The latest federal budget includes a few personal tax changes that could impact many Canadians over the next few years. Here’s a quick overview of what’s coming.
Personal Support Workers Tax Credit (new)
Starting in 2026, personal support workers employed by approved health-care organizations may qualify for a new refundable tax credit worth 5% of eligible earnings, up to $1,100 per year.
To qualify, the individual must perform duties in the capacity of a personal support worker, providing one-on-one care and essential support to help someone with their health, safety, comfort, or independence, under the direction of a regulated health-care professional or recognized health organization.
Because this credit is refundable, it means you can receive the benefit even if you don’t owe any income tax. The measure is temporary and will apply for the 2026 to 2030 tax years.
Top-Up Tax Credit (new)
The government plans to gradually reduce the lowest federal tax rate—from 15% down to 14.5% in 2025, and 14% in 2026 and beyond.
While that’s good news overall, it would normally reduce the value of many non-refundable credits (like the Basic Personal Amount). To offset that, a new Top-Up Tax Credit will be introduced to keep the value of these credits effectively at 15% for most taxpayers.
This change will apply for the 2025 through 2030 tax years.
Home Accessibility Tax Credit (update)
Currently, some renovation expenses can qualify for both the Medical Expense Tax Credit and the Home Accessibility Tax Credit.
Beginning in 2026, those expenses can only be claimed under one of the two credits—not both. This change is designed to simplify claims and avoid overlap between programs.
What this means
Overall, these updates are meant to:
- Provide direct support to personal support workers,
- Ensure Canadians don’t lose the value of key tax credits as rates change, and
- Simplify how home renovation-related claims are handled.
If you think any of these might apply to you—or you’d like help understanding how they could fit into your 2025 or 2026 return—feel free to reach out.
Source: 2025 Federal Budget Tax Highlights – Chartered Professional Accountants of Canada