CRA Tax Audits in 2026: What You Need to Know This Tax Season

Tax season is about more than gathering slips and submitting forms. Each year, small policy changes affect how much tax you pay, which credits you qualify for and which strategies make sense. If you are preparing your 2025 return, knowing these updates ahead of time helps you file accurately, avoid errors that can prompt a review by the Canada Revenue Agency (CRA), and make better-informed decisions.

The deadline for most individuals to file a 2025 return is April 30, 2026. If you or your spouse or common-law partner are self-employed, the filing deadline is June 15, 2026, but any balance owing is still due by April 30.

Here are the updates worth knowing this year.

1. A lower federal tax rate

The most noticeable change is a cut to the lowest federal income tax rate. On July 1, 2025, it dropped from 15% to 14%.

Because the change happened mid-year, the effective rate for 2025 is 14.5%. It applies to the first portion of your taxable income, up to $57,375. That means slightly lower federal tax on that portion of your income.

Tax changes rarely stand alone, though. When the lowest rate changes, the value of certain credits changes too.

2. A new top-up credit

Many tax credits in Canada are non-refundable. They reduce the tax you owe, but if they add up to more than your tax payable, you don't get the difference back.

These credits are calculated using the lowest tax rate, so a lower rate would make them worth slightly less. To prevent that, the federal government introduced a top-up credit. It keeps the 15% rate for non-refundable credits claimed on amounts above the first bracket threshold of $57,375. In short, you don't lose part of your credits because of the rate cut.

3. A higher basic personal amount

The basic personal amount (BPA) lets everyone in Canada earn a portion of their income free of federal tax. For 2025, the BPA rose to $16,129.

Higher earners receive a reduced amount. The BPA begins to shrink once net income passes $177,882 and reaches its minimum of $14,538 at net income of $253,414. For most people, the increase means a small but helpful drop in federal tax.

4. Updated federal tax brackets

Federal tax brackets are adjusted each year for inflation. For 2025, they rose by 2.7%:

This indexing helps prevent inflation from pushing you into a higher bracket when your real purchasing power hasn't changed.

5. RRSP and TFSA contribution limits

Registered accounts are a key part of tax planning.

• RRSP for 2025: the maximum contribution is $32,490, which applies if your 2024 earned income was $180,500 or more.
• RRSP for 2026: the maximum rises to $33,810, which applies if your 2025 earned income is $187,833 or more.
• TFSA: the annual limit stays at $7,000 for both 2025 and 2026.

Your personal RRSP room is shown on your latest notice of assessment and in CRA My Account.

6. Higher CPP contributions

Canada Pension Plan (CPP) contributions rose again in 2025. Employees contribute 5.95% of earnings between the $3,500 basic exemption and $71,300, up to a maximum of $4,034.

Self-employed people pay both the employee and employer portions, for a maximum of $8,068. A second tier, known as CPP2, also applies to earnings between $71,300 and $81,200, at 4% for employees and 8% for the self-employed. These changes are designed to strengthen retirement income for future retirees.

7. OAS clawback thresholds

If you receive Old Age Security (OAS), watch the income threshold that triggers repayment, often called the clawback.

For 2025, repayment begins once your net income passes $93,454. You repay 15 cents of OAS for every dollar above that line. The benefit is fully repaid at higher income levels:

• Ages 65 to 74: $152,062
• Ages 75 and over: $157,923

8. Expanded disability support

Applications for the Canada Disability Benefit (CDB) opened in June 2025. It is available to eligible people aged 18 to 64 who qualify for the Disability Tax Credit.

Depending on income, the benefit can provide up to $200 a month, indexed to inflation each year.

9. The end of the digital news subscription credit

If you used to claim a credit for digital subscriptions to Canadian news outlets, it is no longer available starting with the 2025 tax year.

If you are self-employed, you may still be able to deduct subscription costs as a business expense when they are needed for your work or industry research.

10. The final carbon rebate payment

The federal consumer carbon tax and the Canada Carbon Rebate have ended. The final rebate payment was issued in April 2025.

If you are behind on filing earlier returns, act soon. Budget 2025 proposed that no catch-up rebate payments be made for returns or adjustment requests filed after October 30, 2026.

11. The Underused Housing Tax is eliminated

Good news for property owners: the federal Underused Housing Tax (UHT) has been eliminated for 2025 and later years.

That means you don't need to file a UHT return (Form UHT-2900) for 2025 or future years, even if you filed one before. Returns for 2022 to 2024 may still be required if they applied to you.

12. More flexible capital gains rollover rules

The rules for investors in small businesses have also become more flexible. If you sell eligible small business shares at a gain, you may be able to defer the tax by reinvesting in other eligible shares.

Previously, you had to reinvest in the same year or within 120 days after it ended. The window now runs to the end of the following calendar year, giving you more time. The definition of eligible small business shares has also been broadened, so more investments may qualify.

The bottom line

Tax changes are a normal part of every filing year. Some are small, while others can change what you pay or get back. Review your slips, check which credits apply to you and keep your records organized. For guidance on your own situation, check Canada.ca and the CRA, or speak with a qualified tax professional.