December 19, 2001 Albertans to enjoy more money in their pockets as personal exemption amounts are set to increase Edmonton... On January 1, 2002, Albertans will be able to earn more money before they start paying any provincial personal income tax. One of the components of Alberta's 10 per cent single rate tax plan, implemented earlier this year, is the indexation of tax credits to Alberta's inflation rate. This means the amount of money an individual can earn without paying provincial personal income tax will increase from $12,900 to $13,339, the highest in Canada. Once the Alberta Family Employment tax credit is taken into account, a typical family in Alberta can earn $34,000 before paying any provincial income tax. Other credit amounts such as age, pension and education amounts will also increase. "Albertans already enjoy the lowest overall personal taxes in Canada and the increase in credit amounts means Alberta taxpayers will keep an additional $44 of their own money in their pockets - that's money they can save, spend or invest in their priorities," said Finance Minister Patricia Nelson. "Across the province this adds up to a total of $75 million that Albertans will not be paying in provincial tax because of indexation." Savings will affect Albertans at all income levels. For example, a typical:
Under Alberta's single rate tax plan, bracket creep is eliminated through the indexation of non-refundable tax credits. Bracket creep refers to the automatic tax increase that occurs when incomes rise with inflation. On January 1st of this year, Albertans saw savings of $1.1 billion as the province introduced its single rate tax plan, eliminated bracket creep and removed more than 200,000 lower income Albertans from the tax rolls altogether. There will be approximately 1.2 million taxpayers in Alberta in 2001. Updated forms for payroll deductions (TD 1) can be accessed through the Canada Customs and Revenue Agency website at: http://www.ccra-adrc.gc.ca/E/pbg/tf/td1abeq/README.html. For media inquiries, please contact: |