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Alberta 2008 Budget

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Alberta -> Alberta 2008 Budget

Alberta 2008 Budget - April 22, 2008

See the Alberta government Provincial Budget web site for all details.

Personal taxes and premiums

Alberta health care insurance premiums will be eliminated on January 1, 2009.

Benefits under the Alberta Family Employment Tax Credit will be increased by 10% effective July 1, 2008, and more families will be eligible for this credit.

The following non-refundable tax credit amounts were increased by $5,000 each ($500 increase in the actual tax credit) for 2008 as per the Alberta 2008 budget:

bulletdisability amount
bulletdisability amount supplement
bulletcaregiver amount
bulletinfirm dependent amount

Income threshold amounts are also increased, by $5,000 each for the caregiver credit and the infirm dependent credit.

The tables of non-refundable tax credits reflect the increased amounts.

 

Students

Alberta is reducing the interest rate payable on Alberta student loans from Prime + 2.5% to Prime.

Tuition fee increases will continue to be limited to the rate of inflation in Budget 2008.

 

Businesses

The small business threshold for the 3% small business tax rate will increase from $460,000 to $500,000 effective April 1, 2009.

A new 10% provincial credit for scientific research and experimental development will take effect January 1, 2009.

Alberta's small business threshold is higher than that of the federal government.  This means that some dividends are eligible for the enhanced dividend tax credit when the income to produce them has been taxed at the small business rate provincially.  The result is that the effective personal tax rate is only 3%.  Alberta plans to bring in changes which would increase the effective rate to 10%.  Further details will be available when legislation is introduced.

 

Dividend tax credit (DTC) rates

On the Alberta Dividend Tax Credit page we have added a table showing the revised combined federal/Alberta marginal tax rates for eligible dividends after the federal reduction of the dividend gross-up, and the changes in the federal dividend tax credit rate.

 

Federal tax changes

Federal budget 2008 income tax measures affecting taxable income and certain tax credits that automatically affect provincial taxes in all provinces and territories except Québec:

bulletnew Tax-Free Savings Accounts (TFSA)
bulletchanges to RESPs
bulletreduction of gross-up amount for dividends eligible for the enhanced dividend tax credit (see above).
bulletincrease in maximum Northern Residents deduction beginning in 2008
bulletcapital cost allowance changes
bulletexpansion of list of expenses eligible for medical expense tax credit, effective 2008

 

Revised: September 19, 2017

 

 

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