Tax Tips for Seniors

The current market volatility related to the COVID-19 pandemic and the oil “price war” is grabbing almost all of the financial headlines right now, but it’s important to remember that the tax deadline (while extended) is just around the corner.

Some seniors find tax season more challenging when they are no longer working and keeping up with the latest tax code changes and benefit programs. To help retirees claim all of the benefits and credits that they’re entitled to, here’s some tips that were put together by the CRA:

Canada Caregiver Credit – Recently replacing three older programs, this non-refundable tax credit is available to those who support a spouse, common-law partner or dependant with a physical or mental impairment. You may require a signed statement from a medical practitioner to qualify and if you do, you may be able to claim as much as $7,140 on your tax return.

Disability Tax Credit – There are multiple ways to qualify for eligibility for the DTC but all require the impairment to be prolonged and present all or almost all the time. If you qualify for the credit, you might be able to claim the disability amount of $8,416 on line 31600 of your tax return.

GST/HST Credit – The GST/HST credit is a tax-free quarterly payment that helps individuals and families with low and modest incomes offset all or part of the GST or HST that they pay. The CRA will automatically confirm eligibility for you when you file your tax return so even if you have no income to report, it’s worth filing on time each year.

For those that do owe tax in 2019, you may be able to deduct the following allowable expenses:

Age Amount – For those over age 65 with net income less than $87,750, you can claim an “age amount” that will help offset taxes owed. Those with $37,790 or less of net income can claim $7,494 on their return and those in between the two values use a chart on their return to calculate their claim. This amount is in addition to the Provincial tax credit that you’re also entitled to.

Pension Income Amount – You may also be entitled to claim up to $2,000 if you reported qualifying “pension or annuity income”. Qualifying income includes payments from pensions, RRIFs, annuities and even some foreign pensions. You can also potentially qualify with retirement income splitting payments from your spouse.

Medical Expenses – Eligible medical expenses can also be claimed if they were paid for during the year including those expenses paid for outside of Canada. There are 134 listed expenses on the CRA’s website and many that people aren’t aware of including air filters, computer equipment or even a new furnace in some situations.

Home Accessibility – Much like the medical expenses discussed above, there are many home accessibility expenses that people are paying for but unaware they can deduct. A maximum of $10,000 per year in eligible expenses can be claimed for a qualifying individual and home.

In addition to all of the above, there are many provincial tax credits and deductions that seniors may qualify for. A little bit of extra research online by yourself or a tech-savvy grandchild might go a long way in cutting down your tax bill.

Whatever you do, don’t miss the deadline to file your taxes! Even if you owe money and can’t afford to pay right now, filing on time will leave you in a better position than not.