All the Numbers

Income tax in Prince Edward Island

From the All the Numbers wiki · Tax

A Prince Edward Island resident's provincial tax is worked out on the PE428, attached to the federal return.

The rules (2026)

Five brackets: 9.5% up to $33,928, 13.47% to $65,820, 16.6% to $106,890, 17.62% to $142,520 and 19% above.[1] The 2026 budget proposed a higher rate on the top incomes; the plan uses the law as CRA applies it. Credits are taken at 9.5%.

  • Basic personal amount: $15,000.[2]
  • Spouse or eligible dependant: $12,740 while the dependant's net income is $1,274 or less, then less each dollar above it, nil at $14,014.[3][4][5]
  • Age amount: $6,510 at 65 or over, less 15% of net income above $36,600.[6]
  • Pension amount: $1,000.[7] CPP and EI are credited as federally.[8]
  • Young children: $100 for each month a child under 6 lives with the parent; in a couple, the parent with the lower income claims it.[9]
  • Dividends: 10.5% (eligible) and 1.3043% (other) of the grossed-up dividend.[10][11]
  • Minimum tax: 57.5% of the federal additional tax.[12] Foreign tax is credited on the T2036.[13]

The surtax ended after 2023, and there is no health premium.

The low income tax reduction

$350 for the person, $350 for a spouse or eligible dependant, $300 for each other child at home, and $250 each for the person and the spouse at 65 or over, less 5% of family income over $22,650. It comes off after the foreign tax credit.[14] A couple claims it once; the plan gives it to the spouse with the higher income and does not pass on a part that spouse cannot use.[15]

After 2026

The statute indexes none of these amounts.[16] The plan treats them as it treats Manitoba's: they grow with the plan's rate by default, and stay at their 2026 dollars if the plan is set to the law as written. See tax brackets after 2026.

What it does not do

The children's wellness credit (it needs receipts) and the Sales Tax Credit are not modelled. See also Prince Edward Island benefits.

See also

  • Prince Edward Island benefits · Prince Edward Island pays a child benefit with the CCB for each child under 18, by family income.
  • 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, brackets updated May 2026), Table 8.1 Prince Edward Island: 9.5% to $33,928; 13.47% to $65,820; 16.6% to $106,890; 17.62% to $142,520; 19% above · Prince Edward Island personal income tax brackets and rates · See the source · effective 2026-01-01
  2. ↑CRA TD1PE 2026, line 1: "Basic personal amount – Every person employed in Prince Edward Island and every pensioner residing in Prince Edward Island can claim this amount" ($15,000); T4127 Table 8.1 · Prince Edward Island basic personal amount · $15,000 · effective 2026-01-01
  3. ↑CRA TD1PE 2026, line 6: "Enter $12,740 if you are supporting your spouse or common-law partner … net income for the year will be $1,274 or less … a partial amount if … between $1,274 and $14,014"; line 7 the same for an eligible dependant · Prince Edward Island spouse or eligible dependant amount, in full while the dependant's income is at or below the threshold · $12,740 · effective 2026-01-01
  4. ↑CRA TD1PE 2026, lines 6–7: "$1,274 or less"; ITA (PE) s.9(1)(a): "C is the greater of [the threshold] and the income of the individual's spouse" · Prince Edward Island spouse or eligible dependant amount: reduced dollar for dollar by the dependant's income above this · $1,274 · effective 2026-01-01
  5. ↑CRA TD1PE 2026, lines 6–7: "between $1,274 and $14,014" · Prince Edward Island spouse or eligible dependant amount: nil at this dependant income · $14,014 · effective 2026-01-01
  6. ↑CRA TD1PE 2026, line 2: "If you will be 65 or older on December 31, 2026, and your net income from all sources will be $36,600 or less, enter $6,510. You may enter a partial amount if your net income for the year will be between $36,600 and $80,000" · Prince Edward Island age amount (65 or older at year end), less 15% of net income over the threshold · See the source · effective 2026-01-01
  7. ↑Income Tax Act (PE) s.9(3): "B is the lesser of (a) $1,000; and (b) the amount determined under paragraph (b) of the description of B in subsection 118(3) of the federal Act"; TD1PE 2026 line 3 · Prince Edward Island pension income amount, fixed in the statute · $1,000 · effective 2000-01-01
  8. ↑Income Tax Act (PE) s.17: "Section 118.7 of the Federal Act applies for the purposes of this Act, except that any reference to “appropriate percentage” in that section is to be read as a reference to “appropriate percentage” (as that term is defined for the purposes of this Division)" · PE428 carries base CPP contributions and EI premiums as credits at the lowest Prince Edward Island rate · effective 2026-01-01
  9. ↑Income Tax Act (PE) s.9(5): "B is the product obtained when $100 is multiplied by the number of months in the taxation year … that the individual is the eligible individual in respect of the qualified dependant on the first day of the month"; a qualified dependant "has not attained the age of six years" and "resides with the eligible individual"; the eligible individual has no cohabiting spouse or one "whose income for the taxation year is greater" · Prince Edward Island young child amount: this much for each month a child under 6 lives with the parent; with a spouse, the lower-income parent claims it · $100 · effective 2006-07-01
  10. ↑Income Tax Act (PE) s.20: "38.13% of any amount required by subparagraph 82(1)(b)(ii) of the Federal Act to be included in computing the individual's income" — 38.13% of the 38% gross-up, 10.5% of the grossed-up dividend · Prince Edward Island dividend credit on eligible dividends, as a share of the grossed-up dividend · 10.5% · effective 2021-01-01
  11. ↑Income Tax Act (PE) s.20: "an amount equal to 10% of any amount required by subparagraph 82(1)(b)(i) of the Federal Act to be included in computing the individual's income for the year" — 10% of the 15% gross-up, 1.3043% of the grossed-up dividend · Prince Edward Island dividend credit on other than eligible dividends, as a share of the grossed-up dividend · 1.3% · effective 2021-01-01
  12. ↑Income Tax Act (PE) s.6(f): "“provincial percentage” for a taxation year means 57.5%"; s.30: "there shall be added … A × B where A is the provincial percentage; and B is the individual's additional tax for the taxation year determined pursuant to subsection 120.2(3) of the Federal Act" · Prince Edward Island minimum tax: this share of the federal additional tax · 57.5% · effective 2000-01-01
  13. ↑Income Tax Act (PE) s.34 (foreign tax deduction) · Prince Edward Island foreign tax credit (T2036): foreign non-business tax beyond the federal credit, up to the foreign share of Prince Edward Island tax · effective 2026-01-01
  14. ↑Income Tax Act (PE) s.32(2): "the amount, if any, by which the total of (a) $350; (b) $350 for a person who is the qualified relation of the individual for the year; (c) $350, where the individual has no qualified relation … [and claims an eligible dependant]; (d) the product obtained when $300 is multiplied by the number of the qualified dependants …; (e) $250, where the individual, before the end of the year, has attained the age of sixty-five years; and (f) $250, where the person who is the qualified relation … has attained the age of sixty-five years … exceeds (g) 5% of the amount, if any, by which the individual's adjusted income for the year exceeds $22,650, may be deducted from the eligible individual's tax otherwise payable under subdivisions a to f"; s.32(1)(c): a qualified dependant includes "a child of the individual residing with the individual at the end of the year" who is not 19 or older, married or a parent · Prince Edward Island low income tax reduction: amounts for the individual, a spouse or eligible dependant, each other dependant and each spouse 65 or older, less 5% of family income over a threshold; applied after the foreign tax credit; one claim a couple · See the source · effective 2018-01-01
  15. ↑Our convention under ITA (PE) s.32(3) ("only one of those individuals may apply"): the reduction is measured on family income either way, and the higher-income spouse is the likelier to have the tax to absorb it (ties: the earlier plan person); the unused part (s.32(4)) does not pass to the other · In a couple, the spouse with the higher net income claims the Prince Edward Island low income tax reduction · effective 2026-10-04
  16. ↑CRA T4127 (January 2026), Table 8.1 note: "No indexing applies to Prince Edward Island" · Prince Edward Island indexes none of its dollar amounts: each is set in the statute · effective 2026-01-01