When Canadians sit down to prepare the tax return for the 2025 tax year, the forms they use will appear to most taxpayers to be identical to the ones completed at this time last year. That appearance is deceptive, as the tax return form is never the same from one year to the next. In some cases, the change is one which happens each year – the increase in taxable income brackets and tax credit amounts resulting from the indexing of those amounts for inflation. Those changes are built into the figures which appear in the return form, and the taxpayer doesn’t need to do anything in order to benefit from such changes when completing and filing the return.

That’s not necessarily the case for other tax changes. Each year, new tax measures are introduced. In addition, the rules on the computation of income can be changed and existing tax deductions and credits can be extended, changed, or withdrawn altogether. In such cases, it’s up to the taxpayer to make sure that income is accurately reported and a claim is made for every deduction and credit available under the current rules – and conversely, to ensure that claims are not made for deductions or credits for which the taxpayer is not eligible for 2025.

At the beginning of tax filing season, the Canada Revenue Agency (CRA) posts information on its website to alert taxpayers to the substantive tax changes which they will find when completing their tax return, as well as any changes made to the Agency’s administrative policies and practices which could affect taxpayers who are filing their return for 2025. Such information is also highlighted in the General Income Tax and Benefit Guide for 2025. This year, the substantive tax changes made are relatively narrow and technical in nature, affecting only taxpayers who do specific types of work, or who have specific living or health circumstances, or those who make particular types of investments. Most of this year’s changes relate to tax administration – the policies and procedures which govern the completion and filing of returns for 2025.

The changes to such administrative policies and procedures include the following.

Changes to EFILE

Most Canadian taxpayers do not prepare and file their own returns. During last year’s filing season, 60% of returns were filed using EFILE, a system in which an accredited EFILER prepares a taxpayer’s return and files it electronically with the CRA on the taxpayer’s behalf. (Individual taxpayers can also prepare and file their own tax returns electronically, but such filings are done using the CRA’s NETFILE service.)

To properly prepare and EFILE a return, the EFILER needs to have access to the information found in the taxpayer’s online tax CRA account. In previous filing seasons, such access could be gained using the “Authorize a Representative” function found in EFILE software for individuals.

That was changed beginning July 15, 2025, and an EFILER can no longer use EFILE software to request access to another taxpayer’s online tax account. Instead, EFILERS must request such online access through the “Represent a Client” function on the CRA website, and the access will be provided only once the taxpayer confirms it within their CRA account.

More information on changes to the CRA’s processes for naming and authorizing a representative can be found at https://www.canada.ca/en/revenue-agency/services/tax/representative-authorization/confirm-representative.html#individual.

Regaining access to a CRA account

For good reason, the online CRA accounts of taxpayers are protected by multiple levels of security. To access their accounts, taxpayers must enter a UserID and password. As well, at the time the taxpayer is logging in, they are sent a one-time six-digit numeric code as part of the Agency’s Multi-Factor Authentication requirement, and must enter that code.

Most taxpayers don’t log into their online CRA accounts that frequently, and so it’s not that unusual for a taxpayer to forget or mislay their login information. As well, if a taxpayer inputs the incorrect User ID or password too many times in an attempt to get it right, their online account will be locked and therefore inaccessible.

In previous years, taxpayers who were locked out of their CRA online accounts or simply forgot their login information had to call the CRA to re-establish access – a process which could take some time, especially during tax filing season.

The CRA has now instituted a self-service option which enables taxpayers to regain access to their online account where they have forgotten or misplaced their log-in credentials, have been locked out of their account, or simply want to change their sign-in options. Information on how to do that is available on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/cra-login-services/help-cra-sign-in-services/cra-userid-password.html#section3.

Change in marital status during 2025

The marital status of a taxpayer has a significant effect on the types of tax deductions and credits for which they may be eligible. Generally speaking, where a taxpayer is married (or living common-law) their eligibility, especially for tax credit or benefit programs like the Goods and Services/Harmonized Sales Tax Credit or the Canada Child Benefit, is determined, in part, by the combined income of both spouses, and is not based on individual income. As well, the ability to claim personal tax credits, like the spousal tax credit, or to make a spousal registered retirement savings plan contribution, depends on the taxpayer having a spouse at the end of the tax year.

Consequently, a change in marital status usually has an effect on one’s eligibility for a variety of tax deductions and credits and the ability to engage in particular tax planning strategies. The CRA’s listing of income tax changes for 2025 includes a reminder that taxpayers are required to inform the CRA of a change in marital status by the end of the following month after that status has changed. Where a taxpayer’s marital status changed during 2025, they must enter the date of the change on page 1 of the tax return. Taxpayers who must do so should be aware that the CRA will recalculate benefits and credits received based on the new marital status, which could mean either increased or decreased eligibility for benefits and credits.

One final point – while the general rule is that a change in marital status must be communicated to the CRA by the end of the month following the month of the change, that’s not the case where a couple separates. A separation does not generally exist (for tax purposes) until the spouses have lived separate and apart for 90 days, as the result of a breakdown in their relationship. Once that 90-day separation period has passed, the taxpayer must inform the CRA that they are now separated, and the effective date of that separation, for tax purposes, will be the date the spouses began living apart.

When it comes to substantive changes to tax rules for 2025, the only change which will affect all taxpayers is a reduction in the tax rate applied to the first income tax bracket (for 2025, income up to $57,375). Effective as of July 1, 2025, that rate was reduced from 15.0% to 14.0%. Because the change took effect mid-year, the effective tax rate for 2025 on the first income bracket is 14.5%. As with changes in tax bracket and tax credit amounts, the tax rate reduction is built into the tax return form (or tax return software), and there’s no need for the taxpayer to do anything to benefit from the change.

That’s not the case for other substantive changes to the tax system which took effect in 2025. Those changes are relatively technical and narrow in effect, but should be noted by the taxpayer groups who are affected by them. A listing of such changes, with links to the information provided by the CRA on the nature and effective date of those changes, is set out below.

• Capital gains deduction for qualifying business transfers or qualfying cooperative conversions
• Capital gains rollover for small business shares
• Expansion of the critical mineral exploration tax credit
• Disability supports deduction
• Mineral exploration tax credit
• Northern residents deductions
• Return of fuel charge proceeds to farmers tax credit

For those using the Income Tax and Benefit Guide for 2025 in completing their return, each of these changes is highlighted in the Guide.

The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.