Northwest Territories – Income Tax Brackets, Rates, & Tax Credits

If seeing the northern lights is on your bucket list, then a trip to the Northwest Territories might be in your future. Residents of the Northwest Territories get to enjoy the aurora borealis up to 240 nights of the year!

If you live and work in the Northwest Territories—or plan to—here’s what you need to know about the tax rules, including income tax brackets, rates, and credits. Check out the following guide to learn more about your tax rate and stay on top of your finances.

Northwest Territories’ tax brackets for Tax Year 2024

Northwest Territories’ progressive tax rate structure

As with most of Canada, the Northwest Territories use a progressive tax structure with 4 tax brackets. The tax brackets increase each year, based on inflation. Visit the CRA’s Northwest Territories page for the most recent area tax updates.

There’s an allowable amount of income that you can earn before you must start paying taxes. This is called the “Basic Personal Amount” or “BPA” For the 2024 tax year, the federal Basic Personal Amount (BPA) is $15,705, while the Northwest Territories’ amount is $17,373.

The Northwest Territories has a tax system similar to other areas in Canada. Many of the territorial taxes and credits for residents of the Northwest Territories complement similar credits at the federal level, but there are unique credits for residents of the Northwest Territories.

Northwest Territories provincial tax credits

• Northwest Territories Cost of Living Tax Credit: This credit helps offset the high cost of living in the NWT. If the credit is more than you owe in taxes, you’ll get a refund for the difference. All residents receive the base amount, which in 2024 is $416 per adult and $480 per child, plus a regional heating amount. The total nontaxable amount can vary from $441–$470 per adult and $505-$534 per child depending on the region in which you reside.
• Northwest Territories Child Benefit: This credit is nontaxable and combined with the Canada Child Benefit into one payment. It is calculated based on your family income and the number of children, up to 17 years of age. To understand how this credit works, review this link from the NWT government.

A complete list of non-refundable tax credits and other credits or deductions for Northwest Territories residents can be found at this CRA link: Northwest Territories tax and credits.