Income Split after July 1, 2025 Tax Rate

[DA0]

Majority of my income earned after July 1, 2025 canadian tax rate change. Can this be taxed at the 14% rated rather than the 14.5% rate default in turbo tax? if so how would that be done?

[TurboTaxAniqua]

For the 2025 tax year, the lowest federal income tax rate is legally set at a blended 14.5%, not 14%, even if the majority of income is earned after July 1, 2025, when the rate dropped from 15% to 14%. This 14.5% rate is calculated automatically by tax software, including TurboTax Canada. 

• The 1% reduction applies only to the second half of the year, making the average (blended) rate for the entire year 14.5% (15% for January–June, 14% for July–December).
• The 14% rate takes full effect for the 2026 tax year.
• No, you cannot pick the 14% rate in your 2025 return, as the blended 14.5% rate is mandatory to account for the first half of the year.
• Continue using TurboTax as normal; it will properly calculate the 14.5% rate on the first $57,375 of taxable income for the 2025 tax year. 

The 14% rate applies to the 2026 taxation year, which you will file in 2027

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