Tax Tip Thursday

Tax Tips for Seniors

Most of the seniors I have met seem to be totally plugged into all the credits and benefits available to them, but in case you are not…

Here are several tax credits that are specifically geared to seniors, disabled persons, or their respective families (in some cases):

  1. Canada Caregiver Credit
    • This is a credit that a family member can receive if they are supporting/caring for someone disabled
    • You could have a claim as high as $7,250 depending on your income!
  2. Disability Tax Credit
    • This is a credit that you could be entitled to if you are disabled
    • It can also be transferred to someone in your family depending on the circumstances
    • It could be as high as $8,600!
  3. Medical Expense Tax Credit
    • There are a ton of medical expenses that you can claim
    • You are limited in that they must be higher than 3% of your net income before you even get a claim
    • The spouse with the lower net income can claim this as it is more tax efficient
  4. Home Accessibility Tax Credit
    • You can claim up to $10,000 for expenses incurred to:
      • Allow the qualifying individual to gain access to or to be mobile or functional within the dwelling
      • Reduce the risk of harm to the qualifying individual within the dwelling or in gaining access to the dwelling
    • You can even claim for the materials, permits, building plans and rental equipment if you do the job yourself
  5. Age Credit
    • This is as it sounds and is purely a function of your age!
    • Up to $7,600 in credits are available if you are 65 or older
    • The amount is also a function of your income; at $38,000 or more it starts decreasing
  6. Pension Income Credit
    • Pretty much anyone with a pension receives this $2,000 credit

Important Note

All of the above tax credits are called non-refundable tax credits. That means they will not derive an actual tax refund to you and will instead serve to offset some of the tax you might have had to pay without those credits. You only receive a portion of those actual amounts (15%), but the net effect is a direct offset to your taxes payable. So the long and the short of it is they can drive your tax payable down to zero, but you will never receive a refund as a result of them specifically.

HOWEVER, if you did pay income tax through the year and your tax payable did get down to zero, then the tax you paid would be refundable.

Sound complicated? I can help you with that. Give us a call or set up an appointment!

Disclaimer:

This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal or tax advice nor can it or should it be relied upon. All tax situations are specific to each individual. If you have specific tax questions you should book an appointment for a 1 on 1 consultation.