As we move into the new year, the Canadian government has released its new tax brackets for 2022. This year, there are a few changes that could impact your bottom line. Here’s what you need to know about the new tax brackets Canada 2022.
The first change is that the personal exemption has been increased from $12,069 to $13,229. This means that you can earn more income before being taxed. The second change is that the basic personal amount has been increased from $9,136 to $9,822. This is the amount of money you can earn before paying taxes.
The third change is that the Canada Pension Plan (CPP) contribution rate has been increased from 9.10% to 9.50%. This will impact employees and employers. The fourth change is that the Employment Insurance (EI) premiums have been increased from 1.58% to 1.62%. This will also impact employees and employers.
The fifth change is that the GST/HST credit has been increased from $400 to $600. This is a refundable tax credit that helps offset the cost of goods and services tax (GST) or harmonic sales tax (HST). The sixth change is that the maximum age for RRSP contributions has been increased from 71 to 72. This means that you can continue to contribute to your RRSP until you turn 72 years old.
The seventh change is that the TFSA contribution limit has been increased from $6,000 to $7,000. This is the maximum amount you can contribute to your tax-free savings account (TFSA) in a year. The eighth change is that the first-time home buyer’s tax credit has been extended until September 2023. This is a refundable tax credit that helps with the costs of buying a first home.
The ninth change is that the age limit for the Registered Disability Savings Plan (RDSP) has been increased from 59 to 60. This is the maximum age at which you can open an RDSP. The tenth change is that the minimum withdrawal amount for Registered Retirement Income Funds (RRIFs) has been decreased from 7.38% to 5.28%.
This change will impact seniors who are withdrawing from their RRIFs. The eleventh change is that the maximum age for contributions to an RESP has been increased from 21 to 31. This is the maximum age at which you can make contributions to an RESP. The twelfth and final change is that the maximum amount you can contribute to your TFSA has been increased from $5,500 to $6,000.
This is the total amount you can contribute to your TFSA in a year. These are the new tax brackets Canada 2022. Be sure to consult with a tax professional to see how these changes will impact your taxes.