2025 Individual Tax Season Filing Tips and Reminders

As we get into the 2025 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 accurately file your 2025 personal income tax return in a timely manner. 

Deadlines and filing

For 2025 T1 returns, the filing deadline is April 30, 2026. The filing deadline for self-employed individuals and their spouses or common-law partners is June 15, 2026. Income taxes for all individuals (including self-employed persons) are due on April 30, 2026, 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 2025 – FEDERAL

Disability supports deduction

Under proposed changes, the list of eligible expenses for the disability supports deduction has been expanded. For more information, contact us or see Line 21500 – Disability supports deduction on the CRA’s website.

Tax rate change – lowest individual income tax rate

Under proposed changes starting July 1, 2025, the lowest individual income tax rate will be reduced from 15% to 14%. Since the change takes effect halfway through the year, the full-year lowest marginal individual income tax rate for 2025 will be 14.5%. The rate applying to most non-refundable tax credits will continue to be the same as the lowest marginal individual income tax rate.

Top-up tax credit

Under proposed changes, a new non-refundable tax credit was introduced to effectively maintain a 15% rate for certain non-refundable tax credits claimed on amounts over the first income tax bracket threshold of $57,375 for 2025. For more information, contact us or see Line 34990 – Top-up tax credit on the CRA’s website. 

Canada Disability Benefit

A new income-tested benefit of up to $2,400 annually is available to those 18 to 64 years of age who are eligible for the disability tax credit. The benefit may be available retroactively to July 2025. Details on the benefit and the application process can be found on the Canada Disability Benefit webpage on CRA’s website. It is proposed that a $150 supplemental benefit would be available for each disability tax credit certification or re-certification giving rise to a Canada disability benefit entitlement.

Change from paper to online mail for some individuals

If you are registered for a Canada Revenue Agency (CRA) account and currently receive paper mail, the way you receive your mail from the CRA might have changed. Starting July 3, 2025, the CRA transitioned the delivery method for most mail from paper to online for approximately 500,000 benefit recipients. As of September 4, 2025, Phase 2 of this project was expanded to include an additional 900,000 individuals, broadening the scope beyond just benefit recipients. If you are part of this change, you will have received an email notification and, in some cases, a letter from the CRA with more information on what is changing. Going forward, you will receive email notifications when new mail is available to view in My Account. You will no longer receive most CRA mail by paper.

This change applies to:

• Some individuals who are registered for a CRA account and currently receive paper mail.

This change does not impact:

• Any benefit, credit, or refund payments going forward. Eligible individuals signed up for direct deposit will continue to receive their payments directly into their bank accounts. Those who receive mailed cheques will continue to get them as usual.

The CRA recommends signing in to your CRA account and ensuring your email address is current. For instructions on how to update your email, visit: Change your email address on the CRA website or contact us for help.

Email notifications from the CRA let you know when important changes are made to your account and when you have new mail to view in My Account. Having an email address on file with the CRA helps ensure you don’t miss CRA mail, some of which can be time-sensitive.

If you prefer to continue receiving your mail by paper, step-by-step instructions on changing your correspondence preference in My Account can be found here: Change your correspondence preference online.

What’s New for 2025 – BC

Tax rates and income brackets 

The personal income levels used to calculate your British Columbia tax have changed.

Credits, benefits, and rebates 

The amounts for most provincial non-refundable tax credits have increased.

The training tax credit for individuals has been extended until December 31, 2028. The program has also changed as of April 1, 2025, so that eligible First Nations individuals and persons with a disability can continue to receive the enhanced credit after the federal Apprenticeship Incentive Grant has ended on March 31, 2025.

The BC climate action tax credit program has ended. The final payment was issued in April 2025.

Reminders

Business correspondence from CRA

Starting in spring 2026, the Canada Revenue Agency (CRA) transitioned to online mail as the default method of delivering most business correspondence. For our self-employed clients with registered program accounts for GST or Payroll, 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:

• • 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, please contact us or 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. Paper mail can be requested in one of two ways:

1. Select paper mail as your delivery method for correspondence in My Business Account
2. Fill out and mail form RC681 – Request to Activate Paper Mail for Business

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, contact us or see Guide T4036, Rental Income.

Digital Platform Reporting

CRA is in its second year of receiving mandatory reports from digital platforms such as Airbnb, Uber and Etsy. Information returns from platforms are due January 31, 2026, and CRA’s ability to match this data to individual returns is expected to improve. Similar reporting is scheduled to begin for crypto-asset service platforms in 2027.

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.

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). 

FEDERAL 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.

BC Home Flipping Tax

Effective January 1, 2025, the BC home flipping tax applies to the profit you earn from selling a property in British Columbia (including presale contracts) if you owned the property for less than 730 days. The seller of the property may be a B.C. resident or a resident anywhere else in the world. Relevant transactions require a provincial filing separate for your income tax filing, which is due no later than 90 days after that date of sale.

Canadian Dental Care Plan (CDCP)

To be eligible for the CDCP, you must not have access to private dental insurance or coverage, you and your spouse or common-law-partner (if applicable) must have filed your tax returns in Canada so that your family income can be assessed for the previous year, your adjusted family net income must be less than $90,000 AND you must be a Canadian resident for tax purposes.

Canada Student Loan Forgiveness

Canada Student Loan Forgiveness may be eligible to borrowers who work in eligible occupations in eligible communities. Loan forgiveness can only be applied to the outstanding part of your federal student loan. It does not apply to the provincial or territorial part of your loan. Existing occupations include: Family Doctor, Family Medicine Resident, Licensed Practical Nurse, Nurse Practitioner, Registered Nurse, Registered Psychiatric Nurse, and Registered Practical Nurse. The following new occupations are eligible as of December 31, 2025: Dentist, Dental Hygienist, Early Childhood Educator, Midwife, Personal Support Worker, Pharmacist, Physiotherapist, Psychologist, Social Worker, and Teacher.

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 (PRE). 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. Without a designation, the PRE is not available – this means if you do not report it and make the designation, any capital gain realized is subject to tax.

CRA has the authority to accept a late PRE designation under the taxpayer relief provisions. A late election is subject to the standard penalty of $100 per month late, to a maximum of $8,000. CRA can waive the penalty at their discretion. 

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.

As a general rule, all disposals and/or changes in use of real estate will require some sort of reporting so it is important that details are provided.

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 2025 increased by 2.7% from 2024 numbers. For example, the income level at which OAS repayments commence has increased to $93,454 in 2025 (from $90,997 in 2024). In addition, the interest rate charged on overdue taxes is 7% for the second quarter of 2026. 

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 personally as these numbers impact certain expense allocations.
• Details with respect to specified foreign property held during the year. 

Slip Availability and Information Gaps

For the 2024 tax year, many slips were posted late to CRA’s portal. The delay was attributed to new CRA validation requirements. Although CRA indicated that this should not recur, ongoing system changes and the growth of non-slip-reported income highlight the risk of relying solely on CRA portals to obtain tax information (which our office does not do as a general rule). It is therefore still important for you to provide us with all relevant information for accurate completion of your income tax return. 

Future considerations

Proposed amendments related to trust reporting

Based on proposed legislation in Bill C-15, and consistent with the Explanatory Notes Relating to the Income Tax Act and Other Legislation published by the Department of Finance, while taxpayers can still choose to file under currently enacted legislation, the CRA does not expect bare trusts to file a T3 Trust Income Tax and Information Return (T3 return) including Beneficial Ownership Information of a Trust (Schedule 15) for taxation years ending in 2025. Certain bare trusts will be required to file for taxation years ending on or after December 31, 2026.

GST/HST credit

The GST/HST credit was renamed the Canada Groceries and Essentials Benefit on January 26, 2026. This benefit is a non-taxable amount paid four times a year to individuals and families with low and modest incomes to help offset the GST/HST that they pay. The Canada Groceries and Essentials Benefit (formerly the GST/HST credit) will be increased by 25% for five years starting in July 2026. In addition, a one-time top-up payment equal to 50% of the 2025-26 value will be issued to eligible and entitled recipients of the January 2026 payment of the GST/HST credit. It is expected that this one-time payment will be issued no later than June 2026.

References:

Canada Revenue Agency website: http://www.cra-arc.gc.ca/menu-eng.html

Video Tax News Inc, January 2026: Planning and preparation of 2025 personal tax returns

Did you know….

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