Inflation-influenced tax bracket thresholds also revealed
The TFSA contribution limit for 2023 has been revealed by the CRA, with spiking inflation prompting the first increase since 2019.
The limit has gone up to $6,500 from $6,000. The total is indexed to inflation and rounded to the nearest $500, with this year’s 6.3% indexation increase up from 2.4% in 2022.
This means that the total contribution room available in 2023 for someone who has never contributed, and has been eligible since its inception in 2009 is $88,000.
The Federal tax brackets were also announced by the CRA – and will also be adjusted higher for 2023. They are as follows:
- The 33.0% tax rate begins at taxable income of over $235,675, up from $221,708 in 2022.
- The 29.0% tax rate begins at taxable income of over $165,430, up from $155,625 in 2022.
- The 26.0% tax rate begins at taxable income of over $106,717 up from $100,392 in 2022.
- The 20.5% tax rate begins at taxable income of over $53,359, up from $50,197 in 2022.
- Income up to $53,359 is taxed at 15.0%.
