5002-PC PAGE 1 Prince Edward Island Tax Information Table of contents Prince Edward Island benefits for individuals and families, page 2 Prince Edward Island sales tax credit, page 2 - File your return, page 2 Completing your Prince Edward Island form, page 2 Definitions, page 2 Form PE428, Prince Edward Island Tax and Credits, page 2 When to complete Form T2203, Provincial and Territorial Taxes for Multiple Jurisdictions, page 2 Part A - Prince Edward Island tax on taxable income, page 2 - Prince Edward Island tax rates for 2023, page 2 Part B - Prince Edward Island non-refundable tax credits, page 3 - Newcomers to Canada and emigrants, page 3 - Line 58120 - Spouse or common-law partner amount, page 3 - Line 58160 - Amount for an eligible dependant, page 3 - Line 58200 - Amount for infirm dependants age 18 or older, page 3 - Line 58230 - Amount for young children, page 4 - Line 58360 - Pension income amount, page 4 - Line 58365 - Children's wellness tax credit, page 4 - Line 58400 - Caregiver amount, page 4 - Line 58440 - Disability amount for self, page 5 - Line 58480 - Disability amount transferred from a dependant, page 5 - Line 58500 - Teacher school supply amount, page 5 - Line 58560 - Your tuition and education amounts, page 5 - Line 58600 - Tuition and education amounts transferred from a child or grandchild, page 6 - Line 58689 - Medical expenses for self, spouse or common-law partner, and your dependent children born in 2006 or later, page 6 - Line 58729 - Allowable amount of medical expenses for other dependants, page 6 Part C - Prince Edward Island tax, page 6 - Line 56 - Prince Edward Island tax on split income, page 6 - Line 64 - Prince Edward Island additional tax for minimum tax purposes, page 6 - Prince Edward Island low-income tax reduction, page 6 - Line 68 - Unused low-income tax reduction from your spouse or common-law partner, page 6 - Adjusted family income calculation for the Prince Edward Island low-income tax reduction, page 7 - Line 81 - Reduction for an eligible dependant, page 7 - Line 82 - Reduction for dependent children born in 2005 or later, page 7 - Unused low-income tax reduction that your spouse or common-law partner can claim, page 7 - Line 91 - Provincial foreign tax credit, page 7 - Line 94 - Prince Edward Island political contribution tax credit, page 7 - Line 96 - Equity tax credit, page 7 Part D - Prince Edward Island tax credits, page 7 - Line 100 - Prince Edward Island volunteer firefighter and volunteer search and rescue personnel tax credit, page 7 PAGE 2 Prince Edward Island benefits for individuals and families Prince Edward Island sales tax credit The Prince Edward Island sales tax credit (PEISTC) is a non-taxable amount paid to help offset the increase in sales tax for households with low and modest incomes. This amount is combined with the quarterly federal goods and services tax/harmonized sales tax (GST/HST) credit payment. You do not need to apply for the GST/HST credit or the PEISTC. The Canada Revenue Agency (CRA) will use the information from your return to determine if you are entitled to receive these credits. File your return To make sure you get your payments on time, you and your spouse or common-law partner need to file your 2023 Income Tax and Benefit Return(s) by April 30, 2024. The CRA will use the information from your return(s) to calculate the payments you are entitled to get from these programs. The PEISTC is fully funded by the Province of Prince Edward Island. For more information about this program, go to canada.ca/cra-benefits-prov-terr or call the CRA at 1-800-387-1193. Completing your Prince Edward Island form All the information you need to complete Form PE428, Prince Edward Island Tax and Credits, is included in this package. Complete one copy of Form PE428 and attach it to your return. Form PE428 and other forms mentioned are available at canada.ca/cra-forms. Definitions Spouse refers to a person you are legally married to. Common-law partner refers to a person who is not your spouse, but with whom you are in a conjugal relationship and at least one of the following conditions applies: - This person has been living with you in a conjugal relationship for at least 12 continuous months (including any period of time where you were separated for less than 90 days because of a breakdown in the relationship) - This person is the parent of your child by birth or adoption - This person has custody and control of your child (or had custody and control immediately before the child turned 19 years of age) and your child is wholly dependent on them for support End of the year means any of the following dates: - December 31, 2023 - the date you left Canada if you emigrated in 2023 - the date of death for a person who died in 2023 Form PE428, Prince Edward Island Tax and Credits Complete Form PE428 if one of the following applies: - You were a resident of Prince Edward Island at the end of the year - You were a non-resident of Canada in 2023 and any of the following applies: -- You earned income from employment only in Prince Edward Island -- You received income from a business with a permanent establishment only in Prince Edward Island When to complete Form T2203, Provincial and Territorial Taxes for Multiple Jurisdictions Complete Form T2203 instead of Form PE428, if both of the following apply: - You resided in Prince Edward Island on December 31, 2023 (or the date you left Canada if you emigrated in 2023) - All or part of your 2023 business income (including income received as a retired, inactive, or limited partner) was earned and can be allocated to a permanent establishment outside Prince Edward Island You also must complete Form T2203 if both of the following apply: - You were a non-resident of Canada throughout 2023 - You were carrying on business in more than one province or territory in Canada, or you were receiving income from an office or employment that can reasonably be attributed to duties performed in more than one province or territory in Canada Part A - Prince Edward Island tax on taxable income Prince Edward Island tax rates for 2023 The following tax rates are used in the calculation of your Prince Edward Island tax on taxable income: - 9.8% on the portion of your taxable income that is $31,984 or less, plus - 13.8% on the portion of your taxable income that is more than $31,984 but not more than $63,969, plus PAGE 3 - 16.7% on the portion of your taxable income that is more than $63,969 Part B - Prince Edward Island non-refundable tax credits The eligibility conditions and rules for claiming most Prince Edward Island non-refundable tax credits are the same as those for the federal non- refundable tax credits. However, the amount and calculation of most Prince Edward Island non-refundable tax credits are different from the corresponding federal credits. Newcomers to Canada and emigrants As a newcomer or an emigrant, you may be limited in the amount you can claim for certain provincial non-refundable tax credits. If you reduced your claim for any of the following federal amounts, you also need to reduce your claim for the corresponding provincial amount in the same way: \\\ Federal amount on your return: line 30000 Corresponding provincial amount on Form PE428: line 58040 Federal amount on your return: line 30100 Corresponding provincial amount on Form PE428: line 58080 Federal amount on your return: line 30300 Corresponding provincial amount on Form PE428: line 58120 Federal amount on your return: line 30400 Corresponding provincial amount on Form PE428: line 58160 Federal amount on your return: line 30425 Corresponding provincial amount on Form PE428: line 58200 Federal amount on your return: line 30450 Corresponding provincial amount on Form PE428: line 58400 Federal amount on your return: line 31600 Corresponding provincial amount on Form PE428: line 58440 Federal amount on your return: line 31800 Corresponding provincial amount on Form PE428: line 58480 Federal amount on your return: line 32400 Corresponding provincial amount on Form PE428: line 58600 Federal amount on your return: line 32600 Corresponding provincial amount on Form PE428: line 58640 \\\ For examples on how to calculate these amounts, see Guide T4055, Newcomers to Canada. Line 58120 - Spouse or common-law partner amount You can claim this amount if the rules are met for claiming the amount on line 30300 of your return and your spouse's or common-law partner's net income from line 23600 of their return (or the amount that it would be if they filed a return) is less than $11,912 Line 58160 - Amount for an eligible dependant You can claim this amount if the rules are met for claiming the amount on line 30400 of your return and your dependant's net income from line 23600 of their return (or the amount that it would be if they filed a return) is less than $11,912. Line 58200 - Amount for infirm dependants age 18 or older You can claim up to $2,446 for each of your (or your spouse's or common-law partner's) dependent children or grandchildren born in 2005 or earlier who has an impairment in physical or mental functions. You can also claim this amount for more than one person if each one meets all of the following conditions: - They are your (or your spouse's or common-law partner's) parent, grandparent, brother, sister, aunt, uncle, niece or nephew - They were 18 years of age or older - They were dependent on you (or on you and others) because of an impairment in physical or mental functions - They were a resident of Canada at any time in the year Notes You cannot claim this amount for a person who was only visiting you. A parent includes someone you were completely dependent upon and who had custody and control of you when you were under 19 years of age. A child includes someone who is completely dependent upon you for support and whom you have custody and control of, even if they are older than you. You can claim this amount only if the dependant's net income from line 23600 of their return (or the amount that it would be if they filed a return) is less than $7,412. If you had to make support payments for a child, you cannot claim an amount on line 58200 for that child unless both of the following conditions apply: - You were separated from your spouse or common-law partner for only part of 2023 because of a breakdown in your relationship - You did not claim any support amounts paid to your spouse or common-law partner on line 22000 of your return If both of these conditions are met, you can claim whichever of the following amounts is better for you: - line 58200 of your Form PE428 - line 22000 of your return How to claim this amount Complete the calculation for line 58200 using Worksheet PE428. If you are claiming this amount for more than one dependant, enter the total amount on line 58200 of your Form PE428. Note The CRA may ask for a signed statement from a medical practitioner showing when the impairment began and how long it is expected to last. You do not need a signed statement from a medical practitioner if the CRA already has an approved Form T2201, Disability Tax Credit Certificate, for a specified period. The notice of determination will show which years you are eligible for. Claim made by more than one person If you and another person support the same dependant, you can split the claim for that dependant. However, the total amount of your claim and the other person's claim cannot be more than the maximum amount allowed for that dependant. PAGE 4 Line 58230 - Amount for young children You can claim this amount if you were a resident of Prince Edward Island at the end of the year and you had a dependent child who was less than six years of age. You can claim $100 per month for each child if all of the following conditions are met for each month you are claiming: - The child was living with you on the first day of the month - The child was less than six years of age on the first day of the month - No one else claimed this amount for the child for the month - No one has received a special allowance under the Children's Special Allowances Act for the child for any of the months If you had a spouse or common-law partner at the end of the year, only the person with the lower net income (including zero income) can claim this amount. If you and your spouse or common-law partner have equal net incomes, you have to decide who will claim this amount How to claim this amount Complete the chart "Details of amount for young children" on your Form PE428. Enter the details for each child you are claiming including the number of eligible months you are claiming for that child. Enter the total number of eligible months you are claiming for all children on line 58229 of your Form PE428. Multiply the number of eligible months by $100 and enter the total amount on line 58230. The maximum amount you can claim for 2023 is $1,200 for each dependent child. Line 58360 - Pension income amount The amount you can claim on line 58360 is the amount on line 31400 of your return or $1,000, whichever is less. Note Only residents of Prince Edward Island are eligible for this amount. If you were not a resident of Prince Edward Island at the end of the year, you cannot claim this credit when calculating your Prince Edward Island tax even if you may have received income from a source in Prince Edward Island in 2023. Line 58365 - Children's wellness tax credit You can claim up to $500 per child for fees paid in 2023 relating to the cost of registration or membership for your (or your spouse's or common law partner's) child in a prescribed program of artistic, cultural, recreational, developmental or physical activity. The child must have been under 18 years of age at the start of the year during which fees were paid for an eligible activity related to the child's well-being. You can claim this amount if another person has not claimed the same fees and the total claimed is not more than the maximum allowable amount if only one of you were making the claim. Notes Eligible expenses do not include amounts that any person has claimed as a tax credit. Programs that are part of a school curriculum are not eligible. Prescribed program To qualify for this amount, a program must be: - ongoing (lasting at least eight consecutive weeks, or in the case of children's camps, five consecutive days) - supervised - suitable for children The program also has to meet at least one of the following conditions: - It contributes to the development of creative skills or expertise in an artistic or cultural activity - It provides a substantial focus on wilderness and the natural environment - It helps children develop and use particular intellectual skills - It includes structured interaction between children where supervisors teach or help children develop interpersonal skills - It provides enrichment or tutoring in academic subjects Note An activity that develops creative skills or expertise is eligible only if it is intended to improve a child's dexterity or co-ordination or helps in acquiring and applying knowledge through artistic or cultural activities such as literary arts, visual arts, performing arts, music, media, languages, customs, and heritage. Reimbursement of an eligible expense You can claim only the part of the amount that you have not been, or will not be, reimbursed for. However, you can claim the full amount if the reimbursement is reported as income (such as a benefit shown on a T4 slip) and you did not deduct the reimbursement anywhere else on your return Line 58400 - Caregiver amount You may be able to claim up to $2,446 for each dependant if, at any time in 2023, you (alone or with another person) kept a dwelling where you and that dependant lived. Each dependant must be one of the following: - your (or your spouse's or common-law partner's) child or grandchild - your (or your spouse's or common-law partner's) brother, sister, niece, nephew, aunt, uncle, parent, or grandparent who was a resident in Canada Note You cannot claim this amount for a person who was only visiting you. PAGE 5 Also, each dependant must meet all of the following conditions: - They were 18 years of age or older when they lived with you - Their net income in 2023 from line 23600 of their return (or the amount that it would be if they filed a return) was less than $14,399 - They were dependent upon you because of an impairment in physical or mental functions, or they were your (or your spouse's or common-law partner's) parent or grandparent born in 1958 or earlier If you had to make support payments for a child, you cannot claim an amount on line 58400 for that child unless both of the following conditions apply: - You were separated from your spouse or common-law partner for only part of 2023 because of a breakdown in your relationship - You did not claim any support amounts paid to your spouse or common-law partner on line 22000 of your return If both of these conditions are met, you can claim whichever of the following amounts is better for you: - line 58400 of your Form PE428 - line 22000 of your return How to claim this amount Complete the calculation for line 58400 using Worksheet PE428. If you are claiming this amount for more than one dependant, enter the total amount on line 58400 of your Form PE428. Claim made by more than one person If you and another person support the same dependant, you can split the claim for that dependant. However, the total amount of your claim and the other person's claim cannot be more than the maximum amount allowed for that dependant. Notes If you or someone else is claiming the caregiver amount (line 58400) for a dependant, you cannot claim the amount for infirm dependants age 18 or older (line 58200) for that dependant. If someone other than you is claiming the amount for an eligible dependant (line 58160), you cannot claim the caregiver amount for that dependant. Line 58440 - Disability amount for self You can claim this amount if the rules are met for claiming the amount on line 31600 of your return. If you were 18 years of age or older at the end of the year, enter $6,890 on line 58440 of your Form PE428. If you were under 18 years of age at the end of the year, use Worksheet PE428 to calculate the amount to enter on line 58440. Line 58480 - Disability amount transferred from a dependant You can claim this amount if the rules are met for claiming the amount on line 31800 of your return. Note If you and your dependant were not residents of the same province or territory at the end of the year, special rules may apply. For more information, call the CRA at 1-800-959-8281. Line 58500 - Teacher school supply amount You can claim up to $500 for expenses incurred in 2023 to buy eligible school supplies if you meet all of the following conditions: - You were a teacher or member of the program staff of an early learning and child care centre - You resided in Prince Edward Island at the end of the year - You bought the supplies with your own money Eligible school supplies are listed in the guidelines available from your principal or child care facility operator. How to claim this amount List the supplies that you bought using the approval form included with the guidelines. Supporting documents If you are filing a paper return, do not send any supporting documents. Keep all your documents in case you are asked to provide them later. Line 58560 - Your tuition and education amounts Complete Schedule PE(S11), Prince Edward Island Tuition and Education Amounts. Note If you claimed the Canada Training Credit (CTC) on line 45350 of your return, the amount you enter on line 59140 of your Schedule PE(S11) is already reduced by the CTC claimed. Transferring amounts If you do not use all of your 2023 tuition and education amounts to reduce your provincial income tax to zero, you can transfer all or part of your unused tuition and education amounts available to one of the following individuals that you designate: - your spouse or common-law partner (who would claim it on line 59090 of their Schedule PE(S2)) - your parent or grandparent (who would claim it on line 58600 of their Form PE428) - your spouse's or common-law partner's parent or grandparent (who would claim it on line 58600 of their Form PE428) Note If your spouse or common law partner is claiming an amount for you on line 58120 or line 58640 of their Form PE428, you cannot transfer your unused tuition and PAGE 6 education amounts for the current year to your (or your spouse's or common- law partner's) parent or grandparent. To designate who can claim the transferred amount and to specify the provincial amount they can claim, complete any of the following forms that you received as a student: - Form T2202, Tuition and Enrolment Certificate - Form TL11A, Tuition and Enrolment Certificate - University Outside Canada - Form TL11C, Tuition and Enrolment Certificate - Commuter to the United States Complete the "Transfer or carryforward of unused amounts" section of Schedule PE(S11) to transfer an amount. Carrying forward amounts Complete the "Transfer or carryforward of unused amounts" section of Schedule PE(S11) to calculate the amount you can carry forward to a future year. This amount is the part of your tuition and education amounts that you are not claiming for the current year and are not transferring to individuals that you designate. Supporting documents If you are filing a paper return, attach your completed Schedule PE(S11). Keep your supporting documents in case you are asked to provide them later. Line 58600 - Tuition and education amounts transferred from a child or grandchild You may be able to claim the transfer of all or part of the unused 2023 tuition and education amounts from your child or grandchild or their spouse or common-law partner. The maximum amount each student can transfer to you is $5,000 minus the current year's amount that they claimed. How to claim this amount Enter, on line 58600, the total of all tuition and education amounts transferred to you from each student as shown on their forms T2202, TL11A or TL11C. Notes The student must enter this amount on line 59200 of their Schedule PE(S11). They may choose to transfer an amount that is less than the available provincial amount. The student cannot transfer to you any unused tuition and education amounts carried forward from previous years. If you and the student were not residents of the same province or territory on December 31, 2023, special rules may apply. For more information, call the CRA at 1-800-959-8281. Line 58689 - Medical expenses for self, spouse or common-law partner, and your dependent children born in 2006 or later The medical expenses you can claim on line 58689 are the same as those you can claim on line 33099 of your return. They also have to cover the same 12- month period ending in 2023 and must be expenses that were not claimed for 2022. Line 58729 - Allowable amount of medical expenses for other dependants You can claim medical expenses for other dependants in addition to the medical expenses for self, spouse or common-law partner, and your dependent children born in 2006 or later on line 58689. The medical expenses you can claim on line 58729 are the same as those you can claim on line 33199 of your return. They also have to cover the same 12- month period ending in 2023 and must be expenses that were not claimed for 2022. Part C - Prince Edward Island tax Line 56 - Prince Edward Island tax on split income If you are reporting federal tax on split income on line 40424 of your return, complete Part 3 of Form T1206, Tax on Split Income, to calculate the Prince Edward Island tax to enter on line 42800 of your return. Line 64 - Prince Edward Island additional tax for minimum tax purposes If you need to pay federal minimum tax as calculated on Form T691, Alternative Minimum Tax, complete the calculation on line 64 of your Form PE428 to determine your Prince Edward Island additional tax for minimum tax purposes. Prince Edward Island low-income tax reduction You can claim the Prince Edward Island low-income tax reduction if you were a resident of Prince Edward Island on December 31, 2023, and any of the following conditions applies to you: - You were 19 years of age or older - You had a spouse or common-law partner - You were a parent If you had a spouse or common-law partner on December 31, 2023, you and your spouse or common-law partner need to decide who will claim this reduction for your family. The other spouse or common-law partner can claim any unused amount on their Form PE428. You cannot claim this tax reduction if, on December 31, 2023, you were confined to a prison or a similar institution for a total of more than six months during 2023. You cannot claim the tax reduction for a person who died in 2023. Line 68 - Unused low-income tax reduction from your spouse or common-law partner If you had a spouse or common-law partner on December 31, 2023, and they did not need to use all of the low-income tax reduction to reduce their Prince Edward Island tax to zero, you can claim their unused amount from their Form PE428 on line 68 of your Form PE428. PAGE 7 Adjusted family income calculation for the Prince Edward Island low-income tax reduction To calculate your adjusted family income, complete lines 70 to 75 of your Form PE428 using the information from your and your spouse's or common-law partner's returns for the year. Line 81 - Reduction for an eligible dependant Claim $350 if you claimed an amount for an eligible dependant on line 58160 of your Form PE428 and you did not claim an amount on line 79. Line 82 - Reduction for dependent children born in 2005 or later Enter on line 60999 the number of dependent children born in 2005 or later for whom you are claiming a reduction. Claim $300 for each dependant. Notes You cannot claim this reduction for a child you claimed on line 81 of your Form PE428. Only one person can claim the tax reduction for a child. Dependent child A dependent child is a child who, on December 31, 2023, met all of the following conditions: - They were 18 years of age or younger - They did not have a spouse or common-law partner - They were not a parent - They lived with you or were claimed as a dependant only by you or your spouse or common-law partner Unused low-income tax reduction that your spouse or common-law partner can claim If you had a spouse or common-law partner on December 31, 2023, they can claim on their Form PE428 any amount of the low-income tax reduction that you do not need to use to reduce your Prince Edward Island tax to zero. Complete lines 101 to 103 of your Form PE428 to calculate the unused amount that your spouse or common-law partner can claim on line 68 of their Form PE428. Line 91 - Provincial foreign tax credit If your federal foreign tax credit on non-business income is less than the related tax you paid to a foreign country, you may be able to claim a provincial foreign tax credit. How to claim this credit Complete Form T2036, Provincial or Territorial Foreign Tax Credit. Supporting documents If you are filing a paper return, attach your Form T2036. Line 94 - Prince Edward Island political contribution tax credit You can claim this credit if, in 2023, you contributed to a registered political party of Prince Edward Island or to a candidate seeking election to the Prince Edward Island Legislative Assembly. How to claim this credit Enter your total political contributions made in 2023 on line 63420 of your Form PE428. Then calculate and enter your credit on line 94 as follows: - For contributions of more than $1,150, enter $500 on line 94 of your Form PE428 - For contributions of $1,150 or less, complete the calculation for line 94 using Worksheet PE428 Supporting documents If you are filing a paper return, attach the official receipt (signed by an official of the recognized political party, or by the candidate's agent) for each contribution. Line 96 - Equity tax credit You can claim this credit for investments in eligible shares you acquired in 2023 (that you did not claim on your 2022 return) or in the first 60 days of 2024. Enter, on line 96 of your Form PE428, the amount shown on Certificate PE-ETC. Supporting documents If you are filing a paper return, attach your Certificate PE-ETC. Unused equity tax credit You can carry forward your unused equity tax credits for seven years or carry them back three years. You can claim up to $7,000 per tax year, including any unused amounts from other years. Enter, on line 97 of your Form PE428, the unused amount shown on your last notice of assessment or reassessment. To claim a carry-back, you must ask the CRA to adjust your prior-year return. For more information, go to canada.ca/change-tax-return. Part D - Prince Edward Island tax credits Line 100 - Prince Edward Island volunteer firefighter and volunteer search and rescue personnel tax credit You can claim this refundable tax credit if you met the rules for claiming the amount on line 31220 or 31240 of your return. To claim this credit, enter $1,000 on line 100 of your Form PE428. PAGE 8 Note Only residents of Prince Edward Island are eligible for this credit. If you are not a resident of Prince Edward Island, you cannot claim this credit when calculating your Prince Edward Island tax even if you may have received income from a source in Prince Edward Island in 2023. If you are preparing a return for a person who died in 2023, you can claim this credit on their final return if they were a resident of Prince Edward Island on the date of death and met the rules for claiming the amount on line 31220 or 31240 of their return.