Finance

Temporary Deficit Reduction Levy

The Temporary Deficit Reduction Levy (the levy) came into effect on July 1, 2016. The levy is temporary and will be in place until the end of the 2019 taxation year.

The levy will be paid by residents of Newfoundland and Labrador through the personal income tax system. The amount of the levy, depending on an individual's taxable income, is shown in the table below. Amounts for 2016 will be ½ of the full year amounts because of the July 1, 2016 implementation date.

If you are a resident of Newfoundland and Labrador at the end of the current taxation year and your taxable income (line 260 of your personal income tax return) is more than $50,000, you have to pay the levy.

Individuals with taxable income of $50,000 or less are exempt from the levy.

How will the levy be collected?

The levy will be deducted from pay and pensions of those with employment income or pension income of more than $50,000 a year, as part of federal and Newfoundland and Labrador income tax. To ensure that employers do not incur added costs to change their payroll systems, the levy will be included on pay stubs as a component of the provincial income tax withheld.

The Canada Revenue Agency has updated their payroll deductions tables for Newfoundland and Labrador effective July 1, 2016 to include the additional withholdings required for both the income tax rate increases and the levy. For further information please contact the Canada Revenue Agency at 1-800-959-5525. Additional information can also be found at this link http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/tbls-eng.html. External Link

Individuals who do not have taxes deducted at source or make instalment payments will pay the levy when they file their personal income tax return.

Self-employed individuals who remit tax by instalments must include an estimated amount for the levy as they do for income tax. Instalment interest may be charged if these instalment payments are insufficient.

Seniors who receive pension income of more than $50,000 a year will have the levy deducted at source along with other taxes. Seniors who receive income from other sources that are not subject to tax withholdings may wish to request an increase in the amount of tax withheld from their pensions by designating an additional amount on form TD1NL (http://www.cra-arc.gc.ca/E/pbg/tf/td1nl/td1nl-16e.pdf). External Link

Alternatively, seniors may choose to have income tax withheld from Old Age Security (OAS) and Canada Pension Plan (CPP) benefits by completing and sending form ISP3520 (Request for Income Tax Deductions) to Service Canada.

Is the Levy based on combined family income?
No. The levy is based on individual taxable income. Regardless of whether someone is married, divorced, separated or single, the levy is charged only on the basis of one's own taxable income.

For example, a married couple where each spouse had taxable income of $60,000 a year pays the levy based on individual taxable income of $60,000 each, as opposed to a family levy based on their combined taxable income of $120,000.

Temporary Deficit Reduction Levy Amounts
(Based on Individual Taxable Income)


Individual Taxable Income Base +10% Temporary Deficit Reduction Levy Amount
< or = $50,000 < or = $50,000 N/A N/A $ 0
> $50,000 to
< or = $51,000
$ 50,250 $ 0 $ 25 $ 25
$ 50,500 $ 0 $ 50 $ 50
$ 50,750 $ 0 $ 75 $ 75
> $51,000 to < or = $55,000 $100
> $55,000 to
< or = $56,000
$55,250 $100 $ 25 $125
$55,500 $100 $ 50 $150
$55,750 $100 $ 75 $175
> $56,000 to < or = $60,000 $200
> $60,000 to
< or = $61,000
$ 60,250 $200 $ 25 $225
$ 60,500 $200 $ 50 $250
$ 60,750 $200 $ 75 $275
> $61,000 to < or = $65,000 $300
> $65,000 to
< or = $66,000
$ 65,250 $300 $ 25 $325
$ 65,500 $300 $ 50 $350
$ 65,750 $300 $ 75 $375
> $66,000 to < or = $70,000 $400
> $70,000 to
< or = $71,000
$ 70,250 $400 $ 25 $425
$ 70,500 $400 $ 50 $450
$ 70,750 $400 $ 75 $475
> $71,000 to < or = $75,000 $500
> $75,000 to
< or = $76,000
$ 75,250 $500 $ 25 $525
$ 75,500 $500 $ 50 $550
$ 75,750 $500 $ 75 $575
> $76,000 to < or = $80,000 $600
> $80,000 to
< or = $81,000
$ 80,250 $600 $ 25 $625
$ 80,500 $600 $ 50 $650
$ 80,750 $600 $ 75 $675
> $81,000 to < or = $100,000 $700
> $100,000 to
< or = $101,000
$100,250 $700 $ 25 $725
$100,500 $700 $ 50 $750
$100,750 $700 $ 75 $775
> $101,000 to < or = $125,000 $800
> $125,000 to
< or = $126,000
$125,250 $800 $ 25 $825
$125,500 $800 $ 50 $850
$125,750 $800 $ 75 $875
> $126,000 to < or = $175,000 $900
> $175,000 to
< or = $176,000
$175,250 $900 $ 25 $925
$175,500 $900 $ 50 $950
$175,750 $900 $ 75 $975
> $176,000 to < or = $250,000 $1,000
> $250,000 to
< or = $251,000
$250,250 $1,000 $ 25 $1,025
$250,500 $1,000 $ 50 $1,050
$250,750 $1,000 $ 75 $1,075
> $251,000 to < or = $300,000 $1,100
> $300,000 to
< or = $301,000
$300,250 $1,100 $ 25 $1,125
$300,500 $1,100 $ 50 $1,150
$300,750 $1,100 $ 75 $1,175
> $301,000 to < or = $350,000 $1,200
> $350,000 to
< or = $351,000
$350,250 $1,200 $ 25 $1,225
$350,500 $1,200 $ 50 $1,250
$350,750 $1,200 $ 75 $1,275
> $351,000 to < or = $400,000 $1,300
> $400,000 to
< or = $401,000
$400,250 $1,300 $ 25 $1,325
$400,500 $1,300 $ 50 $1,350
$400,750 $1,300 $ 75 $1,375
> $401,000 to < or = $450,000 $1,400
> $450,000 to
< or = $451,000
$450,250 $1,400 $ 25 $1,425
$450,500 $1,400 $ 50 $1,450
$450,750 $1,400 $ 75 $1,475
> $451,000 to < or = $500,000 $1,500
> $500,000 to
< or = $501,000
$500,250 $1,500 $ 25 $1,525
$500,500 $1,500 $ 50 $1,550
$500,750 $1,500 $ 75 $1,575
> $501,000 to < or = $550,000 $1,600
> $550,000 to
< or = $551,000
$550,250 $1,600 $ 25 $1,625
$550,500 $1,600 $ 50 $1,650
$550,750 $1,600 $ 75 $1,675
> $551,000 to < or = $600,000 $1,700
> $600,000 to
< or = $601,000
$600,250 $1,700 $ 25 $1,725
$600,500 $1,700 $ 50 $1,750
$600,750 $1,700 $ 75 $1,775
> $601,000 $1,800

For more information please contact the Fiscal and Economic Policy Branch.

 
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