Complete Tax Guide for Seniors

Complete Tax Guide for Seniors

April 22, 2020

Image of seniors

So many things change when you turn 65! After the party, it’s a good idea to consult a tax guide for seniors. There are tax benefits and credits only for seniors, so get access to every program CRA has for you.

These are some of the most common claims as a general tax guide for seniors:

Pension income splitting

Split up to half of your eligible pensions with your spouse or common-law partner. This income splitting reduces the tax you pay if they are in a lower tax bracket than you are.

RRSP contribution deductions

Deductible RRSP contributions reduce your tax, too. Contribute to your RRSP until December 31st of the year you turn 71. Your partner’s RRSP works the same way until they turn 71.

Medical expenses

Claim eligible medical expenses for both you and your spouse or common-law partner if they exceed 3% of your income. Some expenses are obvious, like prescriptions. But obscure medical expenses count, too. Air conditioning units, bathroom aids, even book page-turning devices. Check to see which expenses are eligible, and always keep your receipts!

Age amount

Once you turn 65 years of age, every year, you may claim the age amount on your return. Line 30100 (previously line 301) allows you to claim $7,494 if your net income (line 23600) is less than $37,790. If your income is more than $37,790, but under $87,750, CloudTax will automatically help you calculate the amount of your age amount claim, so you don’t have any manual calculations!

There is also a corresponding tax credit from the provinces and territories, so be sure to claim that, too.

Disability Tax Credit (DTC)

Severe, prolonged impairments in physical or mental functions make all Canadians eligible for the DTC or disability tax credit, regardless of age. If your dependant, common-law partner or spouse has a severe, prolonged impairment, they can transfer the DTC amount to you.

Canada Caregiver Credit (CCC)

If you support a dependant, spouse or common-law partner with an impairment, the CCC non-refundable tax credit amount is available.

Pension income amount

When you stop working, and your income comes from a pension, like CPP or a private pension. You might be able to claim up to $2,000 if you reported eligible pension, superannuation, annuity or RRSP payments on your return.

Guaranteed Income Supplement (GIS)

The GIS or Guaranteed income supplement is a monthly, non-taxable benefit paid to low-income OAS pension recipients, who live in Canada. File your tax return by April 30 to renew your benefits every year.

GST/HST credit

The GST/HST credit is available for all low to modest income Canadians to help offset all the GST or HST they pay. When you use CloudTax, your eligibility is automatically determined, and your quarterly payments come directly from the CRA.

Registered Disability Savings Plan (RDSP)

This savings plan helps the long-term financial security of Canadians eligible for the DTC (disability tax credit).

Climate Action Incentive payment

If you live in New Brunswick, Ontario, Manitoba or Saskatchewan, the Climate Action Incentive payment reduces your taxes. That may mean a lower tax bill, a refund or a bigger refund, depending on the rest of your taxes. An extra 10% supplement goes to residents of small, rural communities.

Home Accessibility Tax Credit (HATC)

If you are over 65 and changed to your home for an improvement in your quality of life, the Home Accessibility Tax Credit may apply. This non- refundable tax credit reduces your tax owing but won’t give you a refund. You claim your home improvement expenses up to $10,000. Then, 15% of that amount is your credit. So, if you spent $10,000, your tax credit is $1,500. Relatives can apply for the credit, too.

Eligible expenses:

  • Ergonomic door locks
  • Hands-free taps
  • Motion-sensor lights
  • Non-slip bathroom floors
  • Walk-in tubs
  • Wheel-in showers
  • Wheelchair ramps
  • Widening doors

So, this tax guide for seniors gives you an idea of the tax benefits and credits you can access now. CloudTax makes sure you find all your deductions and pay as little tax as possible.

Nimalan Balachandran is the Founder & CEO of CloudTax, an income tax filing platform, certified by the Canada Revenue Agency, that allows simple tax filers to file their taxes from home. He was a former employee at the Canada Revenue Agency, and has been in the tax preparation industry for over 10 years. His goal was to bring his passion for technology and assisting Canadians in minimizing their taxes together, by building new software that allows Canadian residents to file simple taxes on their own. Along with his background in accounting, finance, artificial intelligence & business strategy from Seneca College and Massachusetts Institute of Technology, Nimalan has also worked as a Financial Advisor at Sun Life Financials. Nimalan also co-founded a not-for-profit organization, ATI Foundation, serving individuals with intellectual and physical disabilities in the Greater Toronto Area.


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