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PEI Personal Tax Credits & Tax Reduction
For information on the amounts of most non- refundable tax credits available to Prince Edward Island residents, see the non-refundable personal tax credits tables.
Dividend Tax Credits
PEI Young Child Tax Credit
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)
Income Tax Act s. 32
The PEI 2023 Budget increased the threshold to $20,750.
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
PEI Refundable Sales Tax Credit
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:
The total of the credit calculated above is reduced by 2% of adjusted family net income over $50,000. This is increased to 4% by Bill 64 for July 2022, and to 9% by Bill 85 for January 2023, with threshold increased from $50,000 to $100,000 for January 2023.
The refundable sales tax credit is administered by Canada Revenue Agency (CRA). See Prince Edward Island Sales Tax Credit on the CRA website.
PEI Refundable Volunteer Firefighter and Volunteer Search and Rescue Personnel Tax Credit
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.
For 2021 and earlier years, the refundable volunteer firefighter tax credit can be claimed if the taxpayer is eligible for the federal volunteer firefighter tax credit claimed on line 31220 of the federal tax return. If eligible, an amount of $500 is claimed on line 100 of form PE428, and on line 47900 of the federal tax return. See also the federal volunteer firefighter or search and rescue tax credit.
For 2022 and later years, as proposed by the PEI 2022 Budget, the refundable tax credit has been expanded to include volunteer search and rescue personnel, and the amount of the tax credit is increased to $1,000, if the individual is entitle to claim the tax credits on lines 31220 or 31240 of the federal tax return.
Revised: May 30, 2023
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