As many Canadians can attest, it’s not always what you earn that counts, it’s what you get to keep. This is especially true if you are currently retired or are planning to retire in the near future. To make the most of your retirement income, it makes sense to become familiar with the tax credits and benefits that are made available through the Canada Revenue Agency (CRA).
- Pension income splitting – If you receive a pension, you may be eligible to split up to 50% of your eligible pension income with your spouse or common-law partner.
- Guaranteed income supplement – If you receive the guaranteed income supplement or allowance benefits under the old age security program, you can renew your benefit by filing your return by the filing deadline.
- Registered retirement savings plan (RRSP) – Deductible RRSP contributions can reduce your tax bill. You have until December 31 of the year in which you turn 71 to contribute to your RRSP.
- Registered disability savings plan (RDSP) – This savings plan can help families save for the financial security of a person who is eligible for the disability tax credit. RDSP contributions are not tax deductible and can be made until the end of the year in which the beneficiary turns 59.
- Goods and services tax/harmonized sales tax (GST/HST) credit – You may be eligible for the GST/HST credit, a tax-free quarterly payment that helps your offset all or part of the GST or HST you pay. To receive this credit, you must file an income tax and benefit return every year, even if you did not receive income. If you have a spouse or common-law partner, only one of you can receive the credit. The credit will be paid to the person whose return is assessed first.
- Medical expenses – You may be able to claim the total eligible medical expenses you or your spouse or common-law partner paid for you, your spouse or common-law partner, or you or your spouse’s or common-law partner’s children who were born in 1999 or later, provided the expenses were made over any 12-month period ending in 2016 and were not previously claimed. This can include amounts claimed for attendant care or care in an establishment.
- Age amount – If you were 65 years of age or older on December 31, 2016, and your net income was less than $83,427, you may be able to claim up to $7,125.
- Pension income amount – You may be able to claim up to $2,000 if you reported eligible pension, superannuation, or annuity payments on your tax return.
- Disability amount – If you, your spouse or common-law partner or your dependent has a severe and prolonged impairment in physical or mental functions and meets certain conditions, they may be eligible for the disability tax credit (DTC). To determine eligibility, you must complete Form T2201, Disability Tax Credit Certificate and have it certified by a medical practitioner. Canadians claiming the credit can file online whether they have submitted the form to the CRA for that tax year or not.
- Family caregiver amount – If you are caring for a dependant with an impairment in physical or mental functions, you may be able to claim up to $2,121 when calculating certain non-refundable tax credits. Non-refundable tax credits reduce your federal tax. If the total of the non-refundable tax credits is more than your federal tax, you will not get a refund for the difference.
- Public transit amount – You may be able to claim the cost of monthly or annual public transit passes for travel within Canada on public transit in 2016.
For more information on topics and services of interest to seniors, visit Changes to your taxes when you retire or turn 65 years old.