It’s Tax Season — Numbers You Need to Know

Increases in income tax rates brought in by the new provincial government have come fully into effect in after being partially implemented in October of 2015.

Under the new brackets, the first $125,000 of an individual’s income will remain taxed at an unchanged rate of 10% — meaning about 93% of Alberta residents will be unaffected, according to the government. That being said, there will be increased marginal tax rates on dollars earned above that amount, with income between $125,000 and $150,000 taxed at a 12% rate, $150,000 to $200,000 at 13%, $200,000 to $300,000 at 14%, and income over $300,000 at 15%.

The “tax on split income” now limits income-splitting techniques that seek to shift certain types of income from a higher-income individual to a lower- income minor.  The tax on split income is now calculated using the highest tax rate (i.e. 11.25% for 2015 and 15% after 2015), instead of at a rate of 10%.

Alberta’s general or manufacturing and processing (M&P) corporate tax rate has increased from 10% to 12%.