2024 Canadian Tax Updates and Insights

Here are some notable Canadian tax updates and insights for 2024

• CPP and EI Contribution Updates: The Canada Pension Plan (CPP) has introduced a new dual maximum earnings ceiling for 2024. This change impacts workers earning between $68,500 and $73,200, leading to higher contributions for both employers and employees. The Employment Insurance (EI) contributions have also seen adjustments to reflect these changes​.
• First Home Savings Account (FHSA): Launched in 2023, the FHSA is now fully operational in 2024. This account allows Canadians to save for their first home with tax-deductible contributions and tax-free withdrawals when used for home purchases. It’s an essential tool for first-time homebuyers looking to maximize their savings​.
• Residential Property Flipping Rule: Starting in 2023 and fully in effect by 2024, profits from selling properties owned for less than a year are taxed as business income, not capital gains. This rule aims to reduce speculative real estate activities​.
• Enhanced Digital Payment Requirements: As of January 2024, any payments over $10,000 to the Receiver General must be made electronically. This requirement is part of a broader move towards digitalization in tax collection and enforcement, with penalties for non-compliance unless justified​.
• New Trust Reporting Rules: Stricter reporting requirements for trusts, including bare trusts, have been implemented in 2024. These changes aim to increase transparency and compliance, with significant penalties for non-reporting or under-reporting​.

These updates are part of ongoing efforts by the Canadian government to refine and modernize its tax system. Consulting with tax professionals is advisable to understand how these changes might impact individual or business tax obligations in 2024.