As we move through the first quarter of 2026, Canadians are preparing to file their 2025 personal tax returns, and this year comes with several important updates from the Canada Revenue Agency (CRA).
From adjusted tax brackets to service changes and new deductions, understanding what’s changed can help you file accurately, reduce your tax bill, and avoid unnecessary stress during tax season.
Here’s a breakdown of the most important CRA updates affecting 2025 tax returns filed in 2026.
Inflation-Adjusted Tax Brackets & Credits
For the 2025 tax year, the CRA applied inflation indexing of approximately 2.7% to federal tax brackets and many non-refundable tax credits.
This means:
- Income thresholds for federal tax brackets increased
- The Basic Personal Amount (BPA) — the amount you can earn tax-free — went up again
- Several credits, including caregiver and family-related credits, are slightly higher
These adjustments can result in lower taxes owing or a larger refund, particularly for low- and middle-income earners.
Lowest Federal Tax Rate Reduction (Applied to 2025)
One of the biggest changes affecting 2025 returns is a reduction to the lowest federal income tax rate.
The rate dropped from 15% to 14% on July 1, 2025
Because the change happened mid-year, the CRA applies a blended 14.5% rate for the first federal tax bracket on your 2025 return
This reduction benefits most Canadians and may slightly reduce the amount of federal tax you owe when filing in 2026.
CRA’s Shift Away From Automatic Paper Tax Packages
The CRA continues to move toward digital-first services.
For 2025 returns:
- Paper tax packages are no longer automatically mailed to most Canadians
- Taxpayers who prefer paper filing must request a package manually
- Online filing through NETFILE and CRA My Account remains the fastest option
If you’ve relied on mailed tax packages in the past, this change may impact how you prepare your return.
Expanded Disability Supports Deduction
For the 2025 tax year, the CRA expanded the list of eligible expenses under the disability supports deduction.
This includes additional:
- Assistive devices
- Specialized equipment
- Services that support employment or education
If you or a dependent qualify, this expansion may increase the deductions available on your 2025 return.
Capital Gains & Small Business Share Updates
Certain updates may affect:
- Small business owners
- Co-operative shareholders
- Individuals involved in qualifying share transactions
Changes include expanded eligibility for capital gains deductions in specific cases and extended timelines for acquiring replacement shares. These rules can be complex and often require professional guidance to apply correctly.
Key Deadlines for Filing 2025 Taxes
Make sure these dates are on your calendar:
- February 2026: NETFILE opens for 2025 tax returns
- March 2, 2026: RRSP contribution deadline for 2025 deductions
- April 30, 2026: Deadline to file and pay personal income taxes
- June 15, 2026: Filing deadline for self-employed individuals
(Any balance owing is still due April 30)
Missing deadlines can lead to penalties and interest, even if your return is otherwise accurate.
How we Can Help
Tax changes don’t just affect numbers — they affect planning, cash flow, and long-term financial decisions.
At ME Consulting Inc., we help individuals and small business owners:
- File accurate and compliant 2025 tax returns
- Identify deductions and credits they may be missing
- Plan ahead to reduce future tax liabilities
- Navigate CRA changes with confidence
Whether your tax situation is straightforward or more complex, having professional support can make a meaningful difference.
Need help filing your 2025 return?
Reach out to ME Consulting Inc. today to book your personal tax appointment and file with confidence in 2026.
