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The CRA recently announced changes in filing paper tax returns.iStockPhoto / Getty Images
Every fall, the Canada Revenue Agency releases key updates showing how contribution limits, tax brackets and benefits, among other things, will change in the coming year.
Recently the tax agency also announced changes in filing paper tax returns as well as a slew of new and improved online services meant to help boost service standards under Finance Minister François-Philippe Champagne’s 100-day plan to reduce delays at the agency.
Here’s what Canadians should know for 2026.
New contribution limits
The tax-free savings account limit for 2026 remains $7,000. That’s because the contribution cap adjusts only in $500 increments and inflation hasn’t yet risen enough to reach $7,500.
The dollar limit for contributing to a registered retirement savings plan is rising to $33,810, up from $32,490 in 2025. Canadians can contribute a maximum of 18 per cent of their earnings from the previous year, up to the annual dollar ceiling.
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New tax rates and tax brackets
The Carney government lowered the bottom federal income tax rate to 14 per cent from 15 per cent as of the beginning of July. This means 2026 will be the first time the lower tax rate applies for the full year.
The government has also adjusted federal tax brackets using a 2-per-cent inflation rate. The 2026 federal tax brackets are:
Income up to $58,523. Income up to the threshold of the lowest bracket will be taxed at a rate of 14 per cent. The upper limit for this bracket was $57,375 in 2025.
Income above $58,523 and up to $117,045. For every dollar of income between the limits of the second tax bracket, Ottawa applies a tax rate of 20.5 per cent. The upper threshold was $114,750 in 2025.
Income above $117,045 and up to $181,440. For every dollar of income falling in the third bracket, the federal income tax rate is 26 per cent. The previous upper limit was $177,882.
Income above $181,440 and up to $258,482. The federal rate for the fourth bracket is 29 per cent, with the previous upper threshold at $253,414.
Income above $258,482. The top federal tax rate is 33 per cent.
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The new basic personal amount
In 2026, Canadians will be able to earn up to $16,452, up from $16,129 in 2025, before they have to pay federal income tax.
For those with incomes above that threshold, federal income taxes are reduced by an amount equal to the basic personal amount multiplied by the lowest federal income tax rate.
This means the tax break will be worth up to $2,303 (14 per cent of $16,452) in 2026 for most Canadians, although taxpayers in the top two tax brackets stand to receive a slightly smaller amount.
CRA will no longer automatically mail paper tax returns
Canadians who file with pen and paper will not automatically receive a 2025 income tax package in the mail, the CRA announced in December.
Instead, beginning Jan. 20, they will have to call the agency or go online to order a copy of the income tax package for the 2025 tax year. They’ll also be able to print the paperwork from the CRA’s site.
The agency said it will take up to 10 business days for forms to arrive by mail.
Just 7 per cent of 2024 tax returns were paper returns.
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More online options to avoid calling CRA
Thanks to the 100-day plan, Canadians now have more reasons to avoid calling the CRA.
For example, as of late October, those who already have a CRA account will be able to reset their credentials online if they are locked out or have forgotten their sign-in information without having to speak to a CRA agent.
Another example: The new “Manage Balance” service within the CRA’s MyAccount portal allows taxpayers with tax debts of $1,000 or more to set up a repayment plan entirely online. The service is currently available to around half a million users, according to the CRA.
