable donation tax credit

Taxpayers are entitled to make a claim on the annual tax return for charitable donations made in the current (that is, 2025) year or any of the previous five years. The reason it can sometimes make sense not to claim a charitable donation in the year it was made arises from the way in which the charitable donations tax credit is structured in order to encourage higher donations.

For most taxpayers that credit, at both the federal and provincial/territorial levels, is a two-tier credit. Federally, the first $200 in donations receives a credit of 14.5% of the total donation, or $29. However, donations above the $200 level receive a credit equal to 29% of the donation amount over $200. (There is a third-level donation credit percentage of 33%, but that is available only to the minority of taxpayers whose taxable income for 2025 is over $253,414.)

Take, for example, a taxpayer who makes a regular contribution to a favourite charity of $100 each month, or $1,200 per year. Where they claim that donation on the annual return for 2025, that claim will result in a federal tax credit of $319 ($200 times 14.5%, plus $1,000 times 29%). Where, however, the same taxpayer defers the claim to the following year and claims a total of $2,400 in donations on a single return, they will receive a federal credit of $667 ($200 times 14.5%, plus $2,200 times 29%). Where the donations are accumulated and claimed once every five years, the federal credit received will be $1,711 ($200 times 14.5%, plus $5,800 times 29%). Under each scenario, the total charitable donation made is the same, but the amount of credit received increases with each year that the claim is deferred. Since each of the provinces and territories provide a two-tier credit (at different rates, depending on the jurisdiction), the same result will be seen when calculating the provincial/territorial credit.

As well, charitable donations made by either spouse can be combined and claimed on the return for one of those spouses, thereby increasing the amount of charitable donations available to claim and possibly the amount of credit which can be received.

It’s important, as well, to remember that the charitable donation tax credit is a non-refundable credit, meaning that it can reduce tax payable but cannot create, or increase, a refund. Consequently, in deciding which spouse will make the claim for the credit for charitable donations made by both spouses, it’s necessary to make sure that that spouse has tax payable for the year of at least the amount of the available charitable donation tax credit. Any credit amount in excess of tax payable for the year cannot be claimed and is simply lost.

Medical expenses

Notwithstanding our publicly funded health care system, there are a great (and increasing) number of medical and para-medical expenses for which coverage is not provided and which must be paid on an out-of-pocket basis. In many instances, it’s possible to claim a medical expense tax credit for those out-of-pocket costs.

For 2025, the federal credit for such expenses is 14.5% of allowable expenses. As is usually the case, the provinces and territories also provide a credit for the same expenses, albeit at different rates.

Many taxpayers, with some justification, find the rules on the calculation of a medical expense tax credit claim confusing. First, there is an income threshold imposed. Medical expenses eligible for the credit are qualifying expenses which exceed 3% of net income, or (for 2025) $2,834, whichever is less. Put more practically, for 2025, taxpayers who have net income of $94,467 or more can claim medical expenses incurred over $2,834. Those with lower incomes can claim medical expenses which exceed 3% of that lower net income. For instance, a taxpayer having $35,000 in net income could claim qualifying medical expenses incurred over $1,050 (3% of $35,000).

The other aspect of the medical expense tax credit which can be confusing is the calculation of the optimal time period. Unlike most tax credit claims, the medical expense tax credit can be claimed for qualifying expenses which were paid in any 12-month period ending during the tax year. While confusing, such rule is beneficial, in that it allows taxpayers to select the particular 12-month period during which medical expenses (and therefore the resulting credit claim) is highest. The only restrictions are that the selected 12-month period must end during the calendar year for which the return is being filed, and, of course, any expenses which were claimed on a previous return cannot be claimed again.

While only expenses which exceed the $2,834/3% threshold may be claimed, it’s also possible to aggregate expenses incurred within a family and make a single claim for those expenses on the return of one spouse. Specifically, the rules allow families to aggregate medical expenses incurred for each spouse and for each child who was under the age of 18 at the end of 2025. While medical expenses incurred by a single family member might not be enough to allow them to make a claim, aggregating those expenses can mean (especially for a family that does not have private medical insurance coverage) that total expenses will exceed the applicable threshold.

In determining who will make the medical expense tax credit claim for a family, there are two points to remember. Since total medical expenses claimable are those which exceed the 3% of net income/$2,834 threshold, whichever is less, the greatest benefit will be obtained if the spouse with the lower net income makes the claim for total family medical expenses. However, like the charitable donation tax credit, the medical expense credit is a non-refundable one, meaning that it can reduce tax otherwise payable, but cannot create (or increase) a refund. Therefore, it’s necessary that the spouse making the claim have tax payable for the year of at least as much as the credit to be obtained, in order to make full use of that credit.

Finally, the number and variety of medical expenses which an individual or family might have to pay for out of pocket are almost limitless, and the rules governing which can be claimed and in what circumstances are very specific and, often, not necessarily intuitive. In some cases, for instance, a doctor’s prescription will be required, while in others it will not. The very long list of medical expenses eligible for the credit, and any ancillary requirements, such as obtaining a prescription from a medical professional, can be found on the Canada Revenue Agency 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/lines-33099-33199-eligible-medical-expenses-you-claim-on-your-tax-return.html.

How to know you’re really hearing from the CRA (March 2026)

For most Canadians, interactions with the Canada Revenue Agency (CRA) are few and far between. In the vast majority of cases, taxpayers file a tax return each spring and either pay any tax amount owed or (in most cases) receive a refund and do not hear from or have reason to contact the Agency again until the next tax filing season. However, especially during tax season, and for the few months after the general filing deadline of April 30, there are a number of additional (legitimate) reasons why the CRA might get in touch with individual taxpayers.

Unexpected communications of any kind from the tax authorities are generally stressful for taxpayers, who often fear the worst. Such anxiety often leads taxpayers to respond quickly to whatever request is being made, but that’s not the right response. Any unsolicited communication from the CRA should first prompt the taxpayer to verify that such communication is, in fact, legitimate and not part of a fraud or scam to part the taxpayer from their money.

Such frauds and scams aren’t new, but they are becoming both more numerous (there are currently warnings about 18 separate tax and benefit scams listed on the Agency’s website, and there are undoubtedly more which have not yet come to light) and more successful. The reasons why lie, for the most part, in changes in technology and in how we now communicate on personal, business, and tax matters. Most Canadians now carry out most of their communications using technology that didn’t exist a generation or two ago. The sheer volume of such communications, and especially the fact that providing a more or less instant response has become the norm, has made scams and frauds much easier to carry out. A fraudster who sends out thousands of fraudulent text messages asking the recipient to click on a link which then provides access to that individual’s personal or banking information needs to succeed in only a few instances in order to make the fraud profitable. Adding to the risk is the fact that the CRA, as part of its move toward online and electronic communication with taxpayers, now utilizes nearly every available form of e-communication. The CRA contacts taxpayers by phone call, automated voice message, letter, text message, email, and online (through its website service My Account). About the only forms of communication that the CRA doesn’t use are social media sites like What’sApp and Facebook Messenger. And now, Generative AI has enhanced the ability of even unsophisticated scammers to produce communications purportedly from the CRA which are harder and harder to distinguish from the real thing.

It’s clear, from all of this, that the first response to any communication received from the CRA should be to NOT respond until that communication can be verified as authentic. And while that’s not always easy to do, there are practices which, if followed, can minimize the risk – and other practices which should always be avoided.

No matter the form of communication, or how urgent or time-sensitive that communication claims to be, taxpayers should NEVER:

Provide or share any personal or financial information, whether over the phone, by text, by email, or on a website, to any person or organization claiming to be from the CRA (even if call display on a phone call indicates that the person is calling from a number belonging to the Agency, as such phone numbers can be spoofed). Taxpayers who receive an unsolicited phone call from someone claiming to be from the CRA can ask the caller for their name, office location, and a number at which they can be reached. It’s then possible to use a service on the CRA website to verify whether or not that callback number is, in fact, one used by the CRA. That service, called Verify a CRA number, can be found on the Agency’s website at https://www.canada.ca/en/revenue-agency/corporate/scams-fraud/verify-cra-contact.html. If the caller refuses to provide a name, office location, and callback number, it’s not the CRA calling.
Click on any link (whether to a form or a website) contained in a text message or unsolicited email. While the CRA does use texts and emails to communicate, it does so only for very specific purposes. The CRA will send a text to a taxpayer only as part of its multi-factor authentication service used when the taxpayer is logging into their CRA account, and then only to provide a six digit one-time numeric code to be entered on the website. Any other kind of text is not from the CRA. Similarly, the Agency does send emails to taxpayers, but in only two specific circumstances: where the taxpayer has registered for email notifications and has a new message to view in their CRA online accounts, or where the taxpayer has asked, during a previous meeting or call with a CRA representative, that a CRA link to a form or publication be sent to the taxpayer by email.

Tax scams and frauds are generally successful for two reasons. First, the communications employed to carry out such scams and frauds are structured to be very similar to legitimate communications which could very well have come from the CRA. For instance, the CRA does contact taxpayers, as part of its return verification program, to request that the taxpayer provide proof of claims made on their return – for example, verification of amounts paid for childcare expenses. A taxpayer who receives a text message or email that looks legitimate and requests that they click on a link to confirm such amounts paid isn’t likely to jump first to the conclusion that the communication is fraudulent. Second, fraudulent communications very often inform the taxpayer that they are owed a tax refund by the CRA or are eligible for payment of a new government benefit or tax credit amount. It’s human nature to welcome receipt of unexpected income, and our tax and benefit system is sufficiently complex that most individuals wouldn’t be surprised to hear that they were eligible for refunds, benefits, or tax credits of which they were unaware, and don’t think to question it. Conversely, such fraudulent communications may tell the taxpayer that they owe money to the tax authorities and that significant interest and penalty charges will accrue unless and until payment in full is made. Often, the message includes sufficient dire warnings of the negative financial consequences of such debts (like garnishment of wages, damage to one’s credit rating, or even criminal charges) as to intimidate the taxpayer into making a quick payment, without taking the time to verify the authenticity of the request.

The best defence against becoming a victim of such tax scams and frauds is two-fold: first, never disclose personal or financial information in response to a communication of any kind which purports to be from the CRA, and never click on any link provided in a text or unsolicited email communication received (ostensibly) from the Agency. Where an unsolicited phone call is received, the taxpayer should follow the steps outlined above to verify the authenticity of the call and, if still uncertain, should call the CRA directly (using the Individual Income Tax Enquires line at 1-800 959-8281) to determine whether the call was, in fact, from the Agency. Where any communication is received containing a website link or address, the CRA’s advice is that the recipient should look up the official web address and then type it directly into a browser, and never click on the link. The CRA points out that many such links include a website address which is strikingly similar to real government website addresses, differing by only one or two characters, and leading the recipient to conclude that the communication is legitimate, when it is not.

The other defence against tax scams and frauds is to be aware of what the CRA does and does not do when communicating with taxpayers.

The CRA will not:

Send refunds or payments by e-transfer or text message;
Provide or accept payments by cryptocurrencies;
Demand or pressure immediate payment by:
- Interac® e-transfer,
- Cryptocurrencies,
- Prepaid credit cards,
- Gift cards from any type of retailer;
Threaten to deport or arrest you, or put you in prison;
Use aggressive or threatening language;
Set up an in-person meeting in a public location to collect a payment;
Charge a fee to speak with a call centre agent;
Ask for personal or financial information in a voicemail or email.

Any communication which includes any of these requests, threats, or actions is, by definition, fraudulent and should be ignored and/or deleted, without replying or clicking on any link.

Given all of the above, taxpayers can legitimately feel that they are at a significant disadvantage when it comes to not falling prey to a tax scam or fraud. However, avoiding that result is made much easier by remembering that there is NO legitimate communication from the CRA which requires a response within minutes or hours or even days. There is always time and opportunity to verify the source and legitimacy of any communication received, regardless of the method of communication. When money is lost to a tax scam or fraud, it is rarely recovered; avoiding immediate responses and taking the time to verify the authenticity of any communication which claims to be from the CRA will go a long way to ensure that the taxpayer doesn’t find themself in that unhappy position.

The CRA provides detailed information on its website on how to handle phone calls claiming to be from the Agency and on recognizing and avoiding tax scams and frauds. That information can be found at https://www.canada.ca/en/revenue-agency/corporate/scams-fraud/verify-cra-contact.html and at https://www.canada.ca/en/revenue-agency/corporate/scams-fraud/recognize-scam.html.

How, when and where to file your 2025 tax return (March 2026)

Canada’s tax system is a self-reporting one which depends almost entirely on the voluntary compliance of Canadian taxpayers. Almost every Canadian is required to complete and file a tax return annually and, while it’s likely that few of them look forward to doing so, the rate of voluntary compliance among Canadian taxpayers is actually very high. Last year, nearly 34 million individual income tax returns (for the 2024 tax year) were filed with the Canada Revenue Agency (CRA).

This year, most Canadian taxpayers are required to file a return for the 2025 tax year on or before Thursday, April 30, 2026. Self-employed taxpayers and their spouses, however, have until Monday, June 15, 2026 to file their returns for 2025.

It’s important to note that, regardless of the applicable tax return filing deadline, all Canadian individual taxpayers must pay any balance of tax owed for the 2025 tax year on or before Thursday April 30, 2026. There are no exceptions to this deadline and, absent very unusual circumstances, no extensions are possible. Where taxes owed for 2025 aren’t paid in full on or before the April 30, 2026 deadline, interest charges will begin to accrue beginning on May 1.

Interest charges levied by the CRA on unpaid tax amounts can be significant, for two reasons. First, by law, the prescribed interest rate levied by the Agency is higher than ordinary commercial rates. That prescribed interest rate is set quarterly and the applicable rate for the second calendar quarter of 2026 (April 1 to June 30) is 7%. Second, all interest charges levied by the CRA on unpaid tax amounts are compounded daily, meaning that on each successive day interest is levied on interest amounts that were charged for the previous day.

A summary of filing and payment due dates for returns for the 2025 tax year can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/important-dates-individuals.html.

In order to determine whether there will be a tax balance owed on filing for the 2025 tax year it is, of course, necessary to complete and file a return for 2025. And, while there is little to no flexibility with respect to the deadlines by which returns must be filed and tax amounts owing paid, taxpayers do have choices when it comes to how to get their tax return completed and filed.

For the vast majority of Canadian taxpayers, that means paying someone else to complete and file the return. Canada’s tax system has a well-deserved reputation for complexity, and it seems most Canadians feel either unable or unwilling to tackle the chore of completing their tax return themselves.

Most such Canadians choose to file their return for the year using the CRA’s EFILE service – last year, 60% of returns filed were filed through EFILE. Where a taxpayer chooses to file using EFILE, their return is filed online by a third party, who must be certified as an EFILER by the Canada Revenue Agency. Such EFILE services are provided by accountants, by tax preparation services which operate either year-around or only during tax filing season, or by tax discounters. Almost always, the E-FILE service provider also prepares the return which they are filing.

Taxpayers who wish to use EFILE to file their return for the 2025 tax year can find information on using a tax return preparation service on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/efile-individuals.html. That website also provides a current listing (searchable by postal code) of certified E-FILE service providers across Canada; the listing can be found at https://apps.cra-arc.gc.ca/ebci/efes/epcs/prot/ntr.action.

Taxpayers who want to file online and are able and willing to prepare their own tax returns can use the CRA’s NETFILE service (which was available for the filing of returns for 2025 as of Monday, February 23, 2026); information on that service can be found at https://www.canada.ca/en/services/taxes/income-tax/personal-income-tax/how-file/tax-software/send-return/netfile.html. While there are some kinds of returns which cannot be filed using NETFILE (for instance, a return for a non-resident of Canada, or for a deceased taxpayer), the vast majority of Canadians who wish to do so will be able to NETFILE their return.

A return can be filed using NETFILE only where it is prepared using tax return preparation software which has been certified by the CRA. While such software can be found for sale just about everywhere at this time of year, approved software which can be used free of charge, or for a nominal charge, is also available. A listing of third-party tax return software certified for use in preparing individual returns for 2025 is maintained (with links to the software product websites) on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/netfile-overview/certified-software-netfile-program.html.

A smaller but still significant number of Canadians prefer to complete their tax return on paper: last year, just under two and a half million returns were prepared and filed in this way. The CRA has, for many years, been urging Canadian taxpayers to file their returns online and, at the same time, has reduced the options available to Canadians who wish to obtain a tax guide and return package in hard copy. For instance, the CRA previously mailed a tax guide and return package to taxpayers who had paper-filed in the previous year; this year, however, it has discontinued that practice.

Notwithstanding those difficulties it is still possible to obtain hard copy of the tax guide and return, in the following ways.

The first method is to go onto the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package.html, select the return for your province or territory of residence as of the end of 2025, and then download and print that document.

Those who do not wish to or cannot download or print a hard copy of the return package can order a tax return package online at https://apps.cra-arc.gc.ca/ebci/cjcf/fpos-scfp/pub/rdr. That package will then be sent to the taxpayer by regular mail.

Finally, it’s still possible to order hard copy of the return package by calling the CRA’s automated forms and publications line at 1-855-330-3305. That line is available from 6 a.m. to 3 a.m. Eastern Time, 7 days a week. This year, for the first time, taxpayers who request a form or publication through the automated telephone service are required to provide their social insurance number in order to receive that service.

Finally, taxpayers who are unable or unwilling to complete and file the 2025 tax return on their own but lack the financial wherewithal to pay someone else to do so have another option. Volunteers at a number of Community Volunteer Income Tax Clinics across the country will prepare and file simple returns on behalf of lower-income taxpayers, free of charge. Those Community Volunteer Income Tax Clinics are generally found in community centres or libraries, and a searchable database listing such Clinics across Canada can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/community-volunteer-income-tax-program.html.