The details of the new Prince Edward Island Sales Tax Credit were recently announced as the province prepares for the HST introduction in April 1, 2013. The sales tax credit will be paid quarterly as part of the GST/HST credit, beginning July 1, 2013. But you need to file your 2012 tax return in order to qualify, and the credit amount will depend on your marital status, income and if you have any eligible dependants. You also have to be a resident of PEI on the first day of the payment quarter.
For residents or families with a net income of $30,000 or less, the credit will be calculated for the year as:
- $100 for taxpayers who do not have a spouse or common-law partner or an eligible dependant
- $150 for taxpayers who have a spouse or common-law partner
- $150 for taxpayers who do not have a spouse or common-law partner but do have full custody of an eligible dependant
- $125 for taxpayers who do not have a spouse or common-law partner but share custody of an eligible dependant
So if you are single and have less than $30,000 in income, you can expect $25 to be added to your GST/HST payment every quarter.
For residents or families with a net income of more than $30,000, the annual credit will be calculated as:
- $100 plus whichever of the following are applicable:
- $50 for taxpayers who have a spouse or common-law partner
- $50 for taxpayers who do not have a spouse or common-law partner, but do have full custody of an eligible dependant
- $25 for taxpayers who do not have a spouse or common-law partner, but share custody of an eligible dependant
- A supplement of five per cent of adjusted family net income in excess of $30,000 to a maximum of $50
So a married couple with an income of $44,000 and an eligible dependant would receive an annual credit of $200, or an additional $50 per quarter.
The benefit will be reduced by two per cent once the family’s net income exceeds $50,000. For families or residents earning more than $60,000, the credit will be zero.
To apply for the new credit, make sure you answer “Yes” to the GST/HST credit section at the bottom of the first page of your T1 tax return. For spouses and common-law partners, the same person who applies for the GST/HST credit should also apply for the provincial credit.
The tax credit softens the landing of the HST at least a little, and should help PEI residents with the transition.