Your 2022 Tax Reality Sheet and Calendar


We’re into a brand new yr and with it comes some upward changes to tax brackets, credit score quantities and advantages. These inflation-based adjustments apply largely throughout the board. The Canada Income Company has listed these quantities for 2022 at 2.4% over final yr’s ranges. That charge relies on the typical Shopper Worth Index through the 12 months ended Sept. 30, 2021, in comparison with the identical interval a yr earlier.

The yr might deliver some adjustments to tax guidelines, primarily based on final fall’s election guarantees and the federal government’s subsequent financial assertion. These and common tax-planning suggestions shall be mentioned in a separate article within the coming weeks. Meantime, listed below are some new numbers and key dates to think about for 2022:

Tax Charges

Federal

Whereas the charges of taxation are largely unchanged, the federal tax-bracket thresholds for taxable earnings have been elevated as follows:

  • 15% on the primary $50,197 of employment and “different earnings” (in contrast with the primary $49,020 in 2021)
  • 20.5% on $50,197 to $100,392 (versus $49,020 to $98,040)
  • 26% on $100,392 to $155,625 ($98,040-$151,978)
  • $29.38% on $155,625 to $221,708 (in contrast with 29.32% on $151,978-$216,511)
  • 33% on the quantity over $221,708 (versus $216,511)

The minimally greater tax charge utilized to the fourth bracket additionally applies to charges for capital positive factors and each forms of dividend earnings. The respective charges for capital positive factors (primarily based on one-half of positive factors being topic to tax), eligible dividend earnings (typically relevant to giant Canadian firms’ dividends) and to non-eligible dividends (these paid out by smaller Canadian firms) in every bracket are as follows: 

 

Capital Features

Eligible Dividend Revenue

Non-Eligible Dividends

Bracket 1

7.5%

-0.03%

6.87%

Bracket 2

10.25%

7.56%

13.19%

Bracket 3

13%

15.15%

19.52%

Bracket 4

14.69% (up from 14.66%)

19.81% (up from 19.73%)

23.41% (up from 23.34%)

Bracket 5

16.5%

24.81%

27.57%

 

Mixed Federal/Provincial

Particular person provinces even have adjusted their brackets accordingly. Right here is an summary of how this impacts mixed federal/provincial tax charges within the 4 greatest provinces:

  • Ontario’s lowest mixed federal/provincial bracket now applies to these with taxable earnings of $46,226 or much less, in contrast with $45,142 in 2021, and this tranche of earnings continues to be taxed at 20.05%. The highest bracket now applies to these with taxable earnings in extra of $221,708, versus $220,000 final yr, and is taxed at 53.53%. As a result of change in bracket threshold, a person with taxable earnings of $100,000 now pays tax at not more than 37.91%, in contrast with 43.41 % final yr.
  • In Quebec, the bottom mixed federal/provincial bracket is now capped at $46,295 versus $45,105 in 2021 and is taxed at 27.53% (unchanged). The highest bracket applies to quantities above $221,708, a rise from $216,511 final yr, and taxed at 53.31% (no change). A person with taxable earnings of $100,000 now pays tax at not more than 41.12%, in contrast with 45.71% final yr.
  • British Columbia’s lowest mixed federal/provincial bracket now reaches $43,070, up from $42,184 final yr and continues to be taxed at 20.06%. Its prime bracket applies to taxable earnings above $227,091, versus $222,420 in 2021. Somebody with $100,000 in earnings now pays most tax of 32.79%, down from 38.29%.
  • Alberta now has a backside mixed federal/provincial tax bracket ceiling of $50,197, up from $49,020 final yr, and continues to be taxed at 25%. Its prime bracket continues to be taxed at 48% and applies to earnings above $314,928, unchanged from 2022. A $100,000 particular person’s prime tax charge is now 30.5%, down from 36%.

Tax Credit

Here’s a abstract of adjustments to key federal non-refundable tax credit for 2022:

  • Primary Private Quantity: $14,398 (up from $13,808). Notice that this improve relies on an “enhanced” components that’s designed to deliver this quantity as much as $15,000 in 2023. No tax is payable on taxable earnings as much as this stage. (Excessive-income people could not profit from the enhancement attributable to a fancy income-test calculation.)
  • Age: $7,898 ($7,713). This credit score is out there to these age 65 and over and is step by step “clawed again” for many who reported internet earnings in 2021 of roughly $39,000 to $90,000, when the credit score is eradicated.
  • Incapacity: $8,870 ($8,662)
  • Pension earnings: $2,000 (unchanged)
  • Medical bills: $2,495 ($2,421) and continues to be capped at 3% of internet earnings

For provincial tax functions, these credit even have been equally elevated. For instance, in Ontario the fundamental private quantity relevant to provincial tax is now $11,141, up from $10,880 in 2021. In Quebec, the quantity is now $16,143, versus $15,728.

Contribution Limits

  • RRSP Greenback Restrict: The 2022 restrict is $29,210, up from $27,830 for 2021. This annual restrict can not exceed 18% of your earlier taxation yr’s earned earnings. The precise most contribution in any given yr is decided by your whole contribution room generated by unused contributions through the years.
  • TFSA Restrict: $6,000 (unchanged). For individuals who have by no means contributed to a TFSA, the cumulative restrict is now $81,500.
  • OAS Clawback Vary: Previous Age Safety earnings is taxed again for greater earnings recipients. For 2022, the clawback begins if taxable earnings is $81,761 and OAS should be fully repaid for many who make $133,141 or extra. This compares with the 2021 clawback vary of $79,845 to $129,581.
  • CPP Contributions: Premiums payable to the Canada Pension Plan (and the Quebec Pension Plan) have elevated to five.7% or an worker’s earnings from 5.45% in 2021. The utmost annual contribution for workers (and their employers) is now $3,499.80, in contrast with $3,166.45 in 2021. For self-employed people, the utmost is $6,999.60, up from $6,332.90. The yearly most pensionable earnings is now $64,900, up from $61,600 final yr. This is a rise of about 5.4%, the largest YMPE improve in 20 years, which is as a result of impact of the pandemic on the labour market. The rise for 2022 initially had been pegged at 3.4%.
  • EI Contributions: The utmost Employment Insurance coverage contribution for a person has risen to $952.74, up from $889.54 in 2021. The utmost annual insurable earnings is now $60,300, up from $56,300 final yr. 


Your 2022 Tax Calendar

Private Revenue Tax
-2021 RRSP contribution deadline: March 1 (The 2022 RRSP contribution deadline is March 1, 2023)
-Quarterly installment dates for 2022 earnings tax (if relevant, i.e., tax not deducted at supply): March 15, June 15, Sept. 15, Dec. 15
-Deadline for employers ship out T4 employment-income slips: finish of February
-Deadline for T5s to be despatched out: finish of February
-Deadline for T3s to be despatched out: finish of March
-Revenue tax return submitting deadline for people: Might 2 (The traditional submitting deadline of April 30 falls on a Saturday this yr.)
-Revenue tax return submitting deadline for self-employed people: June 15
-Deadlines for paying taxes owed:

  • People – Might 2
  • Self-employed people: Might 2

-Deadline to file deceased taxpayer’s return in respect of the yr of dying:

  • If dying occurred throughout 2021 between January and finish of October – Might 2
  • If occurred throughout November or December 2021- six months following the date of dying
  • Any excellent quantity of tax for the deceased are due on the above return-filing dates.

-RRIF conversion deadline: Dec. 31 (however realistically talking this ought to be organized earlier in December) 


Gross sales Taxes

(The next applies to self-employed particular person who file H/G/QST return yearly.)

-Quarterly installment dates for 2022 H/G/QST remittances: one month after the top of the interval
-Deadline to file H/G/QST return: June 15
-Deadline for paying any H/G/QST owing in extra of quantities paid by installment: Might 2



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