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PEI Personal Tax Credits & Tax Reduction

Non-Refundable Personal Tax Credits Tables - federal & all provinces and territories

Dividend Tax Credits

PEI Young Child Tax Credit

PE Income Tax Act s. 9(5)

PE has a tax credit for taxpayers having eligible children under the age of 6. The tax credit is based on $100 per month starting July 1, 2006. The lowest rate of tax is used to calculate the credit, which is claimed by the spouse with the lower taxable income.

PEI Low Income Tax Reduction (LITR)

PE Income Tax Act s. 32

available to low income individuals and families
amount received depends on family net income
cannot exceed PE tax payable (not refundable)

The PEI 2023 Budget increased the threshold to $20,750.

Low Income Tax Reduction	2023	2022	2021	2020	2016 - 2019	2015	2014 & earlier
Self	350	350	350	350	350	300	250
Spouse or equivalent	350	350	350	350	350	300	250
Child age 18 or less	300	300	300	300	300	250	200
Each spouse age 65+	250	250	250	250	250	250	0
Income threshold	20,750	20,000	19,000	18,000	17,000	17,000	15,000

The amount for each child age 18 or less is reduced by 1 child if equivalent to spouse is claimed.

The credit is reduced by 5% of family adjusted net income in excess of the income threshold. Adjusted net income is income from line 236 of the tax return, less Universal Child Care Benefits (UCCB).

See Canada Revenue Agency ( CRA) form PE428 from the Prince Edward Island General Income Tax and Benefit Package for detailed calculation.

PEI Children's Wellness Tax Credit - Non-Refundable

PE Income Tax Act s. 11.1

Effective starting January 1, 2021, amount of $500 per child.
Maximum amount increased to $1,000 for 2024 by 2023 Budget.
For children under the age of 18.
For eligible activities related to children's well-being, which could include sports, arts, cultural camps and activities for 8 weeks or 5 consecutive days of activity
Credit can be shared between parents.
Receipts must be kept to claim this credit.

See Children's Wellness Tax Credit on the PEI website.

PEI Refundable Island Essentials Benefit (formerly Sales Tax Credit)

PE Income Tax Act s. 36.3

The PEI 2026 Budget renames the Sales Tax Credit to Island Essentials Benefit, and increases the benefit amount effective July 1, 2026.

The PE non-taxable refundable sales tax credit is paid in conjunction with the federal GST/HST credit. Quarterly payments are made from July to June based on the prior year income tax return. An annual credit is provided in the following amounts, with new July 1, 2026 amounts preceding old amounts:

$130 ($110) for an individual
$55 for a spouse, common-law partner, or an eligible dependant
supplement of 0.5% of adjusted family net income over $30,000, to a maximum of $0 ($55).
The minimum monthly payment will be $43.75.

The total of the credit calculated above is reduced by 1% (2%) of adjusted family net income over $95,000 ($50,000).

This tax credit was temporarily increased for 2022 and 2023.

The refundable Island Essentials Benefit (sales tax credit) is administered by Canada Revenue Agency (CRA), and is combined with the quarterly payments of the GST/HST credits.

See Prince Edward Island Sales Tax Credit on the CRA website.

PEI Refundable Volunteer Firefighter and Volunteer Search and Rescue Personnel Tax Credit

PE Income Tax Act s. 36.2

Only residents of Prince Edward Island on December 31st of the taxation year can claim this credit. If the taxpayer has died in the year, they must have been a resident of PEI on the date of death.

This refundable tax credit can be claimed if the taxpayer is eligible for the federal volunteer firefighter or search and rescue tax credit claimed on line 31220 of the federal tax return.

If eligible, an amount of $1,000 is claimed on line 98 of form PE428, and on line 47900 of the federal tax return. The amount was increased from $500 to $1,000 for 2022 and later years.