Nova Scotia Families Begin Receiving Affordable Living Tax Credit
On July 1st, 2010 the province of Nova Scotia became home to the highest combined provincial and federal tax rate in the country. The Harmonized Sales Tax (HST) is administered by the federal government and applies to all goods and services with some exceptions. It combines the federal Goods and Services Tax (GST) of 5 percent and Nova Scotia’s value-added tax. The provincial portion has increased from 8 percent to 10 percent, bringing the HST to a total of 15 percent.
To compensate for this change, the government introduced the Nova Scotia Affordable Living Tax Credit (NSALTC) in the budget for families with low or modest incomes. The NSALTC is an ongoing non‑taxable quarterly payment, which will be issued to eligible recipients along with the federal GST/HST credit payments, starting in July 2010. The credit is intended to make life more affordable for Nova Scotian households with low or modest incomes by offsetting the increase in HST and provide additional income for these families.
“While we move toward getting our province back to balance, we are taking the necessary steps to keep life affordable for Nova Scotians,” said Finance Minister Graham Steele. “The Affordable Living Tax Credit will help put additional dollars in the pockets of lower and modest income families.”
The NSALTC will benefit 53 per cent of all Nova Scotia households. It is estimated that on average, even after the impact of the change in the HST, households with an income less than $30,000 will save $113/annually after the NSALTC. The amount issued depends on individual family size and the adjusted family net income. People must file their income tax return each year to be eligible.
In addition to the NSALTC, the Government of Nova Scotia is working to balance the impact of the HST restoration by offering other new rebates and credits including:
— Point-of-sale rebates on certain essential items including children’s clothing, footwear, and diapers, and feminine hygiene products
— A tax reduction for low-income seniors
— A tax credit for Nova Scotians living in poverty
Given that an increase in HST hits low and middle income groups harder than higher income earners, these measures protect the most vulnerable citizens. For those who spend a greater proportion of their income on food, clothing, and shelter, the additional money saved will be helpful.
Additional information on the NSALTC can be found here.