The 2025 tax season is well underway, but the Canada Revenue Agency doesn’t want Canadians who earned capital gains last year to file their returns – just yet.
The CRA said in a news release Tuesday that it’s still working to update its systems to reflect the current inclusion rate of 50 per cent on capital gains after a last-minute reversal by the federal government, so taxpayers who earned capital gains on an asset should wait to file their T1 and T3 returns.
“The CRA recommends that those impacted by this situation wait until the updates are completed in the coming weeks before filing their income tax and benefit return,” the agency said.
CRA spokesperson Sylvie Branch told Global News the tax forms have been restored to the current rate, but changes to the systems and the corresponding certification of tax software are being finalized for capital gains reporting.
“Tax preparation software have started to be certified for tax returns reporting capital dispositions and most are expected to be certified before the end of March,” she said in an emailed response Thursday.
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“Until the certification process is finalized for a particular tax software, users may not be able to print or submit their tax return to the CRA,” Branch said.
“Until the CRA’s system changes are finalized, the notice of assessment for the tax return that has been submitted cannot be finalized.”
To give taxpayers with capital gains more time to file their returns, the CRA said it will waive any penalties and interest for individuals until June 2 and May 1 for trust filers.
The deadline for most individuals to file and pay any taxes owed is April 30 after which they may face penalties and interest.
Capital gains are the proceeds from the sale of an asset like a stock or an investment property.
In Budget 2024 last spring, the Liberals proposed that the inclusion rate would rise to 66.7 per cent from 50 per cent on any gains realized above $250,000 annually for individuals.
Under the changes, the two-thirds inclusion rate would apply to all such gains made by corporations and many trusts.
After months of uncertainty about the planned hike to the inclusion rate for taxable capital gains, the federal government announced in January that it was delaying the proposed changes until next year.
So, the planned increase to the capital gains inclusion rate will not be implemented until Jan. 1, 2026.
But, as directed by a notice of ways and means motion in September 2024, the CRA was already administering the Liberals’ proposed 66.7 per cent inclusion rate, before Ottawa decided to push back the date for the increase to take effect.
Global News has reached out to the CRA to inquire about when the system will be updated and is awaiting a response.
© 2025 Global News, a division of Corus Entertainment Inc.
Have capital gains to report? CRA says don’t file tax returns just yet
