7 Tax Changes in 2026 That Put More Money Back in Your Pocket
The basic personal amount climbed to $16,170 for 2026, which means the first dollar you earn this year above that threshold is the first dollar Ottawa taxes. If your income stayed flat while the exemption rose, you just received a quiet cut.
Here are seven federal changes worth checking before you file in spring 2027.
The moves that shelter income
1. Open a First Home Savings Account even if you already own. If you're under 71 and haven't owned a home in the past four years, you can contribute up to $8,000 in 2026 and deduct it from income like an RRSP. The entire account grows tax-free. If you decide not to buy, the balance rolls into your RRSP without eating your contribution room. A 35-year-old in the 29% bracket who maxes the FHSA annual limit for three years shelters $24,000 and saves $6,960 in federal tax before any provincial piece.
2. Max the TFSA before paying down your mortgage. The 2026 limit is $7,500. A couple has $15,000 of room this year alone. At a 6% return over 20 years, that single year's contributions compound to $48,000 tax-free. Mortgage principal repayment builds equity but generates no tax shelter. The correct sequence: fill TFSA, then RRSP, then mortgage.
3. Claim the Canada Training Credit if you took any course last year. This refundable credit pays 50% of tuition up to your annual limit, which accumulates at $250 per year starting at age 26. Most people aged 26 to 60 who filed taxes from 2020 onward have at least $1,000 banked. If you spent $800 on a professional designation course in 2025, you get $400 back as a direct credit, not a deduction. The CRA does not mail reminders.
The structural adjustments indexed to inflation
4. Federal brackets moved up 2.7% for 2026. The 15% bracket now covers the first $57,375 of taxable income, up from $55,867. The 20.5% threshold is $114,750. If your raise last year was smaller than 2.7%, your effective rate dropped slightly even though your gross pay stayed nearly flat. The same indexing applies to the basic personal amount, the spousal amount, and the age credit.
5. CPP contribution ceiling hit $71,300. The employee and employer each pay 5.95% up to that number, which is $4,241.70 per side in 2026. The second-tier CPP ceiling is $79,400, with an additional 4% contribution on earnings in that band. If you're incorporated and paying yourself a salary, this is the number that determines your total CPP cost. Self-employed individuals pay both sides.
The family and housing credits with real dollar impact
6. The Multigenerational Home Renovation Tax Credit is live. Building a secondary suite for a senior parent or adult child with a disability? You can claim 15% of up to $50,000 in renovation costs, which is a $7,500 credit. Eligible work includes adding a separate entrance, kitchen, bathroom, or bedroom. The renovation must create a self-contained unit. This stacks with accessibility credits if the occupant qualifies for the disability amount.
7. Adjust your TD1 form if you're getting large refunds. A $4,000 refund in April means you lent Ottawa $333 per month, interest-free. If your employer is over-withholding, file a new TD1 and increase your personal claim by the exact amount of predictable annual deductions, union dues, RRSP contributions, childcare. Your net pay rises immediately. The trade-off: you owe in April if you miscalculate. Conservative filers can aim for a $500 refund instead of zero.
The bracket indexing in item 4 is the one that applies to everyone, but most people won't notice it without running the math.
The basic personal amount climbed to $16,170 for 2026, which means the first dollar you earn this year above that threshold is the first dollar Ottawa taxes. If your income stayed flat while the exemption rose, you just received a quiet cut.
Here are seven federal changes worth checking before you file in spring 2027.
The moves that shelter income
1. Open a First Home Savings Account even if you already own. If you're under 71 and haven't owned a home in the past four years, you can contribute up to $8,000 in 2026 and deduct it from income like an RRSP. The entire account grows tax-free. If you decide not to buy, the balance rolls into your RRSP without eating your contribution room. A 35-year-old in the 29% bracket who maxes the FHSA annual limit for three years shelters $24,000 and saves $6,960 in federal tax before any provincial piece.
2. Max the TFSA before paying down your mortgage. The 2026 limit is $7,500. A couple has $15,000 of room this year alone. At a 6% return over 20 years, that single year's contributions compound to $48,000 tax-free. Mortgage principal repayment builds equity but generates no tax shelter. The correct sequence: fill TFSA, then RRSP, then mortgage.
3. Claim the Canada Training Credit if you took any course last year. This refundable credit pays 50% of tuition up to your annual limit, which accumulates at $250 per year starting at age 26. Most people aged 26 to 60 who filed taxes from 2020 onward have at least $1,000 banked. If you spent $800 on a professional designation course in 2025, you get $400 back as a direct credit, not a deduction. The CRA does not mail reminders.
The structural adjustments indexed to inflation
4. Federal brackets moved up 2.7% for 2026. The 15% bracket now covers the first $57,375 of taxable income, up from $55,867. The 20.5% threshold is $114,750. If your raise last year was smaller than 2.7%, your effective rate dropped slightly even though your gross pay stayed nearly flat. The same indexing applies to the basic personal amount, the spousal amount, and the age credit.
5. CPP contribution ceiling hit $71,300. The employee and employer each pay 5.95% up to that number, which is $4,241.70 per side in 2026. The second-tier CPP ceiling is $79,400, with an additional 4% contribution on earnings in that band. If you're incorporated and paying yourself a salary, this is the number that determines your total CPP cost. Self-employed individuals pay both sides.
The family and housing credits with real dollar impact
6. The Multigenerational Home Renovation Tax Credit is live. Building a secondary suite for a senior parent or adult child with a disability? You can claim 15% of up to $50,000 in renovation costs, which is a $7,500 credit. Eligible work includes adding a separate entrance, kitchen, bathroom, or bedroom. The renovation must create a self-contained unit. This stacks with accessibility credits if the occupant qualifies for the disability amount.
7. Adjust your TD1 form if you're getting large refunds. A $4,000 refund in April means you lent Ottawa $333 per month, interest-free. If your employer is over-withholding, file a new TD1 and increase your personal claim by the exact amount of predictable annual deductions, union dues, RRSP contributions, childcare. Your net pay rises immediately. The trade-off: you owe in April if you miscalculate. Conservative filers can aim for a $500 refund instead of zero.
The bracket indexing in item 4 is the one that applies to everyone, but most people won't notice it without running the math.
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