Did you know that British Columbia is one of the top 3 producing regions of cranberries and blueberries in the world? Snack on some berries while you learn more about the personal income tax rates in beautiful BC!
British Columbia has a tax system similar to other Canadian provinces. Many of the British Columbia provincial taxes and credits compliment similar credits at the federal level, but there are some unique credits for residents of British Columbia.
Progressive Tax Rate Structure
British Columbia uses a progressive tax structure, with five tax rates.
The tax brackets increase each year, based on inflation. Visit the government of British Columbia’s Personal Income Taxes page for this year’s tax bracket rates.
What Are Tax Rates in BC?
Once your taxable income is determined, which equals all sources of income minus applicable deductions, reductions, and credits, you can find where you are in the tax brackets of British Columbia.
British Columbia’s Tax Brackets for Tax Year 2018
- 5.06%: $0 to $38,898
- 7.70%: $38,898.01 to $77,797
- 10.50%: $77,797.01 to $89,320
- 12.29%: $89,320.01 to $108,460
- 14.70%: Over $108,460
British Columbia Tax Credits
- C. Education Coaching Income Tax Credit: This credit is for teachers and teaching assistants who carry out at least 10 unpaid hours of extra-curricular coaching activity. Learn more.
- Low Income Climate Action Tax Credit: This credit helps offset the impact of carbon taxes for low income individuals and families. Learn more.
What is a Tax Bracket?
Tax brackets in British Columbia are determined by income. Income is found by adding up all your applicable sources of income and then subtracting your credits and deductions. Let’s take a closer look at how income tax works in British Columbia and how to determine your tax rates in BC.
The Structure of Tax Brackets British Columbia – How It Works
The tax brackets structure in British Columbia is progressive. That means, the higher your income, the higher your tax rate. However, there is a cap. In 2019, for example, those in a taxable income bracket of $150,000+ have tax rates in BC of 16.80 percent. Progressive structures are also known as marginal tax rates.
Residents of British Columbia can claim the basic personal amount on their tax return. The personal amount is how much income you can earn before you must pay taxes on it. While Alberta enjoys the highest basic personal amount in Canada, British Columbia taxpayers were happy to see an increased personal amount of 1.022/index factor at the federal tax level, and an increase of 1.026/index factor at the provincial level.
The government also offers several other refundable tax credits, non-refundable tax credits, reductions, and deductions. Claiming the credits applicable to your tax rates in BC reduces your overall tax burden.
Some of the credits and deductions are unique to British Columbia, including the Climate Action Tax Credit, which helps offset the impact of carbon taxes for individuals and families.
Do You Have to File Income Tax?
Every resident of British Columbia and every person that earned income in the province during the year must file an income tax return. Has somebody said you were exempt from filing a return? Check out these popular myths that the Canada Revenue Agency (CRA) has debunked.
Avoiding Interest and Penalties
To avoid interest, fees, penalties, and calls from CRA’s collections department, file and pay your taxes on time. It can be hard to pay off a big tax bill, and if you can’t pay on time, you can make payment arrangements with CRA.
What Does the Government Do with Income Taxes?
Wondering where those taxes you pay go? Taxes are part of a large system that supports all citizens at the provincial and national level. Universal health care is one of the ways your tax dollars work, but they also pay for beneficial things like national defence, infrastructure projects, education, and employment insurance.
Affordable, Professional Tax Help
Intuit TurboTax® is the software chosen by individuals filing personal and small business taxes. It’s an efficient and affordable way to do your taxes. Get TurboTax, and you will file and pay your taxes with confidence.
References & Resources:
- British Columbia: Tax Rates
- British Columbia: Personal Tax Credits
- Canada Revenue Agency: British Columbia
Provincial tax brackets
- Alberta Tax Brackets
- British Columbia Tax Brackets
- Manitoba Tax Brackets
- Newfoundland and Labrador Tax Brackets
- New Brunswick Tax Brackets
- Northwest Territories Tax Brackets
- Nova Scotia Tax Brackets
- Nunavut Tax Brackets
- Ontario Tax Brackets
- Prince Edward Island Tax Brackets
- Québec Tax Brackets
- Saskatchewan Tax Brackets
- Yukon Tax Brackets
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