By Olev Edur
Yes, it’s time once again for your annual reckoning with the taxman. Before we look at the changes to 2024 tax returns, a caveat is in order. At press time in February 2025, it appeared that a federal election would be taking place this year. Given that some of the provisions affecting your federal return may not have been passed into law, there’s a possibility that they’ll never see the light of day. In particular, the provisions relating to the rural supplement to the Canada Carbon Rebate (CCR) could be in jeopardy.
The tax bracket thresholds as well as the amount of most tax credits used for calculating your taxes will have changed for 2024 as a result of their being indexed to inflation; federal figures rose 4.5 per cent over levels that applied in 2023, while provinces may have used different rates for their adjustments. Nova Scotia is the exception, as it applies no indexation to its tax structure.
In addition, a few provinces made some further changes to their tax regimes for 2024:
• Prince Edward Island completely rejigged its personal tax rate structure, providing modest rate reductions at income levels up to $140,000 and adding a new tax bracket that, along with other rate adjustments, results in higher taxes for those with incomes above that level.
• Manitoba significantly increased (from $36,842 in 2023 to $47,000 for 2024) the income level up to which the lowest marginal tax rate applies, providing some tax relief for low-income earners.
• Ontario changed its personal income tax brackets as well as the amount of most provincial non-refundable tax credits. In addition, the province’s alternative minimum tax was reduced.
The rural supplement to the CCR has been doubled to 20 per cent as of April 2024. If this applies to you, be sure to tick the box on page 2 of the return.
For those still working in January 2024, an additional Canada/ Quebec Pension Plan contribution of four per cent is required from employees and employers on pensionable earnings in excess of the year’s “maximum pensionable earnings” but not more than the year’s “additional maximum pensionable earnings.” These amounts are included in box 16A (CPP) and box 17A (QPP) of your T4 slip.
Self-employment income is subject to an eight per cent additional contribution rate. For more information, see Schedule 8 of your tax package or go to canada.ca/fed-tax-information.
As of January 1, 2024, workers age 65 or older can choose to stop contributing to the QPP if they receive a QPP or CPP retirement pension. In addition, the requirement to contribute to the QPP for workers age 72 or older will end as of the year they turn 73. All wages paid and earnings received as of January 1 of the year a worker turns 73 will no longer be subject to QPP contributions.
