What’s new for 2024 tax year

As general behavior of legislative body at the beginning of the year, here are some important new fiscal measures to keep in mind when planning financial moves for 2024 and later years.

Basic personal amount

The basic personal amount (BPA) is a non-refundable tax credit that can be claimed by all individuals, meaning how much a filer can earn without paying income tax; for 2024 this is $15,705.  Unfortunately, this benefit is gradually reducing when income is higher than $173,205.

CPP Maximum pensionable earnings

The Pensionable Earnings under the Canada Pension Plan (CPP) for 2024 will be $68,500. The employee and employer contribution rates will be 5.95%, unchanged from 2023. 

Effective January 1, 2024, as part of the CPP enhancement, the Government is implementing a second earnings ceiling at $73,200, known as the (CPP2).  Additional employee and employer contribution rates for 2024 will be 4.00%, on earnings between the maximum pensionable earnings and second ceiling.

Contribution to employment insurance (EI)

Effective January 1, 2024 the maximum insurable earnings increases to $63,200, and the employee EI premium rate is increasing to 1.66% the employee will pay a maximum annual EI premium of $1,049.1 and for the employer will be 1,468.77.

Changes in the mandatory disclosure and general anti-avoidance rules (GAAR)

Amendments to the general anti-avoidance rule (GAAR) apply to transactions occurring on or after January 1, 2024.  These amendments broaden the scope of the rules, potentially leading to additional reporting by taxpayers and their advisors. We will be looking to the CRA to provide additional guidance in 2024 on the changes to the GAAR. 

Short-term rentals no expenses deduction

The Federal Government proposed to deny deductions for short-term rentals for taxpayers where there is non-compliance with provincial or municipal laws or regulations related to short-term rentals, starting on January 1, 2024.

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