Updated Checked by the Tax-Services.ca editorial team How we check
Federal tax exemptions, in the old sense of a flat amount you knock off your income, aren’t how the federal return works now. You get non-refundable credits instead. The biggest is the basic personal amount, $16,452 for 2026, and it saves you about $2,303 of federal tax (that’s the amount times the lowest federal rate, 14%).
What counts as a federal tax exemption today?
People still use the word for anything that shields income from tax. In practice you’ll meet three things. A credit multiplies an amount by the lowest rate and comes off the tax you owe. A deduction, like an RRSP contribution, lowers the income the tax is worked out on. And some savings are set up to grow tax free. The tax-free savings account is the usual one, with a 2026 limit of $7,000 (check the CRA page for the conditions).
The difference matters when you’re comparing. A $1,000 deduction and a $1,000 credit are not the same size. The deduction saves your top rate on $1,000. The credit saves 14% of it. For someone whose top federal rate is 20.5%, that’s $205 against $140.
Which federal amounts can you claim for 2026?
These are the main claim amounts the CRA lists for 2026, after a 2% indexation. The CRA’s page on indexation of personal income tax and benefit amounts gives the same basic personal, age and TFSA figures. The last column below is our own arithmetic: amount times 14%.
| Amount | 2026 figure | Worth about |
|---|---|---|
| Basic personal amount, maximum | $16,452 | $2,303 |
| Basic personal amount, high income | $14,829 | $2,076 |
| Age amount (65 and over) | $9,208 | $1,289 |
| Disability amount | $10,341 | $1,448 |
| Canada caregiver, child, spouse or dependant | $2,740 | $384 |
| Canada caregiver, other infirm dependant, maximum | $8,773 | $1,228 |
| Medical expenses, 3% ceiling | $2,890 | n/a |
Two of these fade with income. The age amount starts to shrink once net income passes $46,432. The basic personal amount stays at the maximum up to a net income of $181,440, then slides to the lower figure by $258,482.
How much tax does the basic amount really save?
Take a taxable income of $30,000. Before any credit, 14% of it is $4,200. The basic personal amount takes off $2,303, so the federal tax comes to about $1,897. That matches what our income tax calculator shows for federal tax at that income, with no other credits.
Now $60,000. The first $58,523 is taxed at 14% and the rest at 20.5%, which is about $8,496 before credits. Take off $2,303 and you owe about $6,193. So the same credit saved a person on $30,000 more than half their bill and a person on $60,000 under a third.
Stack a second amount on the $30,000 example and the picture changes fast. Someone who also qualifies for the disability amount gets another $1,448, which leaves about $449 of federal tax ($1,897 minus $1,448). Add a caregiver claim of $384 and the bill is down to roughly $65. That’s why the claim lines are worth reading one by one: each looks small, but together they can wipe out a low earner’s federal tax entirely.
That’s the honest picture of exemptions. They help everyone by the same dollar amount, so they matter most to people with the smallest incomes. Add your age, disability or caregiver claims in the tax credits calculator. Note it’s federal only, so your province’s own credits aren’t in it.
Can a credit give you a refund on its own?
No. These credits are non-refundable, which means they can bring your tax down to zero but never below it. If you get money back after a big credit, that money is tax your employer had already taken off your pay cheques during the year. Think of the credit as a coupon that only works against a bill you actually have.
Where do people go wrong with credits?
The first mistake is claiming an amount you can’t support. The disability amount and the caregiver amounts come with conditions, and the caregiver one is tied to the dependant’s own net income, with a threshold of $20,601. Check the CRA’s page for each line before you claim it. The disability tax credit calculator gives a rough idea of what approval is worth.
Second, forgetting your province. Each province and territory has its own basic amount and its own credit rate, so your real saving isn’t the federal one alone. And there are other federal amounts we haven’t listed. The home buyers’ amount (up to $10,000, worth up to $1,500 as a credit) and the donation credit (14% on the first $200 for 2026) are two we left out of the calculator.
Third, trusting last year’s numbers. The amounts above went up 2% for 2026, so a figure you remember from a past return at tax time is probably a little low now.
If you want to see whether a claim changes your refund, the tax refund calculator is the quickest check.
What this page is based on
The 2026 claim amounts, bracket thresholds and the 2% indexation come from the Canada Revenue Agency‘s indexation page, and the rates from its 2026 tax rates page. The TFSA limit is on the same indexation page. The tax examples are our own arithmetic on those figures. No government body has reviewed or endorsed what you read here.
Frequently asked questions
Is there a personal exemption in Canada?
Not as a deduction from income. Everyone claims the basic personal amount as a credit, $16,452 at most for 2026, worth about $2,303 of federal tax.
Who gets the age amount?
People 65 and over. It's $9,208 for 2026 and it shrinks once net income passes $46,432.
Can a credit give me a refund?
Not by itself. Non-refundable credits can cut your tax to zero. A refund comes from tax already withheld or paid.
Is a TFSA a tax exemption?
It's built to be tax free, with conditions on the CRA's TFSA page. The 2026 contribution limit is $7,000.
Do provinces have their own amounts?
Yes. Each has its own basic amount and credit rate, so the federal saving is only part of your total.
- How Canadian income tax works: brackets and credits
How federal and provincial Canadian income tax stack up, what marginal and average rates mean, and how credits and deductions change your bill