Changes to your 2026 tax returns are coming in the new year that will ultimately affect your bottom line.

New federal tax brackets adjusted for inflation have been revealed by the Canada Revenue Agency (CRA), with the inflation rate used to index tax brackets now set at two per cent.

Every year, personal income tax and benefit amounts are indexed to inflation using the Consumer Price Index data. Over the last few years, the inflation rate decreased from 6.3 per cent in 2023, to 4.7 per cent in 2024 to 2.7 per cent in 2025.

Increases to tax bracket thresholds and non-refundable credits will take effect on Jan. 1, while changes to income-tested benefits such as goods and services tax credit, the Canada Child Benefit and Child Disability Benefit will take effect on July 1.

Here’s everyt

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