As usual, several tax rates, limits and credits are changing for 2021 and tax year 2020 .
Federal and provincial income tax brackets are increasing to keep up with inflation. The rates for each bracket remain unchanged.
The basic personal amount for 2020 is $13,229, up from $12,896 in 2019. In Quebec, the new amount is $15,532, up from $15,269.
Employment Insurance (EI) Premiums are staying steady at 1.58% in 2020. However, maximum insurable earnings will increase from $54,200 to $56,300. This will, in effect, increase the amount of premiums you will pay if you earn more than $54,200.
In Quebec, required contributions to the Quebec Parental Insurance Plan (QPIP) have increased to .692% to a maximum of $543.22.
Maximum pensionable earnings, the amount used by the government to calculate Canada’s Pension Plan contributions for the year, is increasing to $61,600 in 2021, up from $58,700 in 2020. Similarly, the employee and employer contribution rates for 2021 will be increasing by 5.45%, up from 5.25% in 2020. In Quebec, the contribution rate is 5.70%. There is no change to the Yearly Basic Exemption (YBE).
As was the case last year, the Canada Child Benefit will continue to be indexed to inflation. In 2021, the maximum a parent can receive is $6,765 for children under age 6 (up from $6,639 in 2020) and $5,708 for children ages 6 to 17 (up from $5,602 in 2020).
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