The Canada Revenue Agency (CRA) has announced an extension for taxpayers reporting capital gains or losses in 2024, allowing them extra time to file their returns without penalties or interest. This relief applies to individuals, trusts, and corporations, aligning with the government’s recent delay in increasing the capital gains inclusion rate.
This move follows the federal government’s decision to postpone the capital gains inclusion rate hike from June 25, 2024, to January 1, 2026. As a result, capital gains will continue to be taxed at the current 50-percent inclusion rate until the new deadline.
Who Is Eligible for the Extended CRA Tax Deadline?
Individual Taxpayers
- Those reporting capital gains or losses in 2024 now have until June 2, 2025, to file their T1 personal income tax return without late-filing penalties or interest.
- The standard tax filing deadline for individuals remains April 30, 2025, but those affected by capital gains rules get an extra month.
Trusts Reporting Capital Dispositions
- Trusts filing a T3 tax return for 2024 capital dispositions now have until May 1, 2025, to file without penalties.
- The usual T3 filing deadline is March 31, 2025 for trusts with a calendar year-end.
Corporations Reporting Capital Gains
- Corporations can continue using the existing tax forms and software to report capital gains at the 50-percent inclusion rate.
- Corporations that already filed using the two-thirds inclusion rate based on prior CRA guidance will have their tax assessments corrected automatically.
How Does the Capital Gains Inclusion Rate Affect Taxpayers?
The capital gains inclusion rate determines the taxable portion of a capital gain. Under current rules, 50 percent of capital gains are included in taxable income.
In the 2024 federal budget, the government proposed increasing this rate to 66.7 percent starting June 25, 2024. However, due to delays in passing legislation, this change has now been pushed back to January 1, 2026.
Until then:
- Capital gains realized before January 1, 2026, will be taxed at 50 percent.
- If the new law is enacted, gains after January 1, 2026, will be taxed at 66.7 percent.
- Individuals and certain trusts will still have access to the lower 50-percent rate on capital gains up to $250,000 per year.
What Should Taxpayers Do Next?
For Individuals Filing 2024 Capital Gains Taxes
- If you have a capital gain or loss in 2024, take advantage of the extended filing deadline (June 2, 2025).
- Use the 2024 Schedule 3: Capital Gains or Losses form to report gains from both before and after June 25, 2024.
- The 2024 tax season begins on February 24, 2025, so electronic filing is available from that date.
For Trusts Reporting Capital Gains
- Ensure that your T3 tax return reflects the correct capital gains inclusion rate.
- If a trust has already filed under the proposed two-thirds rate, CRA will not retroactively apply changes.
For Corporations That Already Filed at the Higher Rate
- CRA will automatically adjust filings where businesses used the 66.7-percent inclusion rate based on earlier guidance.
- Companies should review their filings to ensure compliance with CRA’s latest updates.
Why Did the CRA Delay the Capital Gains Inclusion Rate Increase?
The Liberal government initially planned to raise the capital gains inclusion rate from 50 percent to 66.7 percent effective June 25, 2024. However, this legislation was not passed before Parliament was prorogued in 2024.
Due to this delay:
- The 50-percent inclusion rate remains in effect until at least January 1, 2026.
- The CRA had to revise its earlier tax guidance to reflect the postponed implementation.
- Taxpayers now have extra time to adjust their tax planning strategies accordingly.
What Are the Key Takeaways from CRA’s Announcement?
- Individual taxpayers with 2024 capital gains have until June 2, 2025, to file their T1 return.
- Trusts reporting capital gains have until May 1, 2025, to file a T3 return without penalties.
- Corporations using the incorrect inclusion rate will have their assessments automatically corrected by CRA.
- The capital gains inclusion rate will remain at 50 percent until January 1, 2026.
- Taxpayers should use the correct Schedule 3 form for reporting 2024 capital gains.
FAQs
What is the new deadline for filing 2024 capital gains taxes?
Individuals reporting capital gains in 2024 now have until June 2, 2025, to file without late penalties or interest.
Do trusts also get an extension for capital gains reporting?
Yes, trusts filing a T3 return for capital gains in 2024 now have until May 1, 2025, to file.
Has the CRA officially changed the capital gains inclusion rate?
No, the capital gains inclusion rate remains at 50 percent until at least January 1, 2026.
Why did the CRA extend the filing deadline for capital gains?
The extension gives individuals and trusts more time to comply with tax-filing obligations following the delayed inclusion rate increase.
How do I report my 2024 capital gains?
Use the 2024 Schedule 3: Capital Gains or Losses form, which includes separate reporting for gains before and after June 25, 2024.
What happens if I already filed at the two-thirds inclusion rate?
CRA will automatically correct corporate tax filings that used the two-thirds inclusion rate before the delay was announced.
Can I still claim the 50-percent inclusion rate in 2025?
Yes, the 50-percent inclusion rate applies to all capital gains before January 1, 2026.
When does the 2024 tax season officially begin?
The CRA starts accepting electronic tax returns on February 24, 2025.
Aanchal is a passionate writer with a keen interest in storytelling, content creation, and creative expression. She enjoys exploring diverse topics and crafting engaging narratives that captivate readers.
