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December 30, 2003 Increased personal exemption amounts keep more money in Albertans' pockets Edmonton… Albertans will save about $150 million in 2004 as the government increases personal tax credits. Alberta’s basic personal amount, spousal amount, and eligible dependent amount will all rise to $14,337 for 2004, up from $13,525 in 2003. The six per cent increase in the basic amounts reflects Alberta’s move to index personal tax credits for inflation. “The average Alberta family will save $162 in 2004,” said Finance Minister Patricia Nelson. “A typical single taxpayer can make $15,200 before paying any provincial tax.” The increased exemption amounts protect low-income Albertans from being pushed onto the tax rolls by inflation. A typical Alberta family of four can earn up to $35,700 in 2004, up from $34,500 in 2003, before paying provincial income tax once the Alberta Family Employment Tax Credit is taken into account. “About 75,000 low-income Albertans would have to pay tax in 2004 if we hadn’t introduced inflation-indexing,” said Nelson. Most of Alberta’s other credit amounts—such as the education, age, and disability amounts—will also increase by six per cent. Alberta provides the highest basic and spousal amounts in Canada, more than double those offered by some other provinces. “We are determined to keep Alberta’s tax advantage strong and broad. It’s an advantage that contributes to our growing, vibrant economy without impairing our ability to fund core programs and priorities,” said Nelson. Indexing tax credit amounts to Alberta’s inflation rate was a component of the 10 per cent single rate tax plan, introduced in 2001. The government phased in more than $1.5 billion in personal income tax savings from 1999 to 2001, culminating in the introduction of the single-rate tax system. Indexing credits to inflation ensures those savings are not eroded over time.
Backgrounder Alberta's personal income tax advantage
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