What’s New for TurboTax Canada in 2025

Canadian tax updates for 2025

The biggest news is that the federal government reduced the personal income tax rate for the first tax bracket to 14%, down from 15% in previous years, to help Canadians cope with the rising cost of living. Because the lower rate came into effect on July 1, 2025, the first bracket has an effective rate of 14.5% for the 2025 tax year only. From 2026 onward, the rate will be 14%.

Here are other key tax changes to know about:

Updated federal income tax brackets

The updated income thresholds for the 2025 tax year are as follows:

• 14.5%* on income up to $57,375
• 20.5% on income over $57,375 and up to $114,750
• 26% on income over $114,750 and up to $177,88
• 29% on income over $177,882 and up to $253,414
• 33% on income over $253,414

*The federal government cut the tax rate for the lowest bracket from 15% to 14%. The cut took effect mid-year, on July 1, so the effective tax rate for the lowest bracket in 2025 is 14.5%.

The provinces and territories also adjust their tax brackets each year, so be sure to check the CRA's list of 2025 provincial and territorial tax rates.

Basic Personal Amount (BPA) for 2025

The BPA is the federal tax credit all Canadians filing their taxes can claim each year. It's meant to reduce your overall income that's subject to tax. To reflect inflation in 2025, that amount has increased to $16,129, up from $15,705 in 2024.

Canada Pension Plan (CPP) contributions

The maximum annual pensionable earnings amount for 2025 is set at $71,300, up from $68,500 in 2024, while the basic exemption amount remains $3,500 (this is the annual amount on which you don't have to make CPP contributions).

The CPP contribution rate also stays the same for both employees and employers this year at 5.95%. Here are the updated annual contribution limits:

• Employee maximum annual contribution limit: $4,034.10
• Employer maximum annual contribution limit: $4,034.10
• Self-employed maximum annual contribution limit: $8,068.20

Registered Retirement Savings Plan (RRSP) contributions

RRSPs allow you to save for retirement on a tax-deferred basis, and you get a tax deduction for RRSP contributions. For 2025, the RRSP contribution limit is either 18% of your previous year's income or $32,490 (this year's dollar limit set by the government), whichever is lower. You have until March 2, 2026, to make an RRSP contribution and potentially lower your taxable income for 2025. Any unused RRSP room carries forward indefinitely.

If you have a Tax-Free Savings Account (TFSA), your available contribution room grew by $7,000 in 2025, the same amount it rose by in 2024. The cumulative TFSA contribution room for someone who was at least 18 in 2009—when the account launched—is $102,000 in 2025, and it will increase by another $7,000 in 2026 to $109,000. There is no tax deduction for TFSA contributions, but you won't pay tax on withdrawals, either. There is no deadline for TFSA contributions, but the earlier you contribute, the more time your investments have to grow.

Staying informed about these updates is essential for effective financial planning.TurboTax Online has kept pace with these changes and can help ensure that you meet all of your tax obligations.

Whats new or improved with TurboTax for 2025?

For tax year 2025, TurboTax has introduced several new features and enhancements to streamline your tax-filing process, reduce errors, and offer tailored support. Here's a look at what's new:

Time-saving import features

TurboTax simplifies tax filing and reduces manual data entry with Auto-fill My Return (AFR), which imports information from your CRA account, such as your T4 tax slip and RRSP receipts. This year, TurboTax has moved AFR earlier in the tax-filing process so that key sections of your profile, along with your tax-slip info, are pre-filled. New customers can easily upload previous T1 forms, too. (This feature is currently available in English only, and French is coming soon.)

More features for self-employed expense receipts

If you run your own business or have a side hustle, you will likely have business expenses to claim on your return. We can help! Simply enter your expenses in a spreadsheet, then upload it to TurboTax. We'll suggest a category for each expense, extract the dollar amounts, and incorporate them into your overall return. You can review the details and make adjustments if needed.

Improved Uber and Etsy integration

Uber drivers and Etsy creators, you can now start your tax return from within TurboTax Online, rather than clicking a TurboTax ad in your Uber or Etsy account. With this update, you can easily connect to your Uber or Etsy account as you fill out your tax return and import your data and expenses. TurboTax also offers promotional savings based on the company.

Spousal Toggle enhancements

If you're filing with your spouse, TurboTax's updated Spousal Toggle makes it easy to switch seamlessly between your and your spouse's returns to ensure accuracy and help understand the benefits you could be eligible for. You can also transfer income tax deductions and non-refundable tax credits between returns to maximize your collective benefits.

A new way to access the Tax Hub

The Tax Hub shows your progress in filing your return and what you have left to do. Now you can quickly view any of your tax forms using the left-hand navigation menu, rather than clicking on the Tax Home button.

Search enhancements

TurboTax Online helps you find all the tax credits and deductions you may be eligible for. We've enhanced our search tools to display a list of common forms that may be applicable to you, so you don't miss out on any credits and deductions.

Frequently asked questions (FAQs)

Can I change my tax return after filing?

Yes, TurboTax makes it easy to amend and ReFILE your tax return if you discover an error or need to add missing information. You can request an amendment for tax returns filed within the past 10 calendar years. For example, in 2025, you can amend returns from 2015 onward. Here's how: Log in to your account, access the relevant return, make the necessary changes, and follow the steps to resubmit. Detailed guidance is available within the software or through TurboTax support.

How long after filing taxes can I be reassessed or audited?

The CRA can typically reassess or audit a tax return up to 4 years after it has been filed. However, this period may be extended if there are concerns about fraud or misrepresentation.

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