Canadian seniors over a certain age and under a certain income qualify for the age amount. This non-refundable tax credit can help to reduce the tax you owe, but it cannot earn you a refund. However, you may be able to transfer it to your spouse. Find out how to use the age amount to optimize your tax return.
Qualifying for the Age Amount
To claim the age amount, you must turn 65 by the last day of the tax year for which you are filing.
To qualify, your net income must be less than $89,422, and the amount you may claim varies depending on your income.
If you have declared bankruptcy in the previous year or if you ceased being a resident of Canada for income tax purposes, you are not entitled to this amount.
Calculating Your Age Amount
- If your income is $38,508 or less, the Canada Revenue Agency allows you to claim $7,637 as an age amount.
- If your income is more than $38,508 but less than $89,422 you can calculate your age amount using the formula for line 30100 on the federal tax worksheet.
- Subtract $38,508 from your income, and multiply the difference by 15 percent.
- Then, subtract that number from the maximum claim amount to calculate your amount.
For example, if your net income from line 23400 of your income tax return is $70,000, the difference between that number and $38,508 is $31,492. Fifteen percent of that figure ($33,024 x 0.15) is $4,723.80. When you subtract that figure from the maximum claim of $7,637, the result is $2,913.20.
Filing Your Taxes
To claim the age amount, note your age in the Information “About You” section on the first page of your tax return.
If you qualify for the maximum claim amount, enter it on line 30100. If you do not qualify for the maximum amount, use the figure from the formula explained above.
Claim the corresponding provincial or territorial credits on line 5808 of your provincial or territorial tax return as well (428 Form).
Transferring Your Age Amount
If qualify for an age amount but you do not need it, you can transfer all or part of it to your spouse or common-law partner.
For example, if you qualify for the maximum old age amount of $7,637 but you only owe $2,000 in taxes, you cannot claim a refund for the unused age amount, making it essentially worthless to you.
However, you can transfer it to your partner. If your spouse or common-law partner is facing a large tax bill, the transferred amount can help offset his tax bill.
To claim the transferred amount, your spouse or common-law partner should add it to any other transferred amounts they are receiving, and they should enter the total on line 32600 of their federal income tax return. To accept the transfer, your spouse or common-law partner doesn’t need to meet any age or income criteria.