- January 27, 2025
- Posted by: Harpreet
- Category: Tax Tips
Important CRA changes for 2025
By: Harpreet Wadehra
January 26, 2025
As we continue to be surrounded by political uncertainty, we are reminded that we cannot escape taxes. I have summarized below some pivotal changes that impact your personal/business taxes for 2024, 2025 and ahead.
- Transitioning to online mail for most business correspondence
Beginning in Spring 2025, the Canada Revenue Agency (CRA) will make online mail the default for most business correspondence, delivering notices and updates through your MY Business Account instead of by paper mail.
As your representative, we do not have access to CRA notifications. You need to register for My Account (and use the same login to register for My Business Account). You only need one login if you have multiple companies. You will need access to your 2023/2022 personal tax return (T1 general or NOA).
This change will apply to:
- New business number and program account registrations
- Existing businesses registered for My Business Account
- Businesses with authorized representatives using Represent a Client
If you already have a My Business account, sign into My Business Account and make sure your email address is up to date. This will allow the CRA to send you email notifications when new mail is available or when important updates are made to your account.
- The CRA is administering proposed capital gains inclusion rate legislation
On September 23, 2024, the Notice of Ways and Means Motion (NWMM) was introduced to amend the Income Tax Act and the Income Tax Regulations to increase the inclusion rate for capital gains from 1/2 to 2/3.
Although these proposed changes are subject to parliamentary approval, the CRA is administering the changes to the capital gains inclusion rate effective June 25, 2024, based on the proposals included in the NWMM tabled September 23, 2024.
For all taxpayers, the changes to the capital gain inclusion will apply to capital gains realized on or after June 25, 2024. Impacted forms for individuals, trusts, and corporations are expected to be on Canada.ca as of January 31, 2025.
We believe the CRA’s decision to administer these rules is unconstitutional. We will be reviewing this on a case-by-case basis. If you are impacted by these rules, we will need to have a discussion to see what approach you would like to take.
- Trust reporting for the 2024 tax year – Bare trusts not required to file the T3 Return and Schedule 15
The CRA will not require bare trusts to file a T3 Income Tax and Information Return for the 2024 tax year, unless the CRA makes a direct request for these filings. This is a continuation of the exemption from the trust reporting requirements that was issued for bare trusts in the 2023 tax year.
The new trust reporting requirements still apply to other affected trusts with taxation years ending after December 30, 2023. These affected trusts are required to file a T3 return, including Schedule 15, unless specific conditions are met.
- Changes for short-term rentals
New legislative changes require short-term rentals to be compliant with the short-term rental laws in the municipality/province in which they are located in order to claim deductions. Short-term rental hosts were required to comply with these applicable provincial and municipal registration, permit, license, and operating requirements by December 31, 2024.
- Extension for donations to Feb 2025
On December 30, 2024, the Department of Finance announced the federal government’s intention to extend the deadline for making charitable donations eligible for tax support in the 2024 tax year to February 28, 2025.
To help provide certainty as we head into tax season, the Canada Revenue Agency (CRA) is confirming that it will proceed with administering the 2024 deadline extension for charitable donations. The CRA is administering this proposed legislation, consistent with its long-standing practice.