One real change, two different returns
CRA lists a lowest federal income tax rate of 14.5% for the 2025 tax year and 14% for 2026. For 2026, that first bracket covers taxable income up to $58,523. These are bracket rates, not a flat tax on business revenue; provincial or territorial income tax is additional.
Suppose a freelancer is reviewing their 2025 return during 2026. The 2025 rate still belongs to that return. Planning for 2026 income means checking the 2026 table, which CRA labels for a return filed in 2027. This example selects the right year; it does not calculate the freelancer’s tax bill.
Copy this four-part checklist
- Tax year: Which year of income does the official page cover? Keep 2025 and 2026 records clearly labelled.
- Filing year: In which year is that return submitted? Do not use the date you press Submit to select the rate table.
- Effective date and status: Is this a proposal or an enacted rule, and which tax years does it cover? For the federal example above, the law received Royal Assent on March 12, 2026, but specifies separate rates for the 2025 and 2026 tax years.
- Province or territory: Does the item concern federal tax or a particular jurisdiction? Check the applicable provincial rules separately; moving or carrying on business across provinces may need extra review.
Three steps before changing your budget
Open the official page, fill in those four fields, then save its link and your checking date beside the relevant year’s records. Use Umadeit’s tax-calendar resource to organise dates and the T2125 checklist to prepare business records. A lower first-bracket rate alone is not a reason to set aside only 14% of sales for tax.
Mistakes this check prevents
Avoid using a news article’s date as the effective date, mixing records from different tax years, or treating a federal rate as your total tax cost.
Quick questions about tax years
Does a 2026 filing use 2026 rates?
Not automatically. CRA identifies the 2025 return as filed in 2026. Check the year shown on the return.
Is a budget announcement enough?
Use it as a lead. Confirm the measure’s current status, conditions and applicable dates in official sources.
Will a bookkeeping app confirm every policy change?
Do not assume that. Keep the official source with your records and ask CRA or a qualified adviser about your circumstances. This article provides general information, not personal tax advice.