2008 Indexation Adjustment for Personal Income Taxes

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The following is now available on the CRA Web site:

Fact Sheet

Each year, certain personal income tax amounts are indexed to inflation using the Consumer Price Index data, as reported by Statistics Canada.

Increases to tax bracket thresholds, personal amounts and other amounts relating to non-refundable credits, as well as the refundable medical expense supplement and Old Age Security repayment threshold, will take effect as of January 1, 2008. Increases to the Canada Child Tax Benefit (including the National Child Benefit supplement and the Child Disability Benefit) and the Goods and Services Tax Credit will take effect as of July 1, 2008, to coincide with the beginning of the “program year” for payment of these benefits.

The following chart compares the indexed amounts for the 2007 and 2008 tax years. It reflects an indexation increase of 1.9% for 2008.

 

2008
($)

2007
($)

Tax Bracket Thresholds

Taxable Income above which the 22-percent bracket begins

37,885

37,178

Taxable Income above which the 26-percent bracket begins

75,769

74,357

Taxable income above which the 29-percent bracket begins

123,184

120,887

Personal Amounts and Other Amounts Relating to Non-refundable Tax Credits

Basic personal amount (See note below)

9,600

9,600

Age amount

5,276

5,177

Net income threshold

31,524

30,936

Spouse or common-law partner amount (See note below)

9,600

9,600

Amount for an eligible dependant (See note below)

9,600

9,600

Amount for children under age 18 (maximum per child)

2,038

2,000

Canada employment amount

1,019

1,000

Caregiver amount

4,095

4,019

Net income threshold

13,986

13,726

Disability amount

7,021

6,890

Supplement for children with disabilities

4,095

4,019

Allowable child care and attendant care expenses

2,399

2,354

Maximum adoption expense amount (per adoption)

10,643

10,445

Medical expense tax credit—3 percent of net income ceiling

1,962

1,926

Refundable medical expense supplement

Maximum supplement

1,041

1,022

Minimum earnings threshold

3,040

2,984

Family net income threshold

23,057

22,627

Old Age Security repayment threshold

64,718

63,511

Goods and Services Tax Credit (GSTC)

Adult maximum

242

237

Child maximum

127

125

Single supplement

127

125

Phase-in threshold for the single supplement

7,851

7,705

Family net income at which credit begins to phase out

31,524

30,936

Canada Child Tax Benefit

Base benefit

1,307

1,283

Additional benefit for third child

91

90

Family net income at which base benefit begins to phase out

37,885

37,178

National Child Benefit (NCB) Supplement

First child

2,025

1,988

Second child

1,792

1,758

Third child

1,704

1,673

Family net income at which NCB supplement begins to phase out

21,287

20,883

Family net income at which NCB supplement phase-out is complete

37,885

37,178

Child Disability Benefit

Maximum benefit

2,395

2,351

Family net income at which benefit begins to phase out

37,885

37,178

Child Special Allowance (CSA)

CSA base amount

3,332

3,271

Note:

Under changes announced on October 30, 2007, in the 2007 Economic Statement, the basic personal amount, the maximum spouse or common-law partner amount, and the amount for an eligible dependant are increased to $9,600 for the 2007 and 2008 tax years.

As announced in the 2007 Federal Budget, the net income threshold has been eliminated effective for 2007 and subsequent tax years. The spouse or common-law partner amount and the amount for an eligible dependant are calculated by subtracting the net income for the spouse/common-law partner or the dependant, as applicable, from the maximum amount ($9,600 for 2007 and 2008).

SOURCE: CRA Media Room

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