Navigating the tax landscape in the Northwest Territories (NWT) can be complex, but understanding the various non-refundable tax credits available at the provincial level can significantly reduce your tax liability. These credits, which include the Basic Personal Amount, Age Amount, and more, are designed to alleviate the tax burden for residents by lowering the amount of provincial tax owed. While they won’t generate a refund if they exceed your total tax payable, they can effectively decrease the taxes you owe, ensuring you maximize your financial benefits. This guide provides an overview of each non-refundable tax credit available in NWT, detailing what they are, who qualifies, how to claim them, and the necessary forms to apply.
1. Basic Personal Amount
The Basic Personal Amount is a non-refundable tax credit that allows individuals to reduce their taxable income by $15,564, effectively reducing the amount of tax owed. All residents of the Northwest Territories are eligible to claim this credit. It is automatically applied when filing your tax return using Form NWT428. No additional forms are required.
2. Spousal Amount
The Spousal Amount is a non-refundable tax credit for taxpayers supporting a spouse or common-law partner with a net income of less than $15,564. The amount is reduced by the spouse’s net income. This credit can be claimed on Form NWT428 when filing your tax return. There are no additional forms required.
3. Amount for an Eligible Dependent
The Amount for an Eligible Dependent allows taxpayers to claim $15,564 for a dependent who lives with them and relies on them for support, reducing by the dependent’s net income. Eligible dependents include children or relatives. This credit is claimed on Form NWT428 when filing your tax return.
4. Age Amount
The Age Amount is a non-refundable tax credit of $5,953 available to residents aged 65 and over, reduced by 15% of net income over $37,290. Seniors must complete Form NWT428 to claim this credit when filing their tax return.
5. Pension Income Amount
The Pension Income Amount allows taxpayers to claim a $1,000 credit for eligible pension income. This credit applies to residents who receive pension income and can be claimed on Form NWT428 when filing their tax return.
6. Disability Amount
The Disability Amount is a non-refundable tax credit of $8,870 for individuals with severe and prolonged impairments. To qualify, individuals must have a Disability Tax Credit Certificate (Form T2201) approved by the CRA. This amount is claimed on Form NWT428.
7. Disability Amount for Dependents (aged 18 and older)
This credit allows taxpayers to claim $8,870 for a dependent aged 18 or older with a disability, reduced by the dependent’s net income over $18,079. Eligibility requires an approved Form T2201. The amount is claimed on Form NWT428.
8. Caregiver Amount
The Caregiver Amount provides a $5,046 credit for individuals caring for a dependent with a physical or mental impairment. Eligibility requires the dependent to reside with the caregiver. This credit is claimed on Form NWT428.
9. Infirm Dependent Amount (under age 18)
The Infirm Dependent Amount allows taxpayers to claim $4,445 for each dependent under 18 with a physical or mental impairment. This credit requires Form T2201 approval and is claimed on Form NWT428.
10. Medical Expense Credit
The Medical Expense Credit allows taxpayers to claim eligible medical expenses exceeding 3% of net income or $2,479, whichever is less. This credit is claimed on Form NWT428 and requires detailed receipts of medical expenses.
11. Adoption Expense Credit
The Adoption Expense Credit offers up to $16,000 per child for eligible adoption expenses, including fees and travel costs. This credit is claimed on Form NWT428 and requires receipts for the adoption-related expenses.
12. Education and Textbook Amounts
The Education and Textbook Amounts provide credits of $400 per month for full-time students and $120 per month for part-time students. These credits are claimed on Form NWT428 and require confirmation of enrollment and eligible months.
13. Tuition Credit
The Tuition Credit allows students to claim the total amount of eligible tuition fees paid for post-secondary education. This credit is claimed on Form NWT428 and requires a T2202 certificate from the educational institution.
14. Volunteer Firefighter and Search and Rescue Volunteer Credit
This credit offers $3,000 to individuals who perform at least 200 hours of eligible volunteer services. Claim this credit on Form NWT428, and a written certification from the relevant organization may be required.
15. Home Accessibility Credit
The Home Accessibility Credit provides up to $10,000 for eligible home renovation expenses that improve accessibility for seniors or individuals with disabilities. Claim this credit on Form NWT428 with supporting receipts.
16. First-Time Home Buyers’ Amount
First-time home buyers can claim a $10,000 credit on qualifying homes. This credit is claimed on Form NWT428 and requires a statement of the home purchase.
17. Northern Residents Deduction
The Northern Residents Deduction includes a residency amount of $11 per day and travel benefits for those living in prescribed zones. This credit is claimed on Form T2222 and reported on Form NWT428.
18. Political Contributions Credit
This credit is based on political contributions made to registered parties or candidates, offering 75% of the first $400, 50% of the next $350, and 33.33% of the next $525. Claim this credit on Form NWT428 with receipts.
19. Canada Workers Benefit (CWB)
The Canada Workers Benefit (CWB) provides additional support for low-income workers, with specific amounts varying by income and family situation. This credit is claimed on Form NWT428 and may require additional forms depending on individual circumstances.
These credits are designed to reduce the overall tax liability for NWT residents, and it is crucial to consult with a tax professional or use tax software to ensure accurate claims.
