Southern Alberta Council on Public Affairs (SACPA)

Hutterites are taxed under section 143 of the Income Tax Act. Colonies are taxed as if they were a trust so the collective income of the community gets allocated to colony members who are 18 years of age and older Section 143 does not allow Hutterite colonies to allocate income to community members under the age of 18 while other farmers are allowed to do so. For example, a regular farmer can pay his child who is under the age of 18 up to $ 10,000 tax free, while Hutterites cannot. This is a arguably a disadvantage for Hutterite communities where both male and female young people usually join the colony workforce at age 15. It wasn’t until 1997 that colonies were allowed to allocate income to their spouses while other farmers have had that ability for many years.  Nor do they collect premiums from the Canada Pension Plan or receive social assistance. The income allotted to individuals gets reported on personal income tax returns and colony members pay taxes at the applicable personal tax rates.   Hutterites