On April 14th, 2016, Alberta Finance Minister Joe Ceci announced
the 2016 Alberta Budget. Below is a summary of some of the tax
measures that were included in the Budget.
Corporate Small Business Tax Rate
The corporate small business income tax rate will decrease from
3% to 2% effective January 1, 2017. The general corporate tax rate
remains at 12%. The combined federal and Alberta small business and
general corporate tax rates for 2017 will be 12.5% and 27%
Investment Tax Credits
As part of the initiative to promote job creation and
diversification in the province, the Budget announced two new tax
credits for those who invest in Alberta. The Alberta Investor Tax
Credit will benefit investors in eligible small and medium-sized
enterprises in Alberta, and the Capital Investment Tax Credit will
benefit corporations that make investments in eligible capital
assets that are used in certain industries such as the value-added
agriculture, tourism infrastructure, culture and manufacturing and
processing industries. The Alberta Government will provide further
details on these credits later in 2016.
Climate Leadership Adjustment Rebate
The Climate Leadership Adjustment Rebate will be introduced and
is intended to protect lower and middle income Albertans from the
higher costs resulting from the carbon levy. Effective January
2017, the rebate will be up to $200 for an adult, $100 for a spouse
and $30 for each child under the age of 18 in a household (to a
maximum of four). The rebate will be adjusted in accordance with
increases in carbon prices, and will begin to phase out at $47,500
in family net income for single individuals and $95,000 for couples
Personal Tax Rates
There are no changes in personal tax rates for 2016, which is
the first full year of graduated tax rates. The personal tax rates
are summarized below:
In 2017, the dividend tax credit rate for ineligible dividends
will be adjusted downwards to correspond with the lowering of the
corporate small business tax rate to 2%. There will be no changes
to the dividend tax credit for eligible dividends.
Measures Previously Announced
As part of the highlights on benefits for families, the Budget
referred to two items that will come into effect in July of 2016.
These items were announced in the 2015 Alberta Budget.
Benefit. Families may receive this benefit of up to $1,100
for one child and then up to $550 for each of the next three
children. This benefit is reduced as family net income exceeds
$25,500 and is fully phased out once family net income reaches
Alberta Family Employment Tax
Credit. This benefit is aimed at supporting working
families with children. The rate at which benefits are phased in on
family working income will be increased from 8% to 11% and the
phase-out threshold on family net income will also be increased
from $36,778 to $41,250.
For more information on the 2016 Alberta Budget, please visit
the Alberta Government website here.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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