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!
- The Northwest Territories use a progressive tax structure with four tax brackets.
- Review the province’s credits to guarantee you don’t miss something you may be entitled to.
- Provincial credits may change in any given tax year, so be sure to check them to maximize your eligibility options.
Northwest Territories’ tax brackets for Tax Year 2023
Tax Rate | Tax Bracket | Taxable Annual Income |
5.9% | on the first $48,326 | $48,326 |
8.6% | on the next $48,329 | over $48,326 up to $96,655 |
12.2% | on the next $60,484 | over $96,655 up to $157,139 |
14.05% | on the portion over $157,139 | over $157,139 |
For 2022 tax rates, review this link from the Canadian government.
Northwest Territories’ progressive tax rate structure
As with most provinces, the 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 the most recent 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 amount” or “BPA” For the 2023 tax year, the federal basic personal amount (BPA) is $15,000, while the Northwest Territories’ amount is $16,593.
The Northwest Territories have a tax system similar to other Canadian provinces. Many of the provincial 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.
- Northwest Territories 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.