In the recent federal election there was much talk about lowering taxes for young couples and their families. Helping seniors ease their tax burden was largely left out of the discussion, so I’m here to remind you of a few tax credits that are exclusive to you this spring if you’re in the 65 and up club.
The age amount is a tax credit available to an individual who is 65 or older on December 31 and has a net income of less than $82,353 (2015). If your income is $35,466 or less, you can claim the full $7,033 which will result in a $1,054.95 non-refundable tax credit. If you can’t use the credit because your income is too low you can transfer the credit to your spouse. Also, don’t forget to claim the corresponding provincial tax credit on your return.
Pension income amount
If you were 65 or older on December 31 and received annuity payments for yourself or because of the death of your spouse or common-law partner, you can claim the pension income amount on your tax return. The tax credit of up to $2,000 is available if you receive income such as: • Payments from a Registered Retirement Income Fund • Foreign pension income, including U.S. Social Security that cannot be deducted on line 256 of your tax return • Elected split-pension income received from a spouse • Income from a Deferred Profit Sharing plan You can find a complete list of what income qualifies for the credit at age 65 on the CRA’s website.
Home Accessibility Tax Credit
In the 2015 Budget, the previous government announced a new tax credit called the Home Accessibility Tax Credit. This non-refundable tax credit, starting with the 2016tax return, is for “qualifying expenses incurred for work performed or goods acquired in respect of a qualifying renovation of an eligible dwelling of a qualifying individual.” If you are 65 or older on December 31 2016, you can claim up to $10,000 of eligible expenses on your tax return to receive at $1,500 credit. A person who qualifies for the disability tax credit is also eligible for this. You can find a list of everyone who can claim this tax credit and more information about the credit on the CRA’s website.
Ontario Healthy Homes Renovation Tax Credit
This provincial tax credit is a refundable tax credit available to individuals 65 or older and family members who live with them. You will receive a 15% tax credit on your tax return for eligible home improvements of up to $10,000. The addition of items such as ramps, stair lifts, walk-in bathtubs, and hand rails in corridors would qualify for the credit. You can find more information about this credit on the Ministry of Ontario’s website.
Ontario Senior Homeowners’ Property Tax Grant
The Ontario Senior Homeowners’ Property Tax Grant is available if you meet the following criteria: • “You or your spouse/common-law partner paid Ontario property tax in the previous year • you meet the income requirements; • as of December 31 of the previous year, you: were 64 years of age or older were a resident of Ontario owned and occupied your principal residence (or your spouse/common-law partner did).” You can receive a maximum of $500 depending on your previous year’s adjusted family net income. For singles, the threshold is $35,000 or less and for couples it is $45,000 or less. If you are single and earned $50,000 or more, you will not be eligible for the credit. A couple who earns $60,000 or more will not qualify. Ontario’s Ministry of Finance has more information about the credit.
These are some basic ways you can save on taxes this year, but for a really thorough assessment of your deduction capabilities, there’s no substitute for speaking with a certified tax professional.
Marcy Ages is a passionate, detail-driven provider of financial planning services, including investment management and tax preparation. As founder of The Care Network, Marcy also works with other service professionals to support high-net-worth individuals with their estate planning and assisted living issues.
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