On March 12, 2021, Minister of Finance, Darlene Compton, presented Prince Edward Island’s 2021-22 budget. While noting the impact that the ongoing COVID-19 pandemic has had on the province, this year’s budget focuses primarily on broad improvements to healthcare and education, as well as several initiatives designed to build a more inclusive, sustainable, and robust provincial economy.
Forecasting a deficit of $112.1 million, the budget contains a few noteworthy income tax changes.
Corporate Income Tax
Effective January 1, 2022, the corporate income tax rate for eligible small businesses will be further reduced from 2% to 1%. (This follows a 1% decrease that took effect on January 1, 2021.) Note that the small business threshold remains unchanged at $500,000.
Personal Income Tax
For personal income tax purposes, the basic personal exemption amount will be increased by $750 to $11,250, and the low-income tax reduction threshold will be raised by $1,000 to $20,000, effective January 1, 2022.
Further information on Prince Edward Island’s 2021 budget may be found on the province’s website at:
If you have questions about any of the tax changes proposed in recent Canadian budgets, please do not hesitate to call the Ryan TaxDirect® line at 1.800.667.1600.