Islanders benefit from personal income tax changes

Changes to personal income tax rates that took effect January 1, 2026, will help Islanders keep an estimated $20 million more of their money this calendar year.

Some of the tax changes that came into effect include increases to the following:  

• basic personal amount up from $14,250 to $15,000 
• spousal and equivalent amount up from $12,103 to $12,740
• income threshold for the low-income tax reduction up from $22,250 to $23,000 

“We've listened to Islanders and have consistently worked towards reducing provincial income taxes so they can keep more of their own money and choose where they spend it. This is the eighth consecutive annual increase to income tax thresholds. The basic personal amount has increased nearly 64 per cent and the age amount for seniors has increased by 73 per cent since 2019. These tax changes are meaningful actions to help increase affordability for people.” 

- Finance Minister Jill Burridge

Compared to 2025, a family of two adults and two children with a combined income of $140,000 will save an additional $141 on their 2026 tax return. This same family will save an extra $1,910 in 2026 compared to their 2019 tax return.  

These changes were announced in the 2025-26 provincial operating budget with amendments to the Income Tax Act approved by the Legislative Assembly of PEI during the 2025 fall sitting. 

For more information visit Provincial Personal Income Tax.

Media contact:
Janice Fogarty
Department of Finance
jefogarty@gov.pe.ca