2024 Tax Changes

Federal Tax Bracket Adjustments

The federal income tax bracket thresholds have increased by 4.7% for 2024.The updated brackets are:

• 15% up to $55,867 of taxable income

• 20.5% between $55,867 and $111,733

• 26% between $111,733 and $173,205

• 29% between $173,205 and $246,752

• 33% on taxable income exceeding $246,752

Basic Personal Amount Increase

The basic personal amount has been raised to $13,500 for the 2024 tax year.

Canada Pension Plan (CPP) Changes

• The maximum pensionable earnings for CPP increased to $68,500 in 2024.

• A new "CPP2" tax is being introduced on income between $68,500 and $73,200, with a maximum tax amount of $188 in 2024.

Employment Insurance (EI) Changes

The EI premium rate increased to 1.66% for 2024, with maximum insurable earnings of $63,200.

Alternative Minimum Tax (AMT) Modifications

Effective for tax years beginning after 2023:

• The federal AMT rate increased from 15% to 20.5%.

• The AMT exemption increased from $40,000 to $173,205 (indexed for future years).

• Changes were made to broaden the AMT base and adjust allowable tax credits.

Short-Term Rental Deductions

Starting January 1, 2024, income tax deductions for expenses related to short-term rentals are being eliminated in areas where they are banned or for operators not compliant with local regulations.

Carbon Tax Increase

On April 1, 2024, the federal carbon tax is set to increase from $65 to $80 per tonne in provinces using the federal backstop.These changes aim to adjust for inflation, modify existing tax structures, and implement new policies affecting personal income taxation in Canada for 2024.