How 2025 life events affect your tax return

The Canada Child Benefit (CCB) begins in the month after birth or adoption. Both parents must file their 2025 returns for CCB to be calculated correctly for July 2026 onward. Register the child with Service Canada as soon as possible.

The childcare deduction applies to eligible expenses paid in 2025: $8,000 per child under 7, $5,000 for ages 7–16. The lower-income spouse must claim it. Keep all receipts.

Maternity and parental EI benefits are reported on a T4Eslip and are taxable income. Income tax is not automatically withheld at source from EI — you may have a balance owing if you didn't request additional withholding.

Consider opening an RESP — the Canada Education Savings Grant (CESG) provides 20% on the first $2,500 contributed per year, starting from the year of birth.

Update your marital status on your T1 return for 2025. Common-law status begins after 12 continuous months of cohabitation, or immediately if you have a child together.

A spousal or common-law partner amount may be available if your partner's net income was below the BPA ($15,705 for 2025). The credit reduces as their income rises and is eliminated at approximately the BPA level.

Pension income splitting becomes available: up to 50% of eligible pension income can be allocated to a lower-income spouse, reducing combined household tax. This is done on Form T1032.

GST/HST credit and CCB are calculated on combined household income from the year of marriage or common-law status. Notify CRA of the status change via My Account.

Update your marital status on your T1 as of the date of separation. GST/HST credit and CCB are recalculated based on your individual income from that date, which can result in increased benefit payments.

Child support payments are not deductible for the payer and not taxable income for the recipient — they are invisible to the tax system. Spousal support payments under a written agreement or court order are deductible for the payer and taxable income for the recipient.

The eligible dependant credit(formerly "equivalent-to-spouse") may be available to a single parent supporting a child under 18. This credit is mutually exclusive — only one parent can claim it, and the support payer is generally not eligible.

Shared custody (at least 40% of the time with each parent) splits the CCB equally between parents. Notify CRA of the custody arrangement.

The First-Time Home Buyers' Tax Credit gives you a $10,000 amount (line 31270) that produces a $1,500 federal credit at 15%. You qualify if neither you nor your spouse owned a principal residence in any of the four preceding years.

If you used the RRSP Home Buyers' Plan (HBP), repayments begin two years after the year of withdrawal. Repayments are not deductible — they restore RRSP room without providing a tax deduction. Track your repayment schedule in CRA My Account.

FHSA qualifying withdrawals are completely tax-free when used to purchase a qualifying first home. Include Form RC725 with your return in the year of withdrawal.

Several provinces offer land transfer tax rebates for first-time buyers — Ontario (up to $4,000), BC (up to $8,000), and others. These are claimed provincially, not on your T1.

You must report the sale on Schedule 3 even if the property is fully exempt as your principal residence. CRA has required designation since 2016. Failing to report can result in penalties and the loss of exemption for years not properly designated.

For a principal residence, you designate it on Schedule 3 and the gain is generally exempt from tax. Only one property per family unit per year can be designated.

For non-principal-residence property (cottage, rental, investment property), the capitalgain is reportable. The capital gains inclusion rate for dispositions in 2025 depends on timing and the size of your annual gains. For gains realized before June 25, 2024, the inclusion rate is 1/2. For gains realized on or after June 25, 2024, the first $250,000 of annual capital gains for individuals is still included at 1/2 — only the portion above $250,000 per year is included at 2/3. Most Canadians selling a single property with a moderate gain will use the 1/2 rate on the full amount. Consult a tax professional if your annual gains exceed $250,000.

Rental properties have recaptured CCA (Capital Cost Allowance) to consider — this is ordinary income, not a capital gain. Consult a tax professional for properties with significant depreciation claimed.

At 65 you become eligible for the Age Amount — a federal credit of $8,396 for 2025, phasing out above $42,335 net income. Your provincial equivalent also kicks in at 65.

The Pension Income Amount allows you to claim up to $2,000 of eligible pension income (RRIF withdrawals, defined benefit pension, life annuities) as a non-refundable credit. CPP and OAS do not qualify.

Pension income splitting becomes available: up to 50% of eligible pension income can be allocated to your spouse using Form T1032, reducing combined household tax.

CPP (T4A(P)) and OAS (T4A(OAS)) are both taxable income. You can request voluntary tax withholding from Service Canada to avoid a balance owing at filing.

If you turn 71 in 2025, you must convert your RRSP to a RRIF or annuity by December 31, 2025. Any RRSP room used in 2025 before conversion is still deductible.

Self-employment income (and losses) are reported on Form T2125 (Statement of Business or Professional Activities). Business expenses — home office (pro-rated), vehicle (log required), supplies, professional fees — are deductible against business income.

If your gross self-employment revenue exceeded $30,000 in any single quarter or over four consecutive quarters, you must register for and collect GST/HST. File GST/HST returns separately from your T1.

Self-employed individuals pay both the employee and employer share of CPP — effectively double the rate of an employee (11.9% on net self-employment income for 2025). This is the single largest financial surprise for new self-employed Canadians.

If your net tax owing exceeds $3,000 ($1,800 in Quebec) in 2025 and either prior year, CRA will require quarterly instalment payments for 2026. Voluntary instalments prevent interest charges.

Moving expenses are deductible if you moved at least 40 kilometres closer to a new place of work or post-secondary institution, and you earned employment or self-employment income at the new location (or received scholarships/bursaries as a student).

Eligible expenses include: transportation and storage of household effects, travel costs (vehicle, meals, accommodation en route), temporary housing (up to 15 days), cost of maintaining the old residence while trying to sell, legal fees and real estate commission on the sale, and costs of cancelling a lease.

The deduction is limited to income earned at the new location — you cannot create a loss with moving expenses, but unused amounts carry forward to the next year. Claimed on Form T1-M.