1 Following proposed changes in the budget to the low-income tax reduction and the basic personal amount (see below), individuals resident in Prince Edward Island on 31 December 2023 with taxable income up to $16,321 will pay no provincial income tax as a result of a low-income tax reduction. The low-income tax reduction will be clawed back for income in excess of $20,750 until the reduction is eliminated, resulting in an additional 5% of provincial tax on income between $20,751 and $27,750. Similarly, individuals resident in Prince Edward Island on 31 December 2024 with taxable income up to $17,127 will pay no provincial income tax as a result of a low-income tax reduction. The low-income tax reduction will be clawed back for income in excess of $21,500 until the reduction is eliminated, resulting in an additional 5% of provincial tax on income between $21,501 and $28,500.
As mentioned above, the current additional 10% surtax on provincial income tax in excess of $12,500, which in effect is the equivalent of a fourth bracket rate of 18.37% on taxable income above $100,661 (or $101,101 if the proposed increase in the basic personal amount for 2023 is taken into account – see below), will be eliminated for 2024.
For taxable income in excess of $106,717, the 2023 combined federal–Prince Edward Island personal income tax rates are outlined in Table C.
Table C – Combined 2023 federal and Prince Edward Island personal income tax rates