Tax changes announced in the 2020-21 budget

On June 17, 2020, the Government of Prince Edward Island released the 2020-21 provincial budget. Within that, there are four tax changes announced that will come into effective January 1, 2021.

On the personal income tax side, the following items were announced:

· The base amount for the basic personal tax credit will be raised from $10,000 to $10,500

· The threshold where the reduction of the low-income tax credit starts will be raised from $18,000 to $19,000

· A new $500 base amount of non-refundable Children’s Wellness tax credit will be introduced.

As for corporate income tax measures, the small business tax rate is reduced from 3% to 2%.

Full details on the budget and more information is available on the Government of Prince Edward Island website here.