Personal Tax Credits

The basic personal amount (BPA) is a non-refundable tax credit that can be claimed by all individuals. The purpose of the BPA is to provide a full reduction from federal income tax to all individuals with taxable income below the BPA. It also provides a partial reduction to taxpayers with taxable income above the BPA.

A non-refundable tax credit reduces what you may owe. However if your total non-refundable tax credits are more than what you owe, you will not get a refund for the difference.

In 2020, the maximum BPA is increased from $12,298 to $13,229 for individuals with a net income of $150,473 or less. The increase is gradually reduced for individuals with net income between $150,473 and $214,368. If your net income is above $214,368, the change does not apply to you. Your BPA will be $12,298.

In addition, the maximum BPA will be increased to $15,000 by 2023 as follows:

• $13,808 for the 2021 taxation year,

• $14,398 for the 2022 taxation year, and

• $15,000 for the 2023 taxation year, and indexed for inflation for subsequent years.

Individuals whose net income is too high to benefit from the increased BPA will continue to claim the existing BPA. This existing amount will continue to be indexed for inflation each year.

Will this change affect the Spouse or common-law partner amount or the Amount for an eligible dependant?

Yes, the changes propose to increase the maximum Spouse or common-law partner amount and the Amount for an eligible dependant, in tandem with the proposed increases in the BPA. These amounts will also be gradually reduced for individuals with net income above $150,473 in 2020, and will continue to be reduced dollar-for-dollar based on the net income of the dependant.