If you’re like most Canadians, tax season probably isn’t your favorite time of year. But 2026 brings some changes that might actually put a smile on your face—along with a few new rules you’ll want to know about before filing.
The Canada Revenue Agency is rolling out some of the biggest tax changes we’ve seen in years. Whether you’re earning your first paycheck, running a business, or planning for retirement, these updates will affect how much you pay (or save) and how you interact with the CRA.
I’ve spent the past few weeks digging through the details, and I’m going to break it all down for you in plain English. No accounting jargon, no confusing tables—just the information you actually need.
The Big Win: Your Taxes Are Going Down
Let’s start with the good news. Remember when the government announced they were cutting taxes for the middle class? Well, 2026 is when that promise actually hits your bank account.
The lowest federal tax rate dropped from 15% to 14% back in July 2025. That might sound like a small change, but 2026 is the first full year you’ll benefit from it. And here’s the thing—this cut applies to everyone who pays federal income tax. Whether you’re making $30,000 or $300,000, you’ll see some savings.
Here’s what the new tax brackets look like:
- $0 to $58,523: You pay 14% (down from 15%)
- $58,524 to $117,045: You pay 20.5%
- $117,046 to $181,440: You pay 26%
- $181,441 to $258,482: You pay 29%
- Over $258,482: You pay 33%
What does this mean in real dollars? If you’re earning $60,000 a year, you’ll save about $585 in federal taxes compared to the old rates. That’s not life-changing money, but it’s definitely enough to cover a few nice dinners or help with groceries.
The government also bumped up the Basic Personal Amount—that’s the income you can earn tax-free—to $16,452. Up from $16,129 last year, this means you keep more of what you earn before the tax man comes calling.
You’ll Need Stronger Security to Access Your CRA Account
Here’s one change that might catch you off guard if you’re not prepared: starting this February, the CRA is requiring everyone to set up a backup authentication method for their online account.
I know, I know—another password, another security step. But after seeing so many people get locked out of their accounts over the years, I actually think this is a good move.
When you log into your CRA MyAccount this tax season, you’ll be prompted to add a backup option before you can see your information. You have two choices:
- A passcode grid (it looks like a bingo card with random codes you save or print)
- An authenticator app (like Google Authenticator or Microsoft Authenticator—they’re free)
One important note: you can’t use your phone number as a backup. You can still use it as your primary login method, but you need one of the two options above as a backup.
My advice? Set this up now. Don’t wait until April when you’re rushing to file your taxes and suddenly can’t access your account. It takes five minutes, and you’ll thank yourself later.
If you use the passcode grid option, mark your calendar—it expires after 18 months. When it’s about to expire, log in and generate a new one. Otherwise, you’ll be calling the CRA to unlock your account, and trust me, nobody wants to be on hold during tax season.
Big Changes for Trucking Companies
If you own or work with a trucking company, pay attention to this one. The CRA has ended a 14-year grace period on reporting requirements, and they’re serious about enforcement now.
Since 2011, trucking businesses have been supposed to file T4A slips for payments over $500 made to Canadian-controlled private corporations. But the CRA wasn’t penalizing companies that didn’t comply—until now.
Starting with the 2025 tax year (filed in 2026), penalties are back in force. These aren’t small fines either. Depending on how many slips you’re missing and how late you are, you could face penalties ranging from $100 to $7,500.
The deadline for filing these T4A slips is March 2, 2026 (since February 28 falls on a Saturday). You need to report payments in Box 048 and file a T4A Summary with the CRA. Don’t include GST/HST in your reported amounts.
Why the crackdown? The government is tackling something called the “Driver Inc.” scheme, where some companies misclassify employees as independent contractors to avoid paying proper benefits and taxes. They’re investing $77 million over four years to enforce compliance, so this isn’t going away.
Say Goodbye to Automatic Tax Packages in the Mail
If you’re still filing on paper (and about 7% of Canadians are), here’s a change that affects you: the CRA isn’t automatically mailing out those big tax packages anymore.
Starting this year, if you want paper forms, you need to request them. You can do this three ways:
- Order online at canada.ca/cra-forms
- Call the automated line at 1-855-330-3305 (you’ll need your SIN)
- Download and print them yourself
Give yourself at least 10 business days if you’re ordering by mail. I’ve heard from friends who requested forms late and ended up scrambling, so plan ahead.
Also, the CRA removed several schedules from the basic package to cut down on paper waste. If you need Schedule 2 (amounts from your spouse), Schedule 3 (capital gains), or any of the other common forms, you’ll need to grab those separately.
Honestly, if you’re comfortable with computers at all, I’d recommend trying online filing. It’s faster, you get your refund quicker, and you don’t have to worry about forms getting lost in the mail.
Your Retirement Savings Limits
Let’s talk about the accounts you’re using to save for the future. The good news: most limits are staying steady or increasing.
TFSA (Tax-Free Savings Account): The annual limit holds at $7,000 for 2026. But here’s what’s exciting—if you’ve never contributed to a TFSA and you were 18 or older in 2009, you now have $109,000 in total contribution room. That’s a significant amount of tax-free growth potential.
RRSP (Registered Retirement Savings Plan): The 2026 contribution limit jumped to $33,810, up from $32,490 last year. Remember, you have until March 2, 2026 to make contributions that count for your 2025 tax return.
FHSA (First Home Savings Account): If you’re saving for your first home, the annual contribution limit stays at $8,000, with a lifetime maximum of $40,000.
One tip I always share: if you’re trying to decide between TFSA and RRSP contributions, think about your tax situation now versus retirement. The RRSP gives you a deduction now but you’ll pay tax when you withdraw. The TFSA doesn’t give you a deduction, but your withdrawals are completely tax-free. For most young people in lower tax brackets, the TFSA often makes more sense.
CPP and EI: What’s Changing with Your Paycheques
If you’ve noticed your paycheques feeling a bit lighter lately, CPP contributions are partly to blame. The government is in the middle of enhancing CPP, which means higher contributions now but better benefits when you retire.
For 2026:
- Maximum pensionable earnings increased to $74,600 (up from $71,300)
- The additional earnings ceiling rose to $85,000
- You’ll contribute 5.95% on earnings up to the first threshold
- Plus 4% on earnings between the two thresholds
If you’re earning at or above these levels, your maximum CPP contribution is now $4,646.45 for the year. Your employer matches this amount.
The Employment Insurance premium rate actually dropped slightly to $1.63 per $100 of insurable earnings (down from $1.64). But the maximum insurable earnings increased to $68,900, so if you’re a higher earner, you’ll still pay a bit more overall—up to $1,123.07 for the year.
The Capital Gains Drama: What Actually Happened
This topic caused so much confusion over the past two years that I want to set the record straight once and for all.
There was a lot of talk about increasing the capital gains inclusion rate from 50% to 66.67%. This had investors and business owners seriously worried about their tax bills. But here’s what actually happened:
The inclusion rate increase was cancelled entirely. On March 21, 2025, Prime Minister Carney announced they were scrapping the proposal. The rate stays at 50% for 2026 and beyond.
What did change was the Lifetime Capital Gains Exemption. This increased from about $1 million to $1.25 million, retroactive to June 25, 2024. If you’re selling a small business, farm, or fishing property, this higher exemption is great news. Plus, it’s now indexed to inflation starting this year.
The trade-off? They cancelled the Canadian Entrepreneurs’ Incentive that would have reduced the inclusion rate to one-third on up to $2 million in gains for qualifying business owners. The government said the higher exemption replaces this benefit.
Disability Supports: Expanded Deductions
If you claim the disability supports deduction, you’ll be happy to know the list of eligible expenses expanded for 2025 and 2026. The CRA added several new items you can claim:
- Alternative input devices for computers
- Attendant care services
- Bed positioning devices
- Digital pen devices
- Ergonomic work chairs
- Memory or organizational aids
- Mobile computer carts
- Navigation devices for those with visual impairments
- Service animals
Most of these require a prescription or written certification from a medical practitioner. Only the person with the disability can claim the deduction, but it can make a real difference in reducing your tax bill.
Government Benefits Are Going Up
If you receive government benefits, here are the 2026 amounts:
Canada Child Benefit:
- Up to $8,157 per year for kids under 6
- Up to $6,883 per year for kids aged 6-17
- Child Disability Benefit increased to $3,480
GST/HST Credit:
- $356 for adults (up from $349)
- $187 for each child
- $187 single supplement
Canada Workers Benefit:
- $1,665 maximum for single individuals
- $2,869 maximum for families
- $860 disability supplement
These amounts are indexed to inflation, which is why they’re increasing. It’s not a huge jump, but every bit helps with the cost of living.
If You Drive for Work: Updated Mileage Rates
Claiming mileage for work-related driving? The rates went up slightly for 2026:
- First 5,000 km: $0.73 per kilometer (provinces)
- Additional kilometers: $0.67 per kilometer
- Territories get higher rates: $0.77 and then $0.67
If you’re buying a vehicle for business, the capital cost allowance ceiling for regular vehicles increased to $39,000. Zero-emission vehicles stay at the higher $61,000 ceiling, which makes sense given their higher purchase prices.
A Few Other Changes Worth Noting
Underused Housing Tax is Gone: If you owned certain residential properties, you might have been filing UHT returns. Good news—this tax is eliminated starting with 2025. No more annual filings. However, if you owed returns for 2022, 2023, or 2024, you still need to complete those.
Haida Gwaii Gets Northern Benefits: Residents of Haida Gwaii can now claim full northern residents deductions. The islands were reclassified from intermediate to northern zone for tax purposes, meaning better deductions for residency and travel.
Fuel Charge Credit Ended: The Return of Fuel Charge Proceeds to Farmers Tax Credit is done. The 2024-2025 fuel charge year was the last one, since the federal fuel charge ended on April 1, 2025.
Mark Your Calendar: Important Dates
Here are the key deadlines you need to remember:
- January 20, 2026: You can start ordering tax packages
- February 2026: Backup MFA becomes mandatory for CRA accounts
- March 2, 2026: RRSP contribution deadline for 2025 tax year
- March 2, 2026: T4A filing deadline for trucking industry
- April 30, 2026: Income tax filing deadline for most Canadians
The Bottom Line
These 2026 tax changes bring a mix of good news and new responsibilities. Most Canadians will save money thanks to the tax rate reduction. Your retirement savings limits are holding steady or increasing. Government benefits are going up with inflation.
But you’ll also need to adapt to new security requirements, especially if you haven’t set up backup authentication for your CRA account yet. And if you’re in the trucking industry, compliance is now mandatory with real penalties attached.
My biggest piece of advice? Don’t wait until the last minute. Set up your CRA security now. Review your RRSP contribution room and make a plan. If you’re a business owner, make sure you understand the new reporting requirements.
Tax season doesn’t have to be stressful if you’re prepared. Take an hour this weekend to get your accounts in order, gather your documents, and mark these deadlines on your calendar. Your future self will thank you when everyone else is panicking in late April.
Have questions about how these changes affect your specific situation? That’s what accountants are for. A good tax professional can often save you more than they cost, especially if you have a complex tax situation. And if you’re doing it yourself, the CRA website actually has some helpful tools and calculators—just make sure you’re looking at 2026 information, not old tax years.
Here’s to a smoother, less stressful tax season in 2026.
Disclaimer: This article provides general information about 2026 CRA tax changes and should not be considered professional tax advice. Tax situations vary by individual circumstances. For specific guidance on your tax situation, consult with a qualified tax professional or accountant. Tax laws and regulations are subject to change.
