What's new for 2025?

All references to the ‘Act’ mean the Income Tax Act, RSC 1985, c. 1 (5th Supp.), as amended. All references to the ‘Regulations’ mean the Income Tax Regulations. The following should not be construed as legal nor tax advice. Consultation with your usual tax/legal professional is advised.

Good morning Toronto! Here's what's breaking news on Canada's financial forefront this week.

On Monday, 24 February 2025 at 6AM EST, the NETFILE and eFILE services will open for individuals and tax professionals to file their T1 (Personal Income Tax and Benefit Return) for the 2024 Tax Year. Here's what's new:

There are minor bumps to the Basic Personal Amount (the amount of money you can make before being taxed), to $16,129 and $12,747 for the federal and provincial portion of your tax return respectively. This year, the TFSA limit remains unchanged, at $7000.

Note that on 1 Jan 2024, employers and employees started to contribute an additional 4% on earnings above the first earnings ceiling (called the Year’s Maximum Pensionable Amount, YMPE, or CCP1) to the second earnings ceiling (called the Year’s Additional Maximum Pensionable Amount, YAMPE, or CPP2). For 2025, the CPP1 ceiling is $71,300, less a $3,500 personal exemption and the CPP2 ceiling is $81,200. The contribution rates are 5.95% for CPP1 and 4% for CPP2, for a maximum contribution of $4,034.10 and $396 respectively. (Double the contribution amounts if you are self-employed. As a reminder, minors are exempt from paying into CPP, and can expect a refund if their employer(s) deducted CPP from their paycheque.)

The maximum insurable earnings for Employment Insurance (EI) is $65,700. The annual premium is 1.64%, to a maximum of $1,077.48.

Are you a gig worker? Do you offer your services on freelance platforms, sell goods online, rent your home/property, or offer ridesharing/food deliveries through online platforms (such as Fiverr, eBay, Uber, etc)? These platforms are now required to report certain identifying information about you (like your SIN number and income earned) to Revenue Canada if you make over certain prescribed limits on these platforms.

Attention all NPOs and Corporations: The CRA recently amended the Income Tax Regulations (ITRs) of the Income Tax Act (ITA) to remove the T2 (Corporate Tax Return) filing exemption for Canadian resident corporations with Annual Gross Revenues (AGRs) under $1 million. Under these new rules, all Canadian corporations (including provincially/federally incorporated NPOs) MUST file T2 Corporate Tax Returns, regardless of income. Note that NPOs are exempt from taxes under §149.1(l) of the ITA, and can instead file the simplified T2SHORT.

That's all for tax season! For individuals, make sure to collect those tax slips and file by 30 April 2025 (if you are anticipated to owe taxes) to avoid late-filing penalties!

How can we help? KLee Tax specializes in filing tax returns for individuals, businesses, and corporations. Whether you are working your first job, running a business, or an NPO looking to make a difference, you can be sure that KLee Tax will be there for your tax needs, when and where you need us.

Unsure of where to start? Be sure to reach out below!