What Tax Changes Has the CRA Made In 2021?
Due to inflation, the CRA has raised the indexation rate by 1.0% to account for inflation. The indexation increase is lower this year compared to 1.9%, 2.2%, and 1.5% for 2020, 2019, and 2018. From this information, one can deduce that underlying inflation is lower this year compared to the previous three years.
The tax rates’ changes have increased the amount of tax-free annual income by $579 to $13,808. In other words, Canadians who earn $13,808 or lower in 2021 will be exempt from income tax.
The CRA made several other changes, including increasing the Canadian Pension Plan (CPP) premiums by 0.20% to 5.45%. The Canada Child benefit (CCB) has also been raised to $6,833 from $6,456 for every child aged six and below, while CCB for children in the six-to-17 age bracket has been raised to $5,765 from $5,708.