Canada Revenue Agency

Canada Revenue Agency

December 08, 2015 14:51 ET

2016 Indexation Adjustment for Personal Income Tax and Benefit Amounts

OTTAWA, ONTARIO--(Marketwired - Dec. 8, 2015) -

Each year, certain personal income tax and benefit amounts are indexed to inflation using the Consumer Price Index data as reported by Statistics Canada.

Increases to tax bracket thresholds, amounts relating to non-refundable credits, and most other amounts will take effect on January 1, 2016. However, increases to the goods and services tax credit will take effect on July 1, 2016, to coincide with the beginning of the program year for payment of this benefit.

The following chart compares the indexed amounts for the 2015 and 2016 tax years. It reflects an indexation increase of 1.3% for 2016.

2016
($)
2015
($)
Tax bracket thresholds
Taxable income above which the 20.5% [Footnote 1](22% for 2015) bracket begins 45,282
[Footnote 1]
44,701
Taxable income above which the 26% bracket begins 90,563
[Footnote 1]
89,401
Taxable income above which the 29% bracket begins 140,388
[Footnote 1]
138,586
Taxable income above which the 33% bracket begins 200,000
[Footnote 1]
Amounts relating to non-refundable tax credits
Basic personal amount 11,474 11,327
Age amount 7,125 7,033
Net income threshold 35,927 35,466
Spouse or common-law partner amount (maximum) 11,474 11,327
Spouse or common-law partner amount (maximum if eligible for the family caregiver amount: http://www.cra-arc.gc.ca/familycaregiver/) 13,595 13,420
Amount for an eligible dependant (maximum) 11,474 11,327
Amount for an eligible dependant (maximum if dependant eligible for the family caregiver amount: http://www.cra-arc.gc.ca/familycaregiver/) 13,595 13,420
Family caregiver amount for children under age 18 2,121 2,093
Canada employment amount (maximum) 1,161 1,146
Infirm dependant amount (maximum per dependant) 6,788 6,700
Net income threshold 6,807 6,720
Caregiver amount (maximum per dependant) 4,667 4,608
Caregiver amount (maximum per dependant eligible for the family caregiver amount: http://www.cra-arc.gc.ca/familycaregiver/) 6,788 6,701
Net income threshold 15,940 15,735
Disability amount 8,001 7,899
Supplement for children with disabilities (maximum) 4,667 4,607
Threshold relating to allowable child care and attendant care expenses 2,734 2,699
Adoption expenses (maximum per adoption) 15,453 15,255
Medical expense tax credit-3% of net income ceiling 2,237 2,208
Refundable medical expense supplement
Maximum supplement 1,187 1,172
Minimum earnings threshold 3,465 3,421
Family net income threshold 26,277 25,939
Old age security repayment threshold 73,756 72,809
Certain board and lodging allowances paid to playerson sports teams or members of recreation programs
Income exclusion (maximum per month) 348 344
Tradesperson's tools deduction
Threshold amount relating to cost of eligible tools 1,161 1,146
Goods and services tax/harmonized sales tax credit
Adult maximum 276 272
Child maximum 145 143
Single supplement 145 143
Phase-in threshold for the single supplement 8,948 8,833
Family net income at which credit begins to phase out 35,926 35,465
Tax-Free Savings Account (TFSA)
Annual TFSA dollar limit 5,500
[Footnote 1]
10,000
[Footnote 2]
Lifetime capital gains exemption for qualified farm or fishing property and qualified small business corporation shares [Footnote 3]
Exemption limit 824,176 813,600
Deduction limit (since 1/2 of the capital gain is taxable) 412,088 406,800
Additional exemption amount for qualified farm or fishing property 175,824 186,400
Additional deduction amount for qualified farm or fishing property (since 1/2 of the capital gain is taxable) 87,912 93,200

[Footnote 1]

As announced on December 7, 2015, the Government proposes to fix these amounts in law. These amounts will be indexed to inflation in subsequent years.

[Footnote 2]

Under changes announced in the 2015 Federal Budget, the TFSA dollar limit increased to $10,000 for 2015.

[Footnote 3]

Since one half of the capital gain is taxable, the total lifetime capital gains deduction limit for qualified farm or fishing property and qualified small business corporation shares increased to $412,088 for 2016 due to indexing. Under changes announced in the 2015 Federal Budget, the lifetime capital gains exemption applicable to capital gains realized on the disposition of qualified farm or fishing property, disposed after April 20, 2015, is the greater of (1) $1 million; and (2) the indexed lifetime capital gains exemption applicable to capital gains realized on the disposition of qualified small business corporation shares. Therefore an additional lifetime capital gains exemption of 175,824 and deduction of 87,912 is available for qualified farm or fishing property disposed in 2016.

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Contact Information

  • Philippe Brideau
    Media Relations
    Canada Revenue Agency
    613-941-6269