Information for Residents of Prince Edward Island

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Table of contents

What's new for 2015?

The low-income tax reduction amounts have increased. There is a new low-income age reduction amount for seniors aged 65 or older as well as a new low-income age reduction amount for your spouse or common-law partner who is 65 years of age or older. Form PE428, Prince Edward Island Tax and Credits, reflects these changes.

General information

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 payments of the federal GST/HST credit. For more information on payment amounts, see Booklet RC4210, GST/HST Credit.

You no longer have to apply for the GST/HST credit, including the PEISTC. When you file your tax return, the Canada Revenue Agency (CRA) will determine your eligibility and tell you if you are entitled to receive the credit.

File your tax return – You (and your spouse or common law partner) should file your 2015 tax return(s) as soon as possible. The information you give on your return(s) will determine what amount you will be entitled to receive starting in July 2016.

This credit is fully funded by the Province of Prince Edward Island.

Completing your Prince Edward Island form

You can download and print a copy of Form PE428, Prince Edward Island Tax and Credits, which you need to calculate your Prince Edward Island tax and credits. Attach a completed copy of Form PE428 to your return.

The following information will help you complete Form PE428.

The terms spouse and common-law partner are defined in the General Income Tax and Benefit Guide.

The term end of the year means December 31, 2015, the date you left Canada if you emigrated in 2015, or the date of death for a person who died in 2015.

Tax Tip

Many rules for calculating Prince Edward Island tax are based on the federal Income Tax Act. As a result, you should calculate your federal tax first.

Form PE428, Prince Edward Island Tax and Credits

Complete Form PE428 if you were a resident of Prince Edward Island at the end of the year.

If you had income from a business (including income you received as a limited or non-active partner), and the business has a permanent establishment outside Prince Edward Island, complete Form T2203, Provincial and Territorial Taxes for 2015 - Multiple Jurisdictions, instead of completing Form PE428.

You also have to complete Form PE428 if you were a non-resident of Canada in 2015 and you earned income from employment in Prince Edward Island or received income from a business with a permanent establishment only in Prince Edward Island.

Step 1 - Prince Edward Island non-refundable tax credits

The eligibility criteria and rules for claiming the Prince Edward Island non-refundable tax credits are the same as for the federal non-refundable tax credits. However, the value and calculation of most Prince Edward Island non-refundable tax credits are different from the corresponding federal credits.

Newcomers to Canada and emigrants

If you prorated any of the amounts you claimed on lines 300 to 306, 315, 316, 318, 324, and 326 of your federal Schedule 1, you have to prorate the corresponding provincial amounts on lines 5804 to 5820, 5840, 5844, 5848, 5860, and 5864.

Line 5804 - Basic personal amount

Claim $7,708.

Line 5808 - Age amount

You can claim this amount if you were 65 years of age or older on December 31, 2015, and your net income (line 236 of your return) is less than $53,112.

If your net income is:

  • $28,019 or less, enter $3,764 on line 5808; or
  • more than $28,019 but less than $53,112, complete the calculation for line 5808 on the Provincial Worksheet.
Tax Tip

You may be able to transfer all or part of your age amount to your spouse or common-law partner or to claim all or part of his or her age amount. For more information, read line 5864.

Line 5812 - Spouse or common-law partner amount

You can claim this amount if the rules are met for claiming the amount on line 303 of federal Schedule 1 and your spouse's or common-law partner's net income (line 236 of his or her return, or the amount that it would be if he or she filed a return) is less than $7,201.

Complete the calculation on Form PE428, and enter the amount on line 5812.

Note

Enter your marital status and the information about your spouse or common-law partner (including his or her net income, even if it is zero) in the Identification area on page 1 of your return.

Line 5816 - Amount for an eligible dependant

You can claim this amount if the rules are met for claiming the amount on line 305 of federal Schedule 1 and your dependant's net income (line 236 of his or her return, or the amount that it would be if he or she filed a return) is less than $6,923.

Complete the calculation on Form PE428, and enter the amount on line 5816.

Note

If you were a single parent on December 31, 2015, and you choose to include all universal child care benefit amounts you received in 2015 in the income of your dependant, include this amount in the calculation of his or her net income.

Line 5820 - Amount for infirm dependants age 18 or older

You can claim this amount if the rules are met for claiming the amount on line 306 of federal Schedule 1 and your dependant's net income (line 236 of his or her return, or the amount that it would be if he or she filed a return) is less than $7,412.

Note

You may be able to claim an amount on this line even if you claimed an amount on line 5816.

Complete the calculation for line 5820 on the Provincial Worksheet.

Line 5823 - 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 less than six years of age.

You can claim $100 per month for each child, if all of the following conditions are met:

  • 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 for which you are claiming;
  • no one else claimed this amount for the child for the month; and
  • no one has received a special allowance under the Children's Special Allowances Act for the child for the month you are claiming.

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 which one of you will claim this amount.

Complete the "Details of amount for young children" chart on Form PE428. Provide the details for each child you are claiming, including the number of months you are claiming for that child.

Enter the total number of months you are claiming for all children beside box 6372 of Form PE428.

Claim $100 for each month, and enter the total amount on line 5823. The maximum amount you can claim for 2015 is $1,200 for each dependent child.

Line 5824 - CPP or QPP contributions through employment

Enter on this line the amount you claimed on line 308 of your federal Schedule 1.

Line 5828 - CPP or QPP contributions on self-employment and other earnings

Enter on this line the amount you claimed on line 310 of your federal Schedule 1.

Line 5832 - Employment insurance premiums through employment

Enter on this line the amount you claimed on line 312 of your federal Schedule 1.

Line 5829 - Employment insurance premiums on self-employment and other eligible earnings

Enter on this line the amount you claimed on line 317 of your federal Schedule 1.

Line 5836 - Pension income amount

You can claim this amount if you met the rules for claiming the amount on line 314 of federal Schedule 1.

The amount you can claim on line 5836 is the amount on line 314 of your federal Schedule 1 or $1,000, whichever is less.

Note

Only residents of Prince Edward Island are eligible for this amount. If you are not a resident of Prince Edward Island, you cannot claim this non-refundable tax credit in calculating your Prince Edward Island tax even though you may have received income from a source inside Prince Edward Island in 2015.

Line 5840 - Caregiver amount

You can claim this amount if the rules are met for claiming the amount on line 315 of federal Schedule 1 and your dependant's net income (line 236 of his or her return, or the amount that it would be if he or she filed a return) is less than $14,399.

Complete the calculation for line 5840 on the Provincial Worksheet.

Line 5844 - Disability amount (for self)

You can claim this amount if you met the rules for claiming the amount on line 316 of federal Schedule 1.

If you were 18 years of age or older at the end of the year, enter $6,890 on line 5844.

If you were under 18 years of age at the end of the year, you may be eligible to claim a supplement up to a maximum of $4,019 in addition to the base amount of $6,890. Complete the calculation for line 5844 on the Provincial Worksheet.

Line 5848 - Disability amount transferred from a dependant

You can claim this amount if the rules are met for claiming the amount on line 318 of federal Schedule 1.

Complete the calculation for line 5848 on the Provincial Worksheet.

Line 5850 - Teacher school supply amount

If you are a teacher or a member of the program staff of an early learning and child care centre, and you resided in Prince Edward Island at the end of the year, you can claim an amount for expenses incurred in purchasing eligible school supplies with your own money.

Eligible school supplies are listed in the guidelines available from your principal or child care facility operator. Document the supplies you purchased on the approval form included with the guidelines. You can claim up to $500 of eligible expenses incurred in 2015.

Supporting documents - If you are filing electronically, or filing a paper return, do not send any documents. Keep all your documents in case we ask to see them at a later date.

Line 5852 - Interest paid on your student loans

Enter on this line the amount you claimed on line 319 of your federal Schedule 1.

Line 5856 - Your tuition and education amounts

Complete Schedule PE(S11), Prince Edward Island Tuition and Education Amounts.

Supporting documents - If you are filing electronically, keep all your documents in case we ask to see them at a later date. If you are filing a paper return, attach your completed Schedule PE(S11), but do not send your other documents. Keep all your documents in case we ask to see them at a later date.

Transferring and carrying forward amounts

You may not need all of your 2015 tuition and education amounts to reduce your provincial income tax to zero. In this case, you can transfer all or some of the unused part to one person, either your spouse or common-law partner (who would claim it on line 5864) or your or your spouse's or common-law partner's parent or grandparent (who would claim it on line 5860).

You can only transfer an amount to your or your spouse's or common-law partner's parent or grandparent, if your spouse or common-law partner does not claim an amount for you on line 5812 or 5864.

Complete the "Transfer/Carryforward of unused amount" section of Schedule PE(S11) to calculate the provincial amount available to transfer, as well as Form T2202A, Tuition, Education, and Textbook Amounts Certificate, TL11A, Tuition, Education, and Textbook Amounts Certificate - University Outside Canada, TL11B, Tuition, Education and Textbook Amounts Certificate - Flying School or Club, or TL11C, Tuition, Education, and Textbook Amounts Certificate - Commuter to the United States, to designate who can claim the transferred amount and to specify the amount this person can claim.

This amount may be different from the amount calculated for the same person on your federal Schedule 11. Enter the provincial amount you are transferring on line 20 of your Schedule PE(S11).

Tax Tip

If you are transferring an amount to a designated individual, only transfer the amount this person can use. That way, you can carry forward as much as possible to use in a future year.

Complete the "Transfer/Carryforward of unused amount" section of Schedule PE(S11) to calculate the amount you can carry forward to a future year. This amount corresponds to the part of your tuition and education amounts you do not need to use (and do not transfer) for the year.

Line 5860 - Tuition and education amounts transferred from a child

You can claim these amounts if the rules are met for claiming an amount on line 324 of federal Schedule 1.

Enter on line 5860 the total of all provincial amounts that each student has transferred to you as shown on his or her Form T2202A, TL11A, TL11B, or TL11C.

Notes

The student must have entered this amount on line 20 of his or her Schedule PE(S11). He or she may have chosen 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 a previous year.

If you and the student were residents of different provinces or territories on December 31, 2015, special rules may apply. Contact the Canada Revenue Agency to determine the amount you can claim on line 5860.

Other rules may apply if the student has a spouse or a common-law partner. Read line 324 in the General Income Tax and Benefit Guide.

Supporting documents - If you are filing electronically, or filing a paper return, do not send any documents. Keep all your documents in case we ask to see them at a later date. The student must attach Schedule PE(S11) to his or her paper return.

Line 5864 - Amounts transferred from your spouse or common-law partner

You can claim these amounts if the rules are met for claiming an amount on line 326 of federal Schedule 1.

Complete Schedule PE(S2), Provincial Amounts Transferred From Your Spouse or Common-Law Partner, and attach a copy to your return.

Line 5868 - Medical expenses for self, spouse or common-law partner, and your dependent children born in 1998 or later

The medical expenses you can claim on line 5868 are the same as those you can claim on line 330 of your federal Schedule 1. They have to cover the same 12-month period ending in 2015, and no one claimed them on a 2014 return. However, your total expenses have to be more than either 3% of your net income (line 236 of your return) or $1,678, whichever is less.

Note

If the total medical expenses claimed are more than $1,678 but less than $2,028, it is important that you enter the amount on line 5868 and on line 330 of your federal Schedule 1.

Line 5872 - Allowable amount of medical expenses for other dependants

In addition to the medical expenses claimed on line 5868, you can claim medical expenses for other dependants.

The medical expenses you can claim on line 5872 are the same as those you can claim on line 331 of your federal Schedule 1. They have to cover the same 12-month period ending in 2015, and no one claimed them on a 2014 return.

The total expenses for each dependant have to be more than either 3% of that dependant's net income (line 236 of his or her return) or $1,678, whichever is less.

Complete the calculation for line 5872 on the Provincial Worksheet.

Line 5896 - Donations and gifts

Enter the amounts from lines 345 and 347 of your federal Schedule 9 and multiply them by the rates at lines 28 and 29 of Form PE428.

Step 2 - Prince Edward Island tax on taxable income

Enter on line 32 your taxable income from line 260 of your return. Complete the appropriate column depending on the amount entered.

Step 3 - Prince Edward Island tax

Line 41 - Prince Edward Island tax on split income

If you have to pay federal tax on split income on line 424 of your federal Schedule 1, complete Part 2 of Form T1206, Tax on Split Income, to calculate the Prince Edward Island tax that applies to this income.

Form T1206 also contains a special rule that applies to the amount you enter on line 428 of your return. For more information on tax on split income, see the General Income Tax and Benefit Guide.

Line 49 - Prince Edward Island additional tax for minimum tax purposes

If you have to pay federal minimum tax as calculated on Form T691, Alternative Minimum Tax, you will also have to determine your Prince Edward Island additional tax for minimum tax purposes.

To do this, complete the calculation on line 49 of Form PE428. For more information about minimum tax, see the General Income Tax and Benefit Guide.

Line 51 - Prince Edward Island surtax

You have to pay a surtax of 10% if the amount on line 50 is more than $12,500.

Prince Edward Island low-income tax reduction

You can claim this tax reduction if you were a resident of Prince Edward Island on December 31, 2015, and any of the following conditions applied to you:

  • you were 19 years of age or older;
  • you had a spouse or common-law partner; or
  • you were a parent.

If you had a spouse or common-law partner on December 31, 2015, you and your spouse or common-law partner have to decide which one of you will claim this low-income tax reduction for your family. Any unused amount can be claimed by the other spouse or common-law partner on their Form PE428.

You cannot claim this tax reduction if, on December 31, 2015, you were confined to a prison or a similar institution and were there for a total of more than six months during 2015.

Also, you cannot claim the tax reduction for a person who died in 2015.

Line 53 - Unused low-income tax reduction from your spouse or common-law partner

If you had a spouse or common-law partner on December 31, 2015, and he or she did not need all of the low-income tax reduction to reduce his or her Prince Edward Island tax to zero, you can claim, on line 53, the unused amount calculated on his or her Form PE428.

Adjusted family income

When you calculate your adjusted family income (lines 55 to 60 of Form PE428), complete columns 1 and 2 using the information from your and your spouse's or common-law partner's returns for the year.

Note

Enter your marital status and the information about your spouse or common-law partner (including his or her net income, even if it is zero) in the Identification area on page 1 of your return.

Line 62 - Basic reduction

Claim $300 for yourself.

Line 63 - Age reduction for self

Claim $250 if you were 65 years old or older on December 31, 2015.

Line 64 - Reduction for spouse or common-law partner

Claim $300 if you had a spouse or common-law partner on December 31, 2015.

Line 65 - Age reduction for spouse or common-law partner

Claim $250 if your spouse or common-law partner was 65 years of age or older on December 31, 2015.

Line 66 - Reduction for an eligible dependant

Claim $300 if you claimed the amount for an eligible dependant on line 5816 of Form PE428 and you did not claim an amount on line 64.

Line 67 - Reduction for dependent children born in 1997 or later

Enter beside box 6099 the number of dependent children you have who were born in 1997 or later.

Claim $250 for each child.

Do not include a child for whom you claimed the reduction for an eligible dependant on line 66 of Form PE428.

Only one person can claim the tax reduction for a child.

Who is a dependent child?

A dependent child is a person who, on December 31, 2015:

  • was 18 years of age or younger;
  • did not have a spouse or common-law partner;
  • was not a parent; and
  • either lived with you or was claimed as a dependant only by you or your spouse or common-law partner.
Unused low-income tax reduction that can be claimed by your spouse or common-law partner

If you had a spouse or common-law partner on December 31, 2015, your spouse or common-law partner can claim, on his or her Form PE428, any amount of the low-income tax reduction that you do not need to reduce your Prince Edward Island tax to zero.

Complete the calculation at lines 86 to 88 on your Form PE428 to determine the unused amount that your spouse or common-law partner can claim on line 53 on his or her Form PE428.

Line 76 - 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 eligible to claim a provincial foreign tax credit.

To claim the credit, complete Form T2036, Provincial or Territorial Foreign Tax Credit.

Enter, on line 76 of Form PE428, the tax credit calculated on line 5 of Form T2036.

Supporting documents - If you are filing electronically, keep all of your documents in case we ask to see them at a later date. If you are filing a paper return, attach your Form T2036.

Lines 78 and 79 - Prince Edward Island political contribution tax credit

You can claim a credit for the contributions you made in 2015 to a recognized political party of Prince Edward Island or to a candidate seeking election to the Prince Edward Island Legislative Assembly.

How to claim

Enter your total contributions on line 78 of Form PE428 and calculate the amount to enter on line 79, as follows:

  • For contributions of $1,150 or less, complete the calculation for line 79 on the Provincial Worksheet.
  • For contributions of more than $1,150, enter $500 on line 79 of Form PE428.

Supporting documents - If you are filing electronically, keep your receipts in case we ask to see them at a later date. If you are filing a paper return, for each contribution attach, the official receipt signed by an official of the recognized political party, or by the candidate's agent.

Line 81 - Equity tax credit

You can claim this credit for investments in eligible shares you acquired in 2015 or in the first 60 days of 2016.

Enter on line 81 of Form PE428 the amount shown on Certificate PE-ETC. The maximum you can claim is $7,000.

Supporting documents - If you are filing electronically, keep all of your documents in case we ask to see them at a later date. If you are filing a paper return, attach your Certificate PE-ETC.

Unused equity tax credit

You can carry forward unused credits seven years or back three years. The maximum credit you can claim is $7,000 per tax year, including any unused amounts from other years.

To claim an unused amount, enter on line 82 of Form PE428 the unused amount shown on your notice of assessment or notice of reassessment.

To claim a carry-back amount, you must request an adjustment to your prior-year return. For more information, read "How to change a return?" in the General Income Tax and Benefit Guide.

Prince Edward Island volunteer firefighter tax credit (line 85)

You can claim this refundable tax credit if you met the rules for claiming the amount on line 362 of federal Schedule 1.

If you qualify for this credit, enter $500 on line 85 of Form PE428.

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 in calculating your Prince Edward Island tax even though you may have received income from a source inside Prince Edward Island in 2015.

If you are preparing a return for a person who died in 2015, you can claim this credit on the deceased person's final return if he or she was a resident of Prince Edward Island on the day of death and met all of the conditions.

For more information

If you have any questions about Prince Edward Island tax and the low-income tax reduction, visit the Canada Revenue Agency (CRA) Web site or call the CRA at 1-800-959-8281.

To get forms, go to Forms and publications.

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