Insurance Tax In New Brunswick

New Brunswick has a range of taxes, including income tax, corporation tax, and insurance premium tax. The income tax rates in New Brunswick range from 9.4% to 19.5% of income, with the combined federal and provincial tax rate being between 24.4% and 52.5%tax credits and deductions, such as the NB child tax benefit, NB harmonized sales tax credit, and NB low-income tax reduction. The corporation tax in New Brunswick has a lower rate of 2.5% and a higher rate of 14%. The insurance premium tax is applied at a rate of 2% to life insurance, accident insurance, and sickness insurance, and a rate of 3% to other contracts of insurance.

New Brunswick's marginal tax rate

New Brunswick's personal income tax is administered and collected by the federal government through the Canada Revenue Agency (CRA). The CRA advises that taxpayers should keep tax records and supporting documents for six years.

The New Brunswick tax rate increases as your taxable income increases. The tax rate on the first $47,715 of your income is 9.40%. Plus 14% on the next $47,716. Plus 16% on the next $81,325. Plus 19.50% on the income over $176,756.

The Federal and New Brunswick tax brackets and personal tax credit amounts are increased for 2024 by an indexation factor of 1.047 (a 4.7% increase).

New Brunswick also has a corporation income tax, with a lower rate of 2.5% and a higher rate of 14%. The lower rate applies to the first $500,000 of income.

Provincial corporation tax

The Province of New Brunswick levies a corporation tax on businesses operating within its jurisdiction. The New Brunswick corporation tax has a lower rate of 2.5% and a higher rate of 14%. The lower rate is applicable to small businesses with income up to the New Brunswick business limit of $500,000. Notably, this business limit calculation is not subject to the federal passive income business limit reduction, meaning that eligible small businesses can benefit from the lower tax rate regardless of their passive income.

The higher rate of 14% is applied to all corporate income that exceeds the $500,000 threshold or does not qualify for the lower rate. To calculate the tax, businesses can use Schedule 366, New Brunswick Corporation Tax Calculation, although it is not mandatory to file this with the tax return. On line 225 of Schedule 5, Tax Calculation Supplementary – Corporations, the calculated tax amount should be entered.

New Brunswick also offers various tax credits to corporations, including the research and development tax credit and the small business investor tax credit. These credits can be claimed to reduce the overall tax liability for businesses in the province.

For individuals, New Brunswick's personal income tax is administered and collected by the federal government through the Canada Revenue Agency. The province has its own income tax rates and bracket structure, which are applied to federally-defined New Brunswick taxable income. Additionally, New Brunswick offers various personal non-refundable tax credits, such as the NB Low-Income Tax Reduction, NB Political Contribution Tax Credit, and NB Labor-Sponsored Venture Capital Tax Credit.

Provincial tax credits

New Brunswick has a progressive tax structure with four tax brackets. The tax brackets increase annually based on inflation. The province uses Form NB428 to calculate its tax and non-refundable tax credits.

New Brunswick's provincial tax credits include:

• Low-income tax reduction: A non-refundable tax credit that helps reduce the provincial tax payable for NB residents with low incomes.
• Seniors' home renovation tax credit: A refundable tax credit for seniors aged 65 and above in New Brunswick or their family members. It helps cover the cost of making their homes safer and more accessible. Eligible residents can claim up to $10,000 worth of eligible home improvements on their tax return and receive 10% of the claimed expenses.
• Research and development tax credit: A credit offered to corporations in New Brunswick.
• Small business investor tax credit: Another credit available to corporations in the province.

Personal income tax

The personal income tax in New Brunswick is administered and collected by the federal government through the Canada Revenue Agency (CRA). The personal income levels used to calculate the tax have changed for 2023. The CRA will use the information from your return to calculate the payments you are entitled to receive from certain programs.

The main form you need to complete your taxes is the Income Tax and Benefit Return. You can also use Form NB428 – New Brunswick Tax and Credits to calculate your provincial taxes and credits to report on your return.

The CRA will use the information from your return to determine if you are entitled to receive certain credits, such as the GST/HST credit or the New Brunswick harmonized sales tax credit (NBHSTC). The NBHSTC is a non-taxable amount paid to help offset the increase in the harmonized sales tax for households with low and modest incomes.

If you are a resident of New Brunswick with dependent children, you may also be eligible for the New Brunswick Child Tax Benefit and the New Brunswick Working Income Supplement. The Child Tax Benefit is a non-taxable amount paid monthly to qualifying families with children under 18 years of age. The Working Income Supplement is an additional amount paid to qualifying families that earned income and have children under 18 years of age. These benefits are combined with the Canada Child Benefit into one monthly payment.

The New Brunswick school supplement program is also available to help low-income families with the cost of back-to-school supplies for their children. This once-a-year payment is included with the July Child Tax Benefit payment.

There are also various non-refundable tax credits available to eligible tax filers in New Brunswick, including:

• Basic Personal Amount
• Spouse or Common Law Amount
• Amount for Eligible Dependant
• Amount for Infirmed Dependants Age 18 or Older
• Canada Pension Plan Contributions
• Employment Insurance Premiums
• Pension Income Amount
• Disability Supplement Amount
• Interest Paid on Student Loans
• Tuition and Education Amounts
• Amount Transferred from Spouse or Common Law Partner
• Medical Expense Credit
• Overseas Employment Tax Credit
• NB Low-Income Tax Reduction
• NB Political Contribution Tax Credit
• NB Labor-Sponsored Venture Capital Tax Credit
• NB Small Business Investor Tax Credit

The income tax rates in New Brunswick range from 9.68% to 20.3% on taxable income, with the specific rate depending on the income level.

Insurance Premium Tax

New Brunswick levies an Insurance Premium Tax on insurance companies based on their gross premiums, excluding dividends paid or credited to policyholders. The current Insurance Premium Tax rates are 2% for life insurance, accident insurance, and sickness insurance, and 3% for all other types of insurance contracts, excluding marine insurance.

The Insurance Premium Tax is collected by the Insurance Division of the New Brunswick Financial and Consumer Services Commission (FCNB) on behalf of the Minister of Finance and Treasury Board. The tax rates for life insurance, accident insurance, sickness insurance, and other classes of insurance are stipulated under the Premium Tax Act.

Insurance companies operating in New Brunswick must comply with the Premium Tax Act and pay the applicable tax rates on their gross premiums, after accounting for any dividends paid or credited to their policyholders.

Frequently asked questions