2024 Individual Tax Season Filing Tips & Reminders
As we get into the 2024 tax filing season, we would like to provide you with some information on changes that have taken place since last year and remind you of some important filing requirements and documents that need to be obtained in order to properly file your 2024 personal income tax return in a timely manner.
Deadlines and filing
For 2024 T1 returns, the filing deadline is April 30, 2025. The filing deadline for self-employed individuals and their spouses or common-law partners is June 15, 2025. Income taxes for all individuals (including self-employed persons) are due on April 30, 2025, and your payment will be considered on time if it is received by the CRA or processed at a Canadian financial institution on or before that date.
What’s New for 2024
The CRA introduced a new identity validation option to register for the CRA sign-in services. This option provides a secure way to validate your identity in real-time, allowing full and immediate access to your online account, without needing to wait for a CRA security code by mail. For more information, go to Register for the CRA sign-in services.
Alternative minimum tax (AMT)
Changes to the AMT calculation have been introduced for 2024 and later tax years. These changes include an increase to the minimum tax rate and the basic exemption threshold, as well as changes to the calculation of adjusted taxable income for AMT purposes, the special foreign tax credit, and the minimum tax carryover. The changes also limit the value of most non-refundable tax credits.
Canada child benefit (CCB)
Starting in 2025, eligibility for the CCB will be extended for six months after a child’s death if the individual claiming the CCB for that child is otherwise eligible. The individual receiving the CCB will still be required to notify the CRA of the child’s death before the end of the month following the death. The extended period will also apply to the child disability benefit. For more information about the CCB and child disability benefit, go to Canada child benefit.
Canada pension plan (CPP) and Québec pension plan (QPP) enhancement
As of January 2024, a second additional contribution of 4% is required by the employee and employer on pensionable earnings that are more than the year’s maximum pensionable earnings but not more than the year’s additional maximum pensionable earnings. This amount is reported in box 16A (CPP) or box 17A (QPP) of your T4 slip. For self-employment income and other earnings, the rate for second additional contributions is 8%. For more information, go to Federal income tax and benefit information for 2024.
Home Buyers’ Plan (HBP) withdrawals
The HBP withdrawal limit has increased from $35,000 to $60,000 for withdrawals made after April 16, 2024. In addition, temporary repayment relief was introduced to defer the start of the 15-year repayment period by an additional three years for participants making a first withdrawal between January 1, 2022, and December 31, 2025. Accordingly, the 15-year repayment period will start in the fifth year following the year that the first withdrawal was made.
Reporting rules for digital platform operators
New reporting requirements for platform operators have been introduced for the 2024 calendar year on sellers in the sharing and gig economy, including the rental of real or immovable property. If you are a reportable seller, your platform operator will provide you with an annual copy of the information that is collected and reported to the Minister under these rules by January 31, 2025, to help you file your taxes. For more information, see Reporting rules for digital platforms.
Short-term rentals
As of January 1, 2024, individuals are no longer able to deduct expenses related to non-compliant short-term rentals. This change applies to all expenses, including interest expenses, incurred after 2023 to earn income from operating non-compliant short-term rentals. For more information about these changes, see Guide T4036, Rental Income.
Volunteer firefighters’ amount (VFA) and search and rescue volunteers’ amount (SRVA)
The VFA and SRVA have increased from $3,000 to $6,000 for eligible individuals who performed at least 200 hours of combined eligible volunteer service during the year.
Reminders
Eligibility for tax credits and benefits
Remember that your eligibility for certain credits and benefits is dependent upon your tax return being filed every year. Therefore it is important to file your return on time even if you do not expect to owe tax.
Investment related information
If your tax material includes investment information, kindly provide all information that has been mailed to you with your slips as much of the supplementary information mailed to you is needed to accurately file your income tax returns.
Electronic remittances or payments above $10,000
As of January 1, 2024, remittances or payments to the Receiver General of Canada should be made as an electronic payment if the amount is more than $10,000. Payers may face a penalty unless they cannot reasonably remit or pay the amount electronically.
Federal, provincial and territorial COVID-19 benefit repayments
Federal, provincial and territorial COVID-19 benefit repayments made during 2024 can be claimed as a deduction on your 2023 return.
First Home Savings Account (FHSA)
The FHSA was introduced to help first-time home buyers save up to $40,000 for a home purchase. Starting April 1, 2023, contributions to an FHSA are generally deductible (like an RRSP), though the carryover of unused annual contribution limit is limited to one year (unlike an RRSP). Income earned in an FHSA and qualifying withdrawals from an FHSA made to purchase a first home are non-taxable (like a TFSA).
Multigenerational Home Renovation Tax Credit
Effective January 1, 2023, a 15% tax credit may be eligible in respect of expenses of up to $50,000 related to building a secondary suite for a family member who is a senior or an adult with a disability.
Residential Property Flipping Rule
Effective January 1, 2023, subject to certain exceptions, the profit earned on a sale of a residence (including rental properties) within one year of its purchase may be subject to tax as income versus a capital gain and the principal residence exemption will not apply.
Immediate CCA Expensing of Capital Assets
For individuals and Canadian partnerships (all the members of which are individuals), this incentive remains in place for eligible property available for use before January 1, 2025.
Accelerated investment incentive
Eligible property for this incentive must be acquired after November 20, 2018, and be available for use before January 1, 2028. For eligible property that becomes available for use after 2023, a phase-out period applies reducing the overall capital cost allowance over 2024 to 2027.
Principal residence matters
Starting in 2016, individuals must report dispositions of their principal residence that occurred in the year. Taxpayers are required to report certain basic information about the sale of a principal residence in order to claim the full principal residence exemption. The information required includes, but is not limited to, the address of the property, the date it was acquired, and the amount of the proceeds of disposition.
A change in the use of your principal residence or of an income producing property to your principal residence may be considered a deemed disposal which requires reporting. If you own real property, the use of which changed during the year, please be sure to discuss it with us so that we may help you determine if reporting is required.
Travel expenses to obtain medical services
The rules related to transportation and travel expenses eligible for a medical tax credit are often misunderstood. As per Income Tax Folio S1-F1-C1, Medical Expense Tax Credit “an amount paid to a person engaged in the business of providing transportation services is an eligible medical expense to the extent that the payment relates to transporting a patient to and from a locality, under the following circumstances:
- The patient travels to a place that is at least 40 kilometres away from the locality where he or she dwells to receive medical services;
- Substantially equivalent medical services are unavailable within the patient’s locality;
- The patient takes a reasonably direct travel route having regards to the circumstances; and
- It is reasonable, in the circumstances, for the patient to travel to that place for the medical services.”
If there isn’t a person who is in the business of providing transportation services readily available, a claim is allowed for reasonable expenses for operating a vehicle for the purposes of travelling to obtain medical expenses as long as the criteria mentioned above are met.
If the patient must travel at least 80 kilometres away and the other criteria mentioned above are met, additional expenses (including meals, accommodation and parking) are also considered eligible medical expenditures.
Medical expenses are frequently reviewed by CRA; therefore it is important to have your supporting documentation in order prior to making your claim. The required documentation must include a letter from your local medical practitioner confirming that the medical services were not available locally and therefore the taxpayer had to travel to receive such services, as well as confirmation from the out-of-town service provider that you attended the appointments and the dates of such appointments. For your convenience we have drafted a generic letter which is available in our office for you to take to your medical practitioners for the required signatures. Please call us to enquire about obtaining a copy.
Impact of Inflation
Many tax rules and thresholds are tied to inflation. The rapid increase in inflation has led to additional risks, costs and benefits. In particular, the personal income tax and benefit amounts for 2024 increased by 4.7% from 2023 numbers. For example, the income level at which OAS repayments commence has increased to $90,997 in 2024 (from $86,912 in 2023), and the annual TFSA contribution limit has increased to $7,000 in 2024 (from $6,500 in 2023). In addition, the interest rate charged on overdue taxes is 8% for the first quarter of 2025.
Other important information
Depending on your particular tax situation you may need to provide the following information:
- Capital gains schedules including purchase and sale dates for all securities sold during the year as well as sales and purchase agreements of any real property sold in the year.
- Details of cryptocurrency transactions for the year. Cryptocurrencies, such as Bitcoin, Ethereum, Litecoin, etc., are considered a commodity and are therefore subject to the rules contained in the Income Tax Act. Accordingly, you must report any gains or losses from buying and selling cryptocurrencies.
- For rental properties, please remember to include the number of days the property was rented as well as the number of days the property was used for personal use as these impact certain expense allocations.
- Details with respect to specified foreign property held during the year.
Future considerations
Business correspondence from CRA
Starting in spring 2025, the Canada Revenue Agency (CRA) will transition to online mail as the default method of delivering most business correspondence. This means you’ll start receiving most of your business notices and other correspondence through the CRA’s secure online portal, My Business Account, instead of by mail.
This change applies to all:
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- new business number and program account registrations
- existing businesses registered for My Business Account
- businesses who have a representative that accesses the CRA’s services on their behalf via Represent a Client [emphasis added]
Online mail means businesses will need to sign in to My Business Account to receive correspondence, such as a notice of assessment. For more information you can visit online mail for business.
If you would like to receive your correspondence by paper mail, you’ll need to make a request to activate paper mail. Starting in May 2025, paper mail can be requested in one of two ways:
- Select paper mail as your delivery method for correspondence in My Business Account
- Fill out and mail form RC681 – Request to Activate Paper Mail for Business
References:
Canada Revenue Agency website: http://www.cra-arc.gc.ca/menu-eng.html
Video Tax News Inc, January 2025: Planning and preparation of 2024 personal tax returns
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