Income Tax In New Brunswick: How Much?

If you live in New Brunswick, Canada, the amount of income tax you pay depends on your total taxable income and the New Brunswick tax rates for the year. For example, if you are in the lowest New Brunswick tax bracket (taxable income less than $47,715), your tax rate will be 9.40%. The tax rate increases as your income increases, with the highest tax bracket being $176,756. New Brunswick also offers various tax credits and deductions, such as the NB Child Tax Benefit and the NB Low-Income Tax Reduction, which can reduce the amount of tax you owe.

Marginal tax rates

For example, the marginal tax rate for the lowest tax bracket (taxable income of less than $47,715) is 9.4%. For the next bracket ($47,715 to $95,431), the marginal tax rate is 14%. This means that on the first $47,715 of taxable income, a rate of 9.4% is applied, and then for income between $47,715 and $95,431, a rate of 14% is applied. The marginal tax rate for the highest income bracket (over $176,756) is 19.5%.

The combined federal and provincial tax rate in New Brunswick ranges from 24.4% to 52.5%. The federal income tax rates in 2023 range from 15% to 33%.

The marginal tax rate for capital gains is a percentage of total capital gains. Capital gains tax is applied to 50% of capital gains. If you are in the lowest tax bracket, your capital gains tax rate will be 12.2%. If you are in the highest tax bracket, your capital gains tax rate will be 26.65%.

Tax deductions

When it comes to tax deductions in New Brunswick, there are several factors and credits to consider. Firstly, it's important to understand the difference between tax credits and deductions. While both can reduce your tax burden, a tax deduction reduces your taxable income, while a tax credit directly reduces the amount of tax you owe.

In New Brunswick, the tax rates range from 9.4% to 19.5% of income, and the combined federal and provincial tax rate can be between 24.4% and 52.5%. The specific rate you pay depends on your taxable income and which tax bracket you fall into. The more income you earn, the higher your tax rate will be.

Now, here are some key points about tax deductions in New Brunswick:

• Basic Personal Amount: For the 2024 tax year, the basic personal amount in New Brunswick is $13,044. This means you don't have to pay any provincial income tax if your income is equal to or less than this amount. If your income exceeds this amount, you can subtract the tax on $13,044 from your total income tax liability.
• Low-Income Tax Reduction: Implemented in 2001, the Low-Income Tax Reduction aims to lower the tax burden for low-income individuals and families. It provides a non-refundable tax credit based on your income. For the 2023 tax year, you are eligible if your income is less than $45,252, or your family income is less than $70,118. The maximum reduction that can be claimed is $1,492.
• Medical Expense Credit: This credit allows you to claim a non-refundable tax credit for certain medical expenses that you or your family may have incurred.
• NB Political Contribution Tax Credit: This credit encourages political participation and reduces your tax burden if you have made political contributions in New Brunswick.
• NB Small Business Investor Tax Credit: This credit is designed to support small businesses in New Brunswick by providing a tax incentive for investors.
• Capital Gains Tax: In New Brunswick, only 50% of your realized capital gains are taxable. If you invest in stocks, mutual funds, exchange-traded funds (ETFs), or real estate, and those investments increase in value, you will be taxed on the capital gains when you cash in your investment. The tax rate on capital gains depends on your marginal tax rate, which is determined by your income level.
• Other Deductions and Credits: New Brunswick also offers other deductions and credits, such as the NB child tax benefit, NB harmonized sales tax credit, NB education and tuition tax credits, and more. These can further reduce your tax liability.

Remember, tax laws and rates can change from year to year, so it's important to stay informed about the latest updates. Consult official government sources or a tax professional for the most accurate and up-to-date information regarding tax deductions in New Brunswick.

Tax credits

New Brunswick's personal income tax is administered and collected by the federal government through the Canada Revenue Agency. New Brunswick's personal income tax rates and bracket structure are applied to federally-defined New Brunswick taxable income. Tax credit amounts are multiplied by the lowest New Brunswick personal income tax rate to calculate the provincial tax credits.

The New Brunswick Low-Income Tax Reduction was implemented in 2001 to reduce the tax payable for low-income individuals and families. The low-income tax reduction provides a non-refundable tax credit depending on your income. For 2023, you are eligible for this tax credit if your income is less than $45,252 or your family income is less than $70,118.

Eligible low-income families with dependent children may also receive the New Brunswick Child Tax Benefit and the New Brunswick Working Income Supplement, depending on their income level.

There are several other credits available to residents of New Brunswick that can reduce the income tax owed, such as:

• Medical Expense Credit: You may be able to claim a non-refundable tax credit for medical expenses you have paid for yourself or your spouse/common-law partner.
• Political Contribution Tax Credit: You can claim a non-refundable tax credit for monetary contributions made to a registered provincial or territorial political party or to a registered candidate during an election in a province or territory.
• Small Business Investor Tax Credit: This tax credit is for individuals who invest in small businesses in New Brunswick.
• Seniors' Home Renovation Tax Credit: Seniors who are 65 years or older in New Brunswick, or their family members, could qualify for a refundable tax credit to help with the cost of making their homes safer and more accessible.
• Residential Property Tax Credit: If you own a property that is your principal residence, you could be eligible for a residential property credit. A principal residence is where you eat and sleep most of the time. This tax credit goes against the provincial portion of your property tax.
• Property Tax Allowance: The Property Tax Allowance provides tax relief to low-income property owners. To qualify for the Property Tax Allowance, you must own your property, it must be your principal residence, and you must be receiving the Residential Property Tax Credit.
• Property Tax Deferral Program for Seniors: This program provides property tax relief to eligible seniors in New Brunswick, allowing those interested in the program to apply for a deferral of the annual increase in property taxes on their principal residence.

Tax brackets

New Brunswick's personal income tax is collected by the federal government through the Canada Revenue Agency. The tax rates in New Brunswick range from 9.4% to 19.5% of income, and the combined federal and provincial tax rate is between 24.4% and 52.5%. The amount of tax your employer deducts from your paycheque varies based on where you fall inside the federal and New Brunswick tax brackets.

The tax brackets for New Brunswick are based on your taxable income and are structured as follows:

• 9.68% on the first $40,492 to $43,401 of taxable income
• 9.4% on the first $43,835 to $44,887 of taxable income
• 9.4% on the first $47,715 to $49,958 of taxable income
• 14.82% on the first $40,492 to $43,835 of taxable income
• 14.82% on the first $49,958 to $89,775 of taxable income
• 14% on the first $47,715 to $95,431 of taxable income
• 14% on the first $49,958 to $99,916 of taxable income
• 16.52% on the first $80,985 to $145,955 of taxable income
• 16% on the first $95,431 to $176,756 of taxable income
• 16% on the first $99,916 to $185,064 of taxable income
• 17.84% on the first $131,664 to $166,280 of taxable income
• 20.3% on taxable income over $160,776

The basic personal amount for 2024 in New Brunswick is $13,044. This is the amount on which you are not required to pay any tax. You will not owe any provincial income tax if your income is lower than the basic personal amount. If your income is more than the basic personal amount, you can subtract the tax on this amount from the total income tax calculated.

Tax refunds

New Brunswick's personal income tax is administered and collected by the federal government through the Canada Revenue Agency (CRA). New Brunswick personal income tax rates and bracket structures are applied to federally-defined New Brunswick taxable income. The tax rates in New Brunswick range from 9.4% to 19.5% of income, and the combined federal and provincial tax rate is between 24.4% and 52.5%. The amount of tax your employer deducts from your paycheck varies based on where you fall inside the federal and New Brunswick tax brackets.

New Brunswick uses a progressive tax structure with four tax brackets. This means that you may be taxed at different rates depending on the amount of income you have earned in any given year. The tax brackets increase each year based on inflation. The tax brackets for 2023 are as follows:

• On the first $47,715
• Over $47,715 up to $95,431
• Over $95,431 up to $176,756
• On the portion over $176,756

The deadline to file your 2023 income tax return in 2024 is midnight on April 30. If you're self-employed, your tax return is due on June 17, 2024, since June 15 falls on a Saturday. It can take 2 to 3 weeks to receive a refund when you transmit your return via NETFILE. For mailed returns, refunds are mailed out in 4 to 6 weeks following receipt of the return by the CRA or the Revenu Quebec.

There are several tax credits available to residents of New Brunswick that can reduce the income tax you owe. These include:

• Low-Income Tax Reduction: A non-refundable tax credit for low-income individuals and families. For 2023, you are eligible for this credit if your income is less than $45,252 or your family income is less than $70,118.
• Seniors' Home Renovation Tax Credit: A refundable tax credit for seniors 65 years or older to help with the cost of making their homes safer and more accessible.
• Medical Expense Credit
• NB Political Contribution Tax Credit
• NB Small Business Investor Tax Credit

Frequently asked questions