As you are likely aware, your Canada Pension Plan (CPP) contributions increased on January 1, 2019, and will continue to increase each year until 2023 (or 2024 if your income exceeds a new earnings ceiling). Similar enhancements were made to the Quebec Pension Plan (QPP).
When you file your personal income tax return for the 2019 tax year, take note that your CPP/QPP contributions consist of a base amount and an enhanced amount. While a non-refundable tax credit on the CPP/QPP base amount continues to be available, a new tax deduction — instead of a tax credit — can be claimed on the enhanced portion of the CPP/QPP. The maximum amount of the new tax deduction for 2019 is $80.85.
This tax tip is a publication of BDO Canada LLP on developments in the area of taxation. This material is general in nature and should not be relied upon to replace the requirement for specific professional advice. The information in this tax tip is current as of February 5, 2020.