RRSP Deadline is Fast Approaching

Jonathan Adomait |
Categories
RRSP's

I hope you had a wonderful holiday season and a chance to recharge with family and friends. As we move into 2026, there are several key financial updates and deadlines to keep on your radar for the coming months.

1. The RRSP Deadline: March 2nd

The clock is ticking for your 2025 tax year contributions. To reduce your taxable income for last year, all RRSP contributions must be made by Monday, March 2, 2026. If you are looking to offset a high tax bill from 2025, now is the time to finalize those deposits.

2. TFSA Limits Reach a New Milestone

The annual TFSA contribution limit for 2026 remains at $7,000, adjusted for inflation. If you have been 18 or older and a resident of Canada since the program’s inception in 2009, your total cumulative contribution room has now reached $109,000. This is a significant bucket for tax-free growth that we should look to maximize wherever possible.

3. Scaling Your FHSA

If you opened a First Home Savings Account (FHSA) in 2025 but didn't fully fund it, you may have up to $16,000 in contribution room available this year ($8,000 from 2026 plus up to $8,000 in carry-forward room). Remember, these contributions provide a tax deduction just like an RRSP, but the withdrawals are tax-free when used for a home purchase—offering the best of both worlds.

4. Higher CPP Ceilings (CPP2)

We are now in the third year of the "CPP Enhancement." For 2026, the first earnings ceiling (YMPE) is $74,600. However, the second tier (CPP2) now applies to income up to $85,000. If your income is above this level, you will notice these additional contributions being deducted from your payroll until you hit the new, higher cap.

5. Updated Ontario Tax Brackets

Tax brackets have been adjusted upward again to account for inflation, which helps prevent "bracket creep." For 2026:

  • The Lowest Bracket: Income up to $53,891 is taxed at a combined rate of approximately 19.05%.
  • The Top Bracket: Income over $258,482 is taxed at the top marginal rate of 53.53%.

Next Steps

If you would like to review your specific contribution room or discuss a strategy for the March 2nd deadline, please reach out. Otherwise, I will be in touch shortly to catch up and ensure your 2026 plan is on track.

Best,

Jon


Jonathan Adomait
Financial Planner | CFP, CIM, B.Eng