On March 16th, 2017, Alberta Finance Minister Joe Ceci announced the 2017 Alberta Budget. The Budget does not include any changes to personal or corporate tax rates. It extends the province's political contributions tax credit for individuals and announces adjustments to the province's dividend tax credits on non-eligible dividends. Below is a summary of some of the tax measures that were included in the Budget.
Personal Income Taxes
Political Contributions Tax Credit
The existing political contributions tax credit is extended to apply to contributions made on or after January 1, 2017 to party leadership elections and candidate nomination races. The credit is calculated as 75% on the first $200 of donations, 50% on the next $900 and 33.33% on the next $1,200. The maximum credit is $1,000 on total contributions of $2,300.
Dividend Tax Credit
The dividend tax credit rate for non-eligible dividends for 2017 and subsequent years will be adjusted in response to changes to the federal corporate income tax rates, although specifics were not provided. The combined Alberta and Federal personal tax rates for 2017 are summarized below:
Alberta and Federal personal tax rates
*Subject to changes to the dividend tax credit
Investment Tax Credits
The Alberta Investor Tax Credit ("AITC") and the Capital Investment Tax Credit ("CITC") can be claimed starting in 2017. These credits were announced during the 2016 Alberta Budget.
The three-year AITC provides a 30% tax credit to investors who make equity investments in eligible Alberta businesses doing research, development or commercialization of new technology, new products or new processes. The AITC is also applicable to businesses engaged in interactive digital media development, video post-production, digital animation or tourism. Individuals may claim a refundable tax credit of up to $60,000 per year and for corporations, the AITC is non-refundable and there is no maximum limit on the credit that can be claimed.
The two-year CITC is available to corporations and provides a 10% non-refundable tax credit of up to $5 million for a corporation's eligible capital expenditures on manufacturing, processing and tourism infrastructure.
Corporate Income Taxes
There were no changes announced to the corporate income tax rates. Effective January 1, 2017, the small business income tax rate decreased from 3% to 2% (this was announced during the 2016 Alberta Budget). As of January 1, 2017 Alberta's corporate income tax rates remain as follows:
Alberta's corporate income tax rates
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