Personal income tax overview and tax credits / rebates

Alberta's tax system supports low- and middle-income households while promoting opportunity and investment.

Overview

Alberta has the highest basic personal and spousal amounts in Canada, meaning that Albertans are able to earn more before they have to start paying provincial income tax (see Alberta's Non-Refundable Tax Credit Block).

When all taxes are taken into consideration, Albertans across all income ranges generally pay lower overall taxes compared to other provinces. For more information, see Alberta's Tax Advantage.


Changes to Alberta's personal income tax system
(as of October 1, 2015) and revenue raised

In 2015, the government implemented a progressive personal income tax rate structure to help reduce our reliance on volatile non-renewable resource revenue and provide additional revenue to fund the public services and infrastructure that benefit Albertans. The increase in personal income tax revenue is estimated at $875 million in 2017-18, as reported in Budget 2017.

The following table shows an estimate of how much of the additional revenue comes from each income tax bracket, along with an estimate of the number of taxfilers whose top tax rate falls within the bracket.

Tax Bracket
(2017)
Tax Rate Additional  Personal Income Tax
Revenue from Tax Change (2017-18)
Number
of Taxfilers
Proportion
of Taxfilers
Up to $126,625
10%
N/A
2,857,284
92.1%
$126,625.01 to $151,950
12%
$13 million
81,145
2.6%
$151,950.01 to $202,600
13%
$61 million
75,162
2.4%
$202,600.01 to $303,900
14%
$120 million
50,462
1.6%
$303,900.01 and up
15%
$681 million
38,518
1.2%
Total:
N/A
$875 million
3,102,571
N/A

Source: Alberta Treasury Board and Finance.

Notes:

  • Based on Budget 2017 estimates. 
  • Estimates are based on the most recent historical data available at the time. Revenues are adjusted to 2017-18 and incorporate estimates of how tax increases impact taxable income.

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Tax credits and rebates

The Government of Alberta provides two generous refundable tax credit programs for families with children, the Alberta Child Benefit (ACB) and the Alberta Family Employment Tax Credit (AFETC). Together, these programs are estimated to provide about $320 million to Alberta families in 2017‑18.

The Alberta Climate Leadership Adjustment Rebate helps lower- and middle-income households with the costs of the carbon levy. The rebate is part of the Climate Leadership Plan and will provide $1.4 billion over 3 years. It is estimated that over 60% of households will receive a full or partial rebate.

To support Alberta businesses, government introduced the Alberta Investor Tax Credit (AITC), aimed at supporting jobs and economic diversification. The AITC offers a 30% tax credit to investors who make equity investments in eligible Alberta businesses that undertake research, development, or commercialization of new technology, new products, or new processes. It is also applicable to businesses engaged in interactive, digital media development, video post-production, digital animation or tourism.

If you have questions regarding eligibility or other details on the AITC:

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Income tax credit indexing

Alberta’s personal income tax system is indexed to inflation to ensure that the value of tax credits is not eroded over time, and that taxpayers are not pushed into higher tax brackets. In 2017, the credit amounts increased by 1.3%.

Benefit amounts and phase-out thresholds for the Alberta Child Benefit and the Alberta Family Employment Tax Credit were also increased by 1.3% in 2017.

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Personal income tax calculator

Use our personal income tax calculator to:

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Commonly used forms

Alberta's personal income tax system is administered by the Canada Revenue Agency (CRA). See commonly used forms available from the CRA:

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Personal income tax contact information

If you have questions about your own personal income taxes, or you are mailing a personal income tax return:

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Page last updated:  February 14, 2018