Saskatchewan residents will see an additional $9.4 million in annual tax savings as a result of the indexation of the provincial income tax system in 2011.
Indexation protects taxpayers from "bracket creep," or the automatic increase in tax caused by inflation and preserves the real value of personal income tax credits. For 2011, income tax brackets and personal tax credit amounts will increase by 1.4 per cent, which represents the annual average inflation rate from October 2009 through to September 2010.
"Making sure Saskatchewan's income tax system is fully indexed to inflation each and every year is part of the government's commitment to keeping provincial taxes as low as possible," Finance Minister Ken Krawetz said.
In 2008, the provincial government introduced significant income tax reductions and low-income tax credit enhancements that lowered taxes for all Saskatchewan taxpayers. In addition, Saskatchewan introduced the Active Families Benefit in 2009 as a refundable income tax credit to rebate up to $150 per child for cultural, recreational and sports activity fees for children aged six to 14.
When combined with indexation, a single person with $25,000 annual income will pay $641 less in income tax in 2011 than in 2007. A family of four with $50,000 combined income will pay $2,125 less in 2011 compared to 2007 while a family of four with $75,000 combined income will pay $ 1909 less.The income tax brackets, basic and spousal credits, senior supplement, dependent child credit, age credit, disability-related credits, medical expense credit and the Saskatchewan Low-Income Tax Credit are all subject to indexation.
