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Last updated: November 05 2019
The Next New Tax Facts: Plan Now for 2020
Walter Harder
Once you’ve done your year-end planning for 2019, it’s important to know what your tax situation for 2020 will look like. Indexation of tax brackets and personal amounts are based on the Consumer Price Index for September, while prescribed interest rates are based on the average rate for three-month Treasury Bills for October. Although the CRA won’t announce the exact figures until later in November, here’s what to expect the new tax numbers to look like based on a federal indexing factor of 1.9%
Tax Brackets. The federal indexation factor for 2020 of 1.9% results in the following changes to the federal tax brackets:
|
2020 Brackets |
2020 Rates |
|
Up to $48,535 |
15% |
|
$48,536 to $97,069 |
20.5% |
|
$97,070 to $150,473 |
26% |
|
$150,474 to $214,368 |
29% |
|
Over $214,368 |
33% |
Personal amounts are likewise indexed:
|
Personal Amount |
2019 |
2020 |
|
|
Basic Personal Amount |
Maximum Claim |
$12,069 |
$12,2982 |
|
Age Amount |
Maximum Claim |
$7,494 |
$7,637 |
|
Reduced by net inc. over |
$37,790 |
$38,508 |
|
|
Spouse or C/L Partner Amt. |
Not infirm |
$12,069 |
$12,298 |
|
Eligible Dependant Amount |
Not infirm |
$12,069 |
$12,298 |
|
Pension Income Amount |
Maximum Claim1 |
$2,000 |
$2,000 |
|
Adoption Expenses |
Maximum Claim |
$16,255 |
$16,563 |
|
Canada Caregiver Credit |
Infirm spouse, elig. dep. or child |
$2,230 |
$2,273 |
|
Other infirm dependants |
$7,140 |
$7,276 |
|
|
Reduced by net inc. over |
$16,766 |
$17,085 |
|
|
Disability Amount |
Basic Amount |
$8,416 |
$8,576 |
|
Supplementary Amount |
$4,910 |
$5,003 |
|
|
Base Child Care Amount |
$2,875 |
$2,930 |
|
|
Tuition Tax Credit |
Minimum Tuition1 |
$100 |
$100 |
|
Medical Expenses |
3% limitation |
$2,352 |
$2,397 |
|
Refundable Medical Expense Supplement |
Maximum |
$1,248 |
$1,245 |
|
Base Family Income |
$27,639 |
$28,164 |
|
|
Minimum earned income |
$3,645 |
$3,714 |
|
|
Donation Credit |
Low-rate ceiling1 |
$200 |
$200 |
|
Canada Employment Amt. |
Maximum |
$1,222 |
$1,245 |
|
Home Buyers’ Amount |
Maximum1 |
$5,000 |
$5,000 |
|
Volunteer Firefighters |
Maximum1 |
$3,000 |
$3,000 |
|
Volunteer Search & Rescue |
Maximum1 |
$3,000 |
$3,000 |
|
Home Accessibility TC |
Maximum1 |
$10,000 |
$10,000 |
1 These amounts are not indexed
2 The basic personal amount (BPA) is expected to be changed per the Liberal election platform
Prescribed Interest Rate. The prescribed interest rate for January to March 2020 will remain at 2% based on the average rate on October's three-month treasury bills.
TFSA Contribution Room. The additional TFSA contribution room earned on January 1, 2020 will be $6,000 as the indexation rate is not enough to increase it to the next level.
Source Deductions. Here’s what Canadians can expect to contribute to CPP and EI.
|
Program |
|
|
|
Employment Insurance |
Maximum insurable earnings |
$54,200.00 |
|
|
Premium rate |
1.58% |
|
|
Maximum employee premium |
$856.36 |
|
|
Maximum employee premium |
$1,198.90 |
|
|
Clawback zone begins at |
$67,750.00 |
|
Canada Pension Plan |
Maximum pensionable earnings |
$58,700 |
|
|
Contribution rate |
5.25% |
|
|
Maximum employee/employer contribution |
$2,898.00 |
|
|
Maximum self-employed contribution |
$5,796.00 |
|
RRSP |
Maximum new contribution room earned |
$27,230.00 |
|
Based on maximum 2019 earned income of |
$151,278.00 |
Additional educational resources: Find out more about the theory behind these provisions by taking a certificate tax course from Knowledge Bureau in the DFA-Tax Services Specialist™ Program.
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