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Filing Your Return -> Federal and provincial age amount tax creditsLine 301 Age Amount Tax CreditIncome Tax Act s. 118(2)The age amount tax credit is a non-refundable tax credit, claimed on line 301 of the personal income tax return. This tax credit is available to individuals who are, at the end of the taxation year, aged 65 or older. The federal age amount for 2011 is $6,537 ($6,720 for 2012). This amount is reduced by 15% of income exceeding a threshold amount of $32,961 for 2011 ($33,884 for 2012), and is eliminated when income exceeds $76,541 for 2011 ($78,684 for 2012). The tax credit is calculated using the lowest tax rate (15% for 2011 & 2012), so the maximum federal tax credit for 2011 will be $981 ($1,008 for 2012). Each province except Québec has an age amount tax credit which is calculated in the same manner. The Québec tax credit calculation is similar, but combines the credits for taxpayer and spouse in the same calculation, and uses family income in the calculation. See the tables of most non-refundable personal tax credits for applicable amounts for each province and territory, and see Québec amounts subject to indexation for the applicable amounts for Québec. We'll do an example of the age amount tax credit calculation for someone earning in excess of the threshold amount, and assume that in 2012 their income increases by 2.8%, which is the indexation amount used to calculate federal tax credits for 2012:
If the individual claiming this credit cannot utilize the entire amount before reducing taxes to zero, the unclaimed amount can be transferred to the spouse. This is done by completing Schedule 2 of the tax return. | |||||||||||||||||||||||||||||||||||||||||||||||||
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If an individual dies before their birthday in the tax year in which they would have turned 65, no age amount tax credit can be claimed on their behalf. If an individual who is eligible for the age amount tax credit has income from a gain from a disposition of property to a creditor regarding settlement of debt on certain foreclosures, repossessions and similar transactions (Income Tax Act s. 79), then that income is excluded from net income for tax purposes in the age amount calculation. This is complicated, so a tax professional should be consulted. For more information, see the Canada Revenue Agency (CRA) Age Amount Tax Credit page.
Revised: February 18, 2012 |