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 Northwest Territories get to enjoy northern lights 240 nights of the year!

Northwest Territories’ Tax Brackets for 2021

For 2020 tax rates, review this link from the Canadian Government.

Northwest Territories Progressive Tax Rate Structure

As with most provinces, Northwest Territories use 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.

There’s 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 2021 tax year, the Federal Basic Personal Amount (BPA) is $13,808, while the Northwest Territories amount is $15,243. 

Northwest Territories have a tax system similar to other Canadian provinces. Many of the provincial taxes and credits for residents of Northwest Territories complement similar credits at the federal level, but there are unique credits for residents of Northwest Territories.

Northwest Territories 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. More information on applying for and receiving this credit can be found at this CRA link.
• NWT Child Benefit: This credit 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.