Income Tax Update 2024

Tax Updates for 2024: What You Need to Know

As we enter 2024, several key tax changes may impact individuals and families across Canada. Here’s a summary of the most significant updates to help you navigate the new tax landscape effectively.

Alternative Minimum Tax (AMT)

Starting in 2024, updates to the AMT calculation include:

• A higher minimum tax rate and basic exemption threshold.

• Adjustments to taxable income calculations for AMT purposes.

• Changes to the special foreign tax credit and minimum tax carryover.

• A cap on the value of most non-refundable tax credits.

If you’re subject to AMT, refer to Form T691 to calculate your federal tax payable.

Canada Carbon Rebate (CCR)

Expanded eligibility for rural supplements: Starting in April 2025, individuals living in rural areas or small population centres (fewer than 30,000 residents) within census metropolitan areas will qualify for the CCR rural supplement. Eligibility will be determined using census data from Statistics Canada.

Canada Child Benefit (CCB)

Beginning in 2025, parents will be eligible to receive the CCB for up to six months after the death of a child, provided they meet other eligibility requirements. This extension also applies to the Child Disability Benefit. Parents must notify the CRA of the child’s passing before the end of the month following the child’s death.

Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) Enhancements

Effective January 2024:

• Second additional contributions: Employees and employers must contribute 4% on pensionable earnings exceeding the year’s maximum pensionable earnings up to the year’s additional maximum pensionable earnings.

• Self-employed individuals: Required to contribute 8% on these earnings.

For Quebec workers:

• Individuals aged 65+ receiving a QPP or CPP retirement pension can opt out of QPP contributions.

• Contributions are no longer required starting the year a worker turns 73.

  
  

Capital Gains

From June 25, 2024, the capital gains inclusion rate will increase to two-thirds, but a reduction will keep the effective inclusion rate at one-half for gains under $250,000 after June 24, 2024. Other updates include:

• A higher lifetime capital gains exemption.

• New deductions for qualifying business transfers and additional security options.

  
  

Home Buyers’ Plan (HBP)

For withdrawals after April 16, 2024, the HBP limit has increased from $35,000 to $60,000. Temporary repayment relief allows participants making their first withdrawal between 2022 and 2025 to defer repayments by an additional three years, starting in the fifth year after the withdrawal.

Mineral Exploration Tax Credit

Eligibility for this credit has been extended to agreements made before April 2025, with expenses incurred by 2026.

Digital Platform Reporting Rules

Digital platforms facilitating gig economy activities or rental services must report seller information to the CRA for the 2024 calendar year. Reportable sellers will receive an annual statement by January 31, 2025, to assist with tax filing.

Short-Term Rentals

As of January 2024, expenses related to non-compliant short-term rental properties are no longer deductible. Ensure compliance to continue claiming rental expenses.

Volunteer Tax Credits

The Volunteer Firefighters’ Amount and Search and Rescue Volunteers’ Amount have doubled to $6,000 for individuals completing 200+ hours of eligible service in a year.

These changes reflect ongoing efforts to modernize tax policies and encourage compliance. For further details, visit the Canada Revenue Agency website or consult a tax professional.