All the Numbers

Income tax in the Northwest Territories

From the All the Numbers wiki · Tax

A resident's territorial tax is worked out on the NT428 and the NT479, attached to the federal return. Residents also get the federal northern residents deduction.

The rules (2026)

Four brackets: 5.9% up to $53,003, 8.6% to $106,009, 12.2% to $172,346 and 14.05% above.[1] Credits are taken at 5.9%.

  • Basic personal amount: $18,198.[2]
  • Spouse or eligible dependant: $18,198 less the dependant's net income.[3]
  • Age amount: $8,902 at 65 or over, less 15% of net income above $46,432.[4]
  • Pension amount: $1,000.[5] CPP and EI are credited as federally.[6]
  • Dividends: 11.5% (eligible) and 6% (other) of the grossed-up dividend.[7][8]
  • Minimum tax: 45% of the federal additional tax.[9] Foreign tax is credited on the T2036.[10]

There is no surtax, health premium or low-income reduction.

The cost of living tax credit

2.6% of net income up to $12,000, then $312 plus 1.25% of income above that up to $48,000, then $762 plus 1% up to $66,000, and $942 above. An adult's credit is topped up to $350, or a couple's to $700 between them. Whatever is more than the tax is paid out.[11] A couple claims the top-up once; the plan gives it to the spouse with the higher income.[12]

The payroll tax

Every employee pays 2% of their pay to the territory, withheld by the employer. It is not an income tax and nothing credits it.[13] The plan counts it with the territorial tax.

After 2026

The brackets and most credit amounts are indexed like the federal ones. The pension amount and the cost of living credit are fixed in dollars:[14] they grow with the plan's rate by default and stay put under the law as written. See tax brackets after 2026.

What it does not do

The political contribution credit and the payroll tax rules for someone who normally works outside the territory are not modelled. See also Northwest Territories benefits.

See also

  • Northern residents deduction · Living in the territories all year takes $11 a day, and as much again for the home, off taxable income.
  • Northwest Territories benefits · The Northwest Territories pay a child benefit with the CCB, by the number of children under 6 and 6 to 17, reduced as family income rises.
  • Tax brackets after 2026 are projected, not published · Every year after 2026 is taxed with the 2026 brackets, personal amounts, credits and CPP/EI ceilings grown at the plan's inflation rate. That is how CRA indexes them, but the real figures are announced each fall and will differ.

References

  1. ↑CRA T4127 (January 2026), Table 8.1 Northwest Territories: 5.9% to $53,003; 8.6% to $106,009; 12.2% to $172,346; 14.05% above; Income Tax Act (NT) s.2.11(2): "(a) tier one rate for the 2005 and subsequent taxation years is 5.9%; (b) tier two rate … is 8.6%; (c) tier three rate … is 12.2%; and (d) tier four rate … is 14.05%" · Northwest Territories personal income tax brackets and rates · See the source · effective 2026-01-01
  2. ↑CRA TD1NT 2026, line 1: "Basic personal amount – Every person employed in the Northwest Territories and every pensioner residing in the Northwest Territories can claim this amount" ($18,198) · Northwest Territories basic personal amount · $18,198 · effective 2026-01-01
  3. ↑CRA TD1NT 2026, line 6: "Enter the difference between the amount at line 1 and the estimated net income of your spouse or common-law partner"; line 7 the same for an eligible dependant · Northwest Territories spouse or eligible dependant amount: the basic personal amount less the dependant's net income · $18,198 · effective 2026-01-01
  4. ↑CRA TD1NT 2026, line 2: "If you will be 65 or older on December 31, 2026, and your net income from all sources will be $46,432 or less, enter $8,902. You may enter a partial amount if your net income for the year will be between $46,432 and $105,779" · Northwest Territories age amount (65 or older at year end), less 15% of net income over the threshold · See the source · effective 2026-01-01
  5. ↑Income Tax Act (NT) s.2.21(1): "B is the lesser of (i) $1,000, and (ii) the amount that is determined under paragraph (b) of the description of B in subsection 118(3) of the federal Act"; s.2.13(1): the annual adjustment "applies to sections 2.17 and 2.18, paragraph 2.2(c), section 2.23 and paragraph 2.24(1)(c)", not to s.2.21 · Northwest Territories pension income amount, fixed in the statute · $1,000 · effective 2001-01-01
  6. ↑Income Tax Act (NT) s.2.29 (credit for EI premium and CPP contribution) · NT428 carries base CPP contributions and EI premiums as credits at the lowest Northwest Territories rate · effective 2026-01-01
  7. ↑Income Tax Act (NT) s.2.32(b): "11.5% of the total amount required under paragraph 82(1)(a.1) and subparagraph 82(1)(b)(ii) of the federal Act to be included in computing the individual's income for the year" · Northwest Territories dividend credit on eligible dividends, as a share of the grossed-up dividend · 11.5% · effective 2011-01-01
  8. ↑Income Tax Act (NT) s.2.32(a): "6% of the total amount required under paragraph 82(1)(a) and subparagraph 82(1)(b)(i) of the federal Act to be included in computing the individual's income for the year" · Northwest Territories dividend credit on other than eligible dividends, as a share of the grossed-up dividend · 6% · effective 2011-01-01
  9. ↑Income Tax Act (NT) s.2.1: "“specific percentage”, for a taxation year, means 45%"; ss.2.31 (carryover) and 2.43 (minimum tax) · Northwest Territories minimum tax: this share of the federal additional tax, and of the federal carryover · 45% · effective 2004-01-01
  10. ↑Income Tax Act (NT) s.3(1) (deduction on account of foreign tax paid) · Northwest Territories foreign tax credit (T2036): foreign non-business tax beyond the federal credit, up to the foreign share of territorial tax · effective 2026-01-01
  11. ↑Income Tax Act (NT) s.4.1(2): "(a) 2.60% of the individual's net income, if the individual's net income does not exceed $12,000; (b) $312 plus 1.25% of the amount by which the individual's net income exceeds $12,000 … but does not exceed $48,000; (c) $762 plus 1% of the amount by which the individual's net income exceeds $48,000 … but does not exceed $66,000; or (d) $942, where the individual's net income exceeds $66,000"; s.4.1(2.1): "(a) $350 minus the amount calculated under subsection (2), if … the individual is not married or in a common-law partnership …; or (b) $700 minus the sum of the amounts calculated under subsection (2) for the individual and the individual's spouse"; s.4.1(2.2): "An individual whose spouse or common-law partner claims a deduction under subsection (2.1) is not entitled to claim"; s.4.1(4): the excess over tax payable is refunded · Northwest Territories cost of living tax credit (NT479): a rising share of net income up to a cap, plus a supplement at 18 or older for a low-income household; refundable · See the source · effective 2005-01-01
  12. ↑Our convention under ITA (NT) s.4.1(2.2) ("An individual whose spouse or common-law partner claims a deduction under subsection (2.1) is not entitled to claim"): the supplement is the same whichever spouse claims; the higher-income spouse claims it, the same side as the spouse amount (ties: the earlier plan person) · In a couple, the spouse with the higher net income claims the Northwest Territories cost of living supplement · effective 2026-10-04
  13. ↑Payroll Tax Act (NT) s.3(1): "Every employee is liable to pay to the Government a tax in the amount equal to 2% of the remuneration paid to the employee in the year" · Northwest Territories payroll tax: a share of an employee's pay, withheld by the employer; not an income tax and not credited against one · 2% · effective 1993-07-01
  14. ↑Income Tax Act (NT) s.2.13(1) lists the provisions whose dollar amounts are adjusted each year; ss.2.21 and 4.1 are not among them · Northwest Territories amounts fixed in dollars: the pension amount and the cost of living tax credit · effective 2001-01-01