What's New for 2026
Every year the CRA adjusts the brackets, limits, and ceilings, and every so often the rules themselves change. Here's the 2026 tax year in one place: what applies to the income you're earning right now, filed in spring 2027. Last reviewed August 2026.
Rates & Brackets
What You Pay in 2026
The lowest federal rate is now 14%, for the full year
The federal rate on the first bracket dropped from 15% in mid-2025, which made 2025 a blended 14.5% year. 2026 is the first full year at 14%, and it applies to your first $58,523 of taxable income. Most people will see the difference as slightly lower payroll withholding rather than a bigger refund.
Federal brackets move up 2%
For 2026: 14% to $58,523 · 20.5% to $117,045 · 26% to $181,440 · 29% to $258,482 · 33% above that. If your raise this year was under 2%, you haven't moved up a bracket: the brackets moved with you.
More income before any federal tax
The basic personal amount rises to $16,452, and income below that attracts no federal tax at all. Higher earners see it phase down above $181,440, bottoming out at $14,829 past the top bracket.
Ontario brackets move too, mostly
Ontario's first two thresholds are indexed 1.9% for 2026: 5.05% to $53,891 and 9.15% to $107,785. The 11.16% ($150,000) and 12.16% ($220,000) thresholds are not indexed and stay put, as they do every year. Rates themselves are unchanged.
Contribution Room
Registered Account Limits
RRSP limit rises for 2026
Your new deduction limit is 18% of your 2025 earned income, to a maximum of $33,810, plus any unused room carried forward, less any pension adjustment. Your exact number is on your latest notice of assessment. Wondering what a contribution saves you? Run the numbers.
TFSA adds another $7,000
The annual TFSA limit holds at $7,000 for 2026. If you've never contributed and have been eligible since 2009, your cumulative room is now $109,000. Withdrawals from last year came back as room on January 1.
FHSA stays at $8,000 a year
The First Home Savings Account limits aren't indexed: $8,000 a year, $40,000 lifetime. One quirk worth repeating: unlike an RRSP, FHSA contributions only deduct in the calendar year you make them. A December contribution counts for 2026; a January one doesn't.
Payroll Ceilings
CPP & EI for 2026
CPP pensionable earnings ceiling rises
The year's maximum pensionable earnings (YMPE) moves to $74,600, with the basic exemption unchanged at $3,500. The second ceiling (CPP2) is set 14% higher at $85,000, and earnings between the two attract a further 4% employee contribution, to a maximum of $416.
EI insurable earnings ceiling rises
Maximum insurable earnings climb to $68,900 for 2026. The employee premium rate is $1.63 per $100 of insurable earnings, for a maximum premium of $1,123.07. If you cross the ceiling mid-year, deductions simply stop, with nothing for you to do.
Rule Changes
What Changed, and What Didn't
Capital gains inclusion rate stays at one-half
The proposed increase to a two-thirds inclusion rate was cancelled, and gains remain 50% taxable. One related change did survive: the lifetime capital gains exemption on qualified small business shares and farm or fishing property is $1.25 million.
A new credit for personal support workers
The fall 2025 federal budget introduced a temporary refundable credit for eligible personal support workers: 5% of eligible earnings, up to $1,100 a year. If you work in home or community care, it's worth confirming your eligibility when we prepare your return.
Since the Filing Season
What Changed Mid-Year
Every CRA drop box closed for good
All 45 locations across Canada shut permanently on May 29, 2026, after the filing season ended. Paper now goes by mail, which is slower, or through your CRA account, which isn't. If dropping documents off was your habit, this is the year it stops working.
Registering a business now needs a CRA account first
Business Registration Online moved behind a sign-in, and phone registration ended back in November 2025. So getting a business number, a GST/HST account, or a payroll account means having the account already, and identity verification by mailed security code can take ten business days. Plan that in rather than discovering it. How to set the account up.
The disability tax credit application route changed
Your CRA account's "submit documents" feature no longer accepts DTC applications unless the CRA has already asked you for more on an open file. Applications go through the digital DTC form or by mail. A second date follows: from September 8, 2026, versions of Form T2201 issued before 2023 are refused outright, so check which version you're holding before filling it in.
The fuel excise holiday runs out
The federal excise tax on gasoline, diesel, and aviation fuel was suspended from April 20 to September 7, 2026 — roughly 10¢ a litre on gasoline and 4¢ on diesel. It's a price at the pump, not a line on your return, but if you claim vehicle costs against business or employment income, your fuel receipts from that window are genuinely lower and your logbook should show why.
The Underused Housing Tax is repealed
Legislation passed in March 2026 eliminated the UHT for 2025 and every year after: no return, no tax, permanently. The catch is that 2022 through 2024 still stand, penalties and interest included, so an unfiled year from that window doesn't go away on its own. Provincial and municipal vacancy taxes are separate and unaffected.
Interest on overdue tax is still 7%
The CRA sets these quarterly. For the third quarter of 2026 the rate on overdue tax, CPP, and EI stayed at 7%, and it compounds daily. The prescribed rate for family loans and low-interest employee loans held at 3% for a fifth straight quarter. Worth knowing: interest charged on a balance owing is not deductible.
Crypto platforms start reporting to the CRA
Canada adopted the OECD's Crypto-Asset Reporting Framework from January 1, 2026. Exchanges and other crypto service providers are recording customer and transaction detail through this year and reporting it to the CRA in 2027. Practically: assume your 2026 activity will be visible. If earlier years were never reported, this is the year to fix that voluntarily rather than after a letter arrives. Our crypto service page covers how we handle it.
Figures are the CRA's published 2026 amounts, verified against official sources in August 2026, but limits and rules can change in-year, and none of this is advice for your specific situation. Interest rates in particular are reset every quarter. Planning a contribution? Start with the RRSP calculator, or check the deadlines that go with these numbers.