Top 9 Canadian Tax Changes To Know About In 2022

The 2022 tax season is here for Canadians and there are some big changes you should know about if you want to maximize your return this year. These are the top 10 most important changes you should keep in mind to get as much money back as possible. 

Claim $500 on work-from-home expenses

If you worked from home in 2021, you can claim up to $500 (a boost from $400 last year) in expenses you incurred doing work-related stuff during that time—stuff like your phone, home internet, and other things you paid for out of pocket that are needed to do your job. 

If you track your expenses, you can figure out the total and use that, or just use a flat rate method of $2 per day worked from home during the pandemic.

Deduction for repaid COVID-19 benefits 

Did you receive the CRB or other COVID benefits (like the Canada Sickness Recovery Benefit or the Canada Recovery Caregiving Benefit) in 2021? If so, you’ll need to pay tax on that—but you also may need to repay some or all of your benefits if your income was higher than expected. 

Once you’ve repaid those benefits, you’ll be able to claim a tax deduction on the repayment. If you think this applies to you, read through the details because there are a number of different possibilities to maximize how much you get back here.

Tax brackets are changing 

The new federal tax brackets are… 

15% — $0 to $49,020 of income

20.5% — $49,021 to $98,040 of income

26% — $98,041 to $151,978 of income

29% — $151,979 to $216,511

33% — $216,512 and above

If your income is the same as last year, that may mean more of your income falls into a lower tax bracket, reducing your overall tax bill.

Higher RRSP limits 

The annual RRSP dollar amount contribution limit is now $27,830. That’s the absolute maximum you can contribute for 2021. That limit will go up to $29,210 for the 2022 tax year. But remember you can only contribute up to 18% of last year’s income to your RRSP, which for most of us will be below the $27,830 dollar limit anyway. 

Higher OAS limits

The Old Age Security pension limit is increasing, meaning that you can make more income before your OAS payments are clawed back or eliminated altogether. If your income was above $79,845 in 2021 you’ll start having to repay some OAS. Once it reaches $129,757 you’ll have to repay all of the OAS you received. Both of these limits are higher than last year.

More TFSA contribution room 

The TFSA contribution limit for 2021 is $6,000 — the same as last year. But because TFSA contribution limits stack every year, the total amount you can now put in one is now $81,500 for someone who has been eligible to contribute since they were created in 2009.

Higher Basic Personal Amount 

The Basic Personal Amount is a non-refundable tax credit that everyone can claim. Essentially, you don’t get taxed on income below the Basic Personal Amount, so if you had less income than that you’ll get it all back in your refund, and if your income was higher it reduces your overall tax bill. For 2021 the Basic Personal Amount is rising to $13,808 (and will increase to $15,000 by 2023).

Expanded Canada Workers Benefit

The Canada Workers Benefit (CWB) is a refundable tax credit for people who are employed but earning less than $32,244 per year (or who have a family income of less than $42,197). If you’re eligible for the CWB you can get up to $1,395 as an individual or $2,403 as a family. People with a disability are also eligible for a $720 supplement. 

This year the income thresholds for the CWB have increased and the eligibility criteria have expanded, so even if you haven’t been eligible to claim it in past years you may now be able to.

New Small Business Air Quality Improvement Tax Credit

New this year, small business owners who have bought air quality improvement machinery (like air conditioning systems or filtration devices) can get up to 25% of the cost back with this tax credit.