December 2006
2007 Indexation Adjustment for Personal Income Taxes
Each year since 2000, personal income tax amounts have been indexed to inflation using the Consumer Price Index data, as reported by Statistics Canada.
Changes to tax bracket thresholds and non-refundable credits will take effect as of January 1, 2007. Adjustments to the Canada Child Tax Benefit (including the National Child Benefit supplement and the Child Disability Benefit) and the Goods and Services Tax Credit will take effect as of July 1, 2007, to coincide with the beginning of the "program year" for these benefits.
The following chart compares the indexed amounts for the 2006 and 2007 tax years and reflects an indexation adjustment of 2.2% in 2007.
| |
2007
|
2006
|
| |
($)
|
($)
|
| |
|
|
|
Personal Amounts and Bracket Thresholds
|
|
|
|
Basic personal amount [Footnote 1]
|
8,929
|
8,839
|
|
Spouse or common-law partner amount [Footnote 1]
|
7,581
|
7,505
|
|
Net income threshold [Footnote 1]
|
759
|
751
|
|
Taxable Income at which 22-per-cent bracket begins
|
37,178
|
36,378
|
|
Taxable Income at which 26-per-cent bracket begins
|
74,357
|
72,756
|
|
Taxable income at which 29-per-cent bracket begins
|
120,887
|
118,285
|
| |
|
|
|
Credit Amounts to Reflect Needs
|
|
|
|
Infirm dependant amount
|
4,019
|
3,933
|
|
Net income threshold
|
5,702
|
5,580
|
|
Caregiver amount
|
4,019
|
3,933
|
|
Net income threshold
|
13,726
|
13,430
|
|
Disability amount
|
6,890
|
6,741
|
|
Amount for children with disabilities
|
4,019
|
3,933
|
|
Allowable child care and attendant care expenses
|
2,354
|
2,303
|
|
Maximum adoption expense amount
|
10,445
|
10,220
|
|
Medical expense tax credit—3 per cent of net income ceiling
|
1,926
|
1,884
|
|
Maximum refundable medical expense supplement
|
1,022
|
1,000
|
|
Minimum earnings threshold
|
2,984
|
2,919
|
|
Family net income threshold
|
22,627
|
22,140
|
|
Age amount [Footnote 2]
|
5,177
|
5,066
|
|
Net income threshold
|
30,936
|
30,270
|
|
Old Age Security repayment threshold
|
63,511
|
62,144
|
| |
|
|
|
Goods and Services Tax Credit (GSTC) [Footnote 3]
|
|
|
|
Adult maximum
|
237
|
232
|
|
Child maximum
|
125
|
122
|
|
Single supplement
|
125
|
122
|
|
Phase-in threshold for the single supplement
|
7,705
|
7,539
|
|
Family net income at which credit begins to phase out
|
30,936
|
30,270
|
| |
|
|
|
Canada Child Tax Benefit [Footnote 3]
|
|
|
|
Base benefit
|
1,283
|
1,255
|
|
Additional benefit for third child
|
90
|
88
|
|
Additional benefit for children under 7 years [Footnote 4]
|
-
|
249
|
|
Family net income at which base benefit begins to phase out
|
37,178
|
36,378
|
| |
|
|
|
National Child Benefit (NCB) Supplement[Footnote 3]
|
|
|
|
First child
|
1,988
|
1,945
|
|
Second child
|
1,758
|
1,720
|
|
Third child
|
1,673
|
1,637
|
|
Family net income at which NCB supplements begins to phase out
|
20,883
|
20,435
|
|
Family net income at which NCB supplement phase-out is complete
|
37,178
|
36,378
|
| |
|
|
|
Child Disability Benefit
|
|
|
|
Maximum benefit
|
2,351
|
2,300
|
|
Family net income at which benefit begins to phase out
|
37,178
|
36,378
|
| |
|
|
|
Child Special Allowance (CSA)
|
|
|
|
CSA base amount
|
3,271
|
3,200
|
Notes:
[Footnote 1] The basic personal amount is indexed using a deemed base of $8,639. The spouse or common-law partner amount is indexed using a deemed base of $7,335, while the net income threshold is indexed using a deemed base of $734. The resulting amounts are then increased by $100 for the basic personal amount, $85 for the spouse or common-law partner amount, and $8.50 for the net income threshold. The deemed base amounts and other increases were specified in Budget 2006.
[Footnote 2] On October 31, 2006, the Minister of Finance proposed an increase in the age amount from $4,066 to $5,066 for 2006.
[Footnote 3] The GSTC and the Canada Child Tax Benefit (including the National Child Benefit supplement and Child Disability Benefit) are paid on a benefit-year cycle beginning in July.
[Footnote 4] The under 7 supplement is being phased out beginning in the 2006-07 benefit year.
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