If seeing the northern lights is on your bucket list, then a trip to the Northwest Territories might be in your future. Residents of Northwest Territories get to enjoy northern lights nearly 250 days of the year!
Northwest Territories has a tax system similar to other Canadian provinces. Many of the provincial taxes and credits for residents of Northwest Territories compliment similar credits at the federal level, but there are some unique credits for residents of Northwest Territories.
Northwest Territories Progressive Tax Rate Structure
As with most provinces, Northwest Territories uses a progressive tax structure with four tax brackets. The tax brackets increase each year, based on inflation. Visit the CRA’s Northwest Territories page for this year’s tax bracket rates.
Northwest Territories’ Tax Brackets for 2020 Tax Year
Taxable Annual Income
|5.9%||on the first $43,957||$43,957|
|8.6%||on the next $43,959||over $43,957 up to $87,916|
|12.2%||on the next $55,016||over $87,916 up to $142,932|
|14.05%||on the portion over $142,932||over $142,932|
Northwest Territories Credits
- A complete list of Non-Refundable Tax Credits and other credits or deductions for Northwest Territories residents can be found in this CRA link: Northwest Territories Tax and Credits.
- Northwest Territories Cost of Living Tax Credit: This credit helps offset the high cost of living in NWT. If the credit is more than you owe in taxes, you will get a refund for the difference. More information on applying for and receiving this credit be found in this CRA link.
There is an allowable amount of income that you can earn before you must start paying taxes. That is called the “basic personal” or “personal amount.” For the 2020 tax year, the Federal Basic Personal Amount (BPA) is $13,229, while the Northwest Territories amount is $15,093.
This TurboTax article provides more information on the federal tax rates, as well as links to other provinces and tax calculators: An Overview of Canada’s Tax Brackets.
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