2024 Prince Edward Island provincial budget tax highlights
On Feb. 29, the Prince Edward Island government released its 2024 budget. The following are highlights of the key tax measures.
Personal tax measures
Beginning in 2025, the four lowest brackets will see their tax rate drop, while the highest income tax bracket will see a rate increase.
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2024 PEI personal tax brackets |
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Proposed 2025 PEI personal tax brackets |
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Income |
Tax rate |
|
Income |
Tax rate |
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$0 to $32,656 |
9.65% |
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$0 to $33,328 |
9.50% |
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$32,657 to $64,313 |
13.63% |
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$33,329 to $64,656 |
13.47% |
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$64,314 to $105,000 |
16.65% |
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$64,657 to $105,000 |
16.60% |
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$105,001 to $140,000 |
18.00% |
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$105,001 to $140,000 |
17.62% |
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$140,001 and above |
18.75% |
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$140,001 and above |
19.00% |
The personal combined income tax rates for 2024 are outlined below:
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Personal (combined) federal and PEI top marginal tax rates |
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|
Rate |
|
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Interest/regular income |
51.75% |
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Capital gains |
25.88% |
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Eligible dividends |
36.20% |
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Non-eligible dividends |
47.63% |
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Personal tax credits
The budget proposes the following changes to personal tax credits, as well as other amounts:
- Basic personal amount – The basic personal amount for 2024 will increase to $13,500. The basic personal amount for 2025 will be $14,250.
- Spouse or common‑law partner amount and the amount for an eligible dependent – For 2024, these credits will increase from the currently enacted $10,829 to $11,466, and the amount for 2025 will be $12,103.
- Age amount – The budget increases the amount of this credit available to persons aged 65 and older, from $4,679 to $5,595 for 2024 and $6,540 for 2025. The budget also increases the income threshold from $30,879 to $33,740 for 2024 and to $36,600 for 2025.
- Low Income Tax Reduction – The budget proposes to increase the income threshold for the PEI Low Income Tax Reduction from $20,750 to $21,500 for 2024, and again to $22,250 for 2025.
- PEI Children’s Benefit – This is an additional monthly benefit for family with children starting in 2025. While no specifics were provided on how the benefit will be calculated, the budget address provides the following example and details: a family with two children and a net household income of up to $45,000 will receive $720 per year. Families with income between $45,000 and $80,000 will also receive a prorated benefit. The PEI Children’s Benefit will be administered through the Canada Revenue Agency (CRA) and will be reviewed annually.
Corporate tax measures
No corporate income tax rate changes were announced in this year’s budget. The current corporate income tax rates for 2024 are outlined below:
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Small business corporations |
General corporations |
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Rate |
Threshold |
Non-M&P |
M&P |
|
PEI |
1.0% |
$500,000 |
16.0% |
16.0% |
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Combined federal and PEI |
10.0% |
$500,000 |
31.0% |
31.0% |
Next steps
Contact your Baker Tilly advisor to learn more about how we can help you navigate the complexities of the Canadian tax system.
Meet the Author
Sean Grant-Young
Information is current to March 5, 2024. The information contained in this release is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.