The personal income tax is collected under the authority of Nova Scotia’s Income Tax Act (PDF).
The provincial personal income tax is calculated on individuals’ taxable income amount. The federal government defines the calculation of personal taxable income including: employment income, interest gains or losses, various tax deductions.
The Province sets the tax rates and income brackets for Nova Scotia. Both federal and provincial taxes are collected through the annual tax return to the Canada Revenue Agency (CRA).
|Nova Scotia's personal income tax rates vary by income brackets as follows:|
|Tax Rates||Taxable Income Bracket|
|8.79%||0 - $29,590|
|14.95%||$29,590 - $59,180|
|16.67%||$59,180 - $93,000|
|17.50%||$93,000 - $150,000|
|21%||$150,000 and above as of January 1, 2010|
|Prior to the 2010 tax year, a surtax of 10% is applied on Nova Scotia tax exceeding $10,000.|
Personal tax credits
Similar to federal deductions, gross provincial taxable income amount can be reduced by a number of non-refundable tax credits, if the individual qualifies.
In 2006, the Province announced a 4-year plan that provides tax relief for every taxpayer from 2007 to 2010. The plan raises the basic personal tax credit by $250 per year. The Province is also increasing the amount of non-refundable personal tax credits by a total of 13.8% over the four years.
Low Income Tax Reduction
The Nova Scotia personal income tax system provides an additional tax reduction for individuals and families with low incomes. Depending on adjusted family income, this reduction could decrease a family’s taxes by $300 for the taxfiler plus $300 for a spouse or eligible dependent plus $165 per dependent child.