Provincial Personal Income Tax
Prince Edward Island’s personal income tax is administered and collected by the federal government through the Canada Revenue Agency. PEI’s income tax rates and bracket structures are set by the Government of PEI and applied to federally defined PEI taxable income.
Personal Income Tax Changes
The Government of Prince Edward Island has been saving Islanders money by reducing income taxes in each provincial operating budget since 2019. Tax relief measures for 2026 will provide Islanders with additional savings this calendar year. Changes effective as of January 1, 2026 include raising the basic personal and spouse amounts and income threshold for the Low-income Tax Reduction along with increasing the tax bracket thresholds by 1.8%.
The 2026 basic personal amount has increased by nearly 64% since 2019 and the age amount for our seniors by 73% over the same time period. Additionally, a children’s wellness tax credit was introduced and the volunteer firefighter tax credit was doubled and extended to volunteer search and rescue personnel.
| 2019 | 2026 | % Change | |
| Spouse or common-law partner amount / Amount for eligible dependent: | |||
| - Maximum amount | $7,780 | $12,740 | 63.8% |
| Age amount | |||
| - Maximum amount | $3,764 | $6,510 | 73.0% |
| - Income threshold | $28,019 | $36,600 | 30.6% |
| Low-income tax reduction threshold | $17,000 | $23,000 | 35.3% |
| Children’s wellness tax credit | $0 | $1,000 | New |
| Volunteer firefighter and volunteer search and rescue credit | $500 | $1,000 | 100.0% |
New Tax Brackets
Beginning in 2024, the three tax bracket plus a surtax system was replaced with a five-bracket system to improve transparency. In 2026, the income thresholds were increased by 1.8% compared to 2025, meaning taxes have come down for those income levels that need it most and everyone can earn more money before being moved to a higher tax bracket.
PEI Tax Brackets
| 2019-2023 | 2026 | |||||
| From | To | Rate % | From | To | Rate % | |
| Up to $31,984 | 9.80% | Up to $33,928 | 9.50% | |||
| $31,984 to $63,969 | 13.80% | $33,928 to $65,820 | 13.47% | |||
| $63,969 to $104,000 | 16.70% | $65,820 to $106,890 | 16.60% | |||
| Over $104,000 (surtax) | 18.37% | $106,890 to$142,520 | 17.62% | |||
| Over $142,520 | 19.00% | |||||
To file your personal income tax, please refer to the official forms provided by the Canada Revenue Agency (CRA). All necessary forms and publications can be downloaded directly from the CRA's website.
PEI Child Benefit
Beginning January 2025, eligible families now receive a monthly amount per child. This provincial benefit is harmonized with the Canada Child Benefit and is delivered by CRA on behalf of the province.
| Adjusted Income | Annual Amount per Child |
| Less than $45,000 | $360 |
| $45,000 to $80,000 | $240 |
| Greater than $80,000 | $0 |
Prince Edward Island Sales Tax Credit
The Prince Edward Island sales tax credit is a tax-free amount paid to help offset the increase in the sales tax for households with low and modest incomes. This amount is combined with the quarterly payments of the federal GST/HST credit.
The program provides an annual credit of up to $165 for a single individual and up to $220 for single parents and couples.
Children’s Wellness Tax Credit
Wellness is important to Islanders, especially in our children and youth. Knowing that organized activities can be expensive for families, a Children’s Wellness Tax Credit has been created to assist with these costs.
Since January 1, 2021, Islanders are able to claim a non-refundable wellness tax credit of up to $500 per child. Effective January 1, 2024 the amount is doubling to $1,000 per child. This tax credit is for all families with children under the age of 18 for eligible activities related to their children’s well-being. This higher amount can be claimed when completing their taxes, for the 2024 taxation year.
Receipts should be kept for activities during the year to claim this credit. Eligible activities could include sports, arts, cultural camps and activities for eight-weeks or five consecutive days of activity.
Additional information to assist Islanders claiming this credit can be found on Line 58365 of the PEI Income Tax return (PE428).
For more information, the Prince Edward Island benefits programs delivered by CRA can be found on the Canada Revenue Agency website.