If you are a Canadian senior enjoying your retirement on the sandy beaches of a Greek island, in the bustling embrace of London or anywhere else outside of Canada, you may be wondering if you need to file a tax return. The answer varies based on where you live, which type of income you earn and your income level.

High-Income Pensioners

The Canada Revenue Agency requires high-income seniors to repay a portion of their Old Age Security (OAS) payments through a recovery tax or clawback. This 15-percent tax applies to your net world income over a certain threshold and the threshold changes annually.

Net World Income

Your gross world income includes your OAS payments, as well as:

Your deductions are subtracted from the sum of these items to create your net world income. To determine your net world income and how much recovery tax you owe, you need to file an Old Age Security Return of Income (OASRI) form.

Recovery Tax

If you receive OAS payments, you will receive a T4A(OAS) – Statement of Old Age Security or an NR4 – Statement of Amounts Paid or Credited to Non-Residents of Canada slip at the end of the year.

This slip includes information on:

  • your pension payments
  • income tax deducted
  • recovered overpayments
  • basic demographic information

This information, along with the calculation of your world income, determines if a clawback is necessary. To avoid an interruption of your OAS benefits, be sure to file this form even if your world income is below the threshold.

Tax Treaty Countries

Over 100 countries share tax treaties with Canada. If you reside in one of these countries and receive OAS payments, you do not have to file an OASRI. However, if you have a business in Canada or if you have earned money from selling property in Canada, you may have to file a tax return addressing those incomes.

You must file your taxes by the same due dates as residents of Canada –  April 30 of the year following the year when you earned your income. However, if you are filing a tax return with business or self-employed income rather, you have until June 15 to file but all balances due must still be remitted by April 30.

Resources:

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