Last updated: Mar. 20, 2018
“Stronger Services and Supports”
On 20 March 2018, Nova Scotia Finance and Treasury Board Minister Karen Casey tabled the province’s fiscal 2018–19 budget.
The budget contains a few tax measures affecting individuals and corporations.
Highlights
- Surplus of $21.3 million projected for 2017-18
- Surplus of $29.4 million forecast for 2018-19 fiscal year
- No income tax or HST rate increases
- Cannabis tax introduced
The minister anticipates a surplus of $29.4 million for 2018-19, and projects surpluses for each of the next 3 years.
Budget 2018–19 focused on strengthening important services and supports so all Nova Scotians have opportunities to grow and succeed.
The government continued to invest in and make progress on plans to improve healthcare and education (including early years), to create safer, more connected communities, and to strengthen the economy and connect more people to it.
The investments built on their strengths, opened more doors for those who have faced barriers, and drive innovation.
No new tax changes were announced in the budget.
Personal Tax Measures
Personal Income Tax Rates
The budget does not include any changes to personal income tax rates.
As a result, Nova Scotia’s personal income tax rates effective January 1, 2018 remain as follows:
|
2017/2018 Nova Scotia Personal Tax Rates |
|||
|
Bracket |
2017 Rates |
|
2018 Rates |
|
$0 – $29,590 |
8.79% |
|
8.79% |
|
$25,591 to $59,180 |
14.95% |
|
14.95% |
|
$51,181 to $93,000 |
16.67% |
|
16.67% |
|
$93,001 to $150,000 |
17.50% |
|
17.50% |
|
Above $150,000 |
21.00% |
|
21.00% |
For taxable income in excess of $144,489, the 2018 combined federal-Nova Scotia personal
income tax rates are as follows:
|
|
Personal Combined Federal/Provincial Marginal Rates |
||
|
2018 |
$144,490 to $150,000 |
$150,001 to |
Above |
|
Interest and regular income |
46.50% |
50.00% |
54.00% |
|
Capital gains |
23.25% |
25.00% |
27.00% |
|
Eligible dividends |
31.23% |
36.06% |
41.58% |
|
Non-eligible dividends |
38.63% |
41.58% |
47.33% |
Personal Tax Credits
This budget proposes changes to the following personal credits/amounts:
Medical Expenses
The province is removing the $10,000 maximum on eligible medical expenses that can be claimed through the Medical Expense Tax Credit for a financially dependent relative effective for the 2018 tax year.
Innovation Equity Tax Credit
Effective 1 January 2019, the province intends to introduce a new Innovation Equity Tax Credit, which will be more narrowly focused and will phase out the existing equity tax credit.
Other Personal Tax Measures
Basic Personal Amount, Spousal Amount and Eligible Dependent Amount
As announced in the 2017-18 budget, effective 1 January 2018, the basic personal amount, spousal amount and eligible dependant amount increased $3,000, from $8,481 to $11,481, for individuals with taxable income under $25,000.
The benefit decreases as income increases over $25,000 and ends when taxable income reaches $75,000.
Age Amount
Also as announced in the 2017-18 budget, effective 1 January 2018, the age amount increased $1,465, from $4,141 to $5,606, for individuals with taxable income under $25,000.
The benefit decreases as income increases over $25,000 and ends when taxable income reaches $75,000.
Nova Scotia Non-Refundable Tax Credits
The government confirmed today that personal tax credits for 2017 will be indexed by 1.0%.
The maximum tax credits amounts and actual Nova Scotia tax credits for 2017 and 2018 are set out below.
|
Nova Scotia Non-Refundable Tax Credits |
||||
|
|
2017 |
2018 |
||
|
Maximum Amount |
Nova Scotia |
Maximum Amount |
Nova Scotia |
|
|
Basic Personal Amount |
$8,481 |
$745 |
$8,481 |
$745 |
|
Spousal Amount |
8,481 |
745 |
8,481 |
745 |
|
Eligible dependent amount |
8,481 |
745 |
8,481 |
745 |
|
Age amount |
4,141 |
364 |
4,141 |
364 |
|
Infirm dependent amount |
2,798 |
246 |
2,798 |
246 |
|
CPP Contributions |
2,564 |
225 |
2,594 |
228 |
|
EI Contributions |
836 |
73 |
858 |
75 |
|
Pension income amount |
1,173 |
103 |
1,173 |
103 |
|
Disability amount |
7,341 |
645 |
7,341 |
645 |
|
Disability supplement |
3,349 |
294 |
3,349 |
294 |
|
Tuition and education amounts |
Variable |
Variable |
Variable |
Variable |
|
Adoption expenses |
0 |
0 |
0 |
0 |
|
Medical expenses |
Variable |
Variable |
Variable |
Variable |
|
Medical expenses (other dependents) |
N/A |
N/A |
N/A |
N/A |
|
Caregiver amount |
4,898 |
431 |
4,898 |
431 |
|
Interest on student loans |
Variable |
Variable |
Variable |
Variable |
|
Donations & Gifts |
200 |
20 |
200 |
20 |
|
In general, credits are multiplied by 8.79% to arrive at the deduction from Nova Scotia Tax. In the case of donations and gifts over $200, the credit is 21% |
||||
Corporate Tax Measures
Corporate Income Tax Rates
The budget confirmed there was no proposed changes to corporate tax.
As a result, Nova Scotia’s corporate income tax rates effective January 1, 2018 remain as follows:
|
Corporate Income Tax Rates — As of January 1, 2018 |
||
|
|
Nova Scotia |
Combined Federal and Nova Scotia |
|
General |
16% |
31% |
|
Small business* |
3.0% |
13% |
|
* on first $500,000 of active business income |
||
|
* On 24 October 2017, the federal government tabled a notice of ways and means motion to implement reductions in the small-business corporate income tax rate, which were announced on 16 October 2017. The federal small-business rate is reduced from 10.5% to 10.0% effective 1 January 2018 and will be further reduced to 9.0% effective 1 January 2019. |
||
|
Corporate Income Tax Rates — As of January 1, 2019 |
||
|
|
Nova Scotia |
Combined Federal |
|
General |
16% |
31% |
|
Small business* |
3.0% |
12% |
|
* on first $500,000 of active business income |
||
|
* On 24 October 2017, the federal government tabled a notice of ways and means motion to implement reductions in the small-business corporate income tax rate, which were announced on 16 October 2017. The federal small-business rate is reduced from 10.5% to 10.0% effective 1 January 2018 and will be further reduced to 9.0% effective 1 January 2019. |
||
Business Tax Measures
The minister did not propose any changes to other business tax measures.
Harmonized Sales Tax
The budget does not include any changes to the harmonized sales tax rate of 15%.
Other Measures
(Not related to tax)
Cannabis Tax
In December 2017, the province agreed in principle to enter into a coordinated cannabis tax framework with the federal government for a two-year period following the legalization of recreational cannabis.
A federal excise duty of $1 per gram of flowering material in a cannabis product will be imposed, of which $0.75 per gram will be collected on behalf of the province.
(Source: Nova Scotia Government)