Filing Your Return -> Federal and Provincial Age Amount Tax Credits
Age Amount Tax Credit Line 30100
Note: Before tax year 2019, line 30100 was line 301.
Income Tax Act s. 118(2)
The age amount tax credit is a non-refundable tax credit, claimed on line 30100 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 2021 is $7,713 ($7,898 for 2022).
The tax credit is calculated using the lowest tax rate (15% federally), so the maximum federal tax credit for 2021 is $1,157 ($1,185 for 2022).
Provincial Age Amounts
Each province except Quebec has an age amount tax credit which is calculated in the same manner as the federal age amount tax credit
See the tables of most non-refundable personal tax credits for applicable amounts for each province and territory except Quebec.
See Nova Scotia Age Amount for an additional tax credit for 2018 and later years.
See Quebec amounts subject to indexation for the applicable amounts for Quebec.
The Quebec tax credit calculation is similar to the federal calculation, but combines the credits for taxpayer and spouse in the same calculation, and uses family income in the calculation. The Quebec tax credit is calculated on Schedule B. The age amount, amount for a person living alone, and amount for retirement income are calculated on this form. The clawback for these combined tax credits is calculated based on family income. All or part of the net amount of the tax credit can be claimed on the spouse’s tax return.
Age Amount Clawback
The age amount is reduced (clawed back) by 15% of income (net income from line 23600 (line 236 prior to 2019) of your tax return) exceeding a threshold amount of $38,893 for 2021 ($39,826 for 2022), and is eliminated when income exceeds $90,313 for 2021 ($92,479 for 2022).
Each province has different thresholds for calculating the age amount clawback.
We'll do an example of the age amount tax credit calculation for someone earning in excess of the threshold amount, for the federal and Ontario tax credits. Keep in mind that the maximum tax credit for 2021 is $1,185 federally, $275 for Ontario.
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. This would happen automatically if using tax software.
Detailed Tax and RRSP Savings Calculator
The age amount tax credit and clawback are calculated by the Detailed Tax and RRSP Savings Calculator.
Capital Losses Carried Forward Don't Reduce Clawbacks
Note that an age amount clawback (as well as an OAS clawback) can be triggered by capital gains, even if the capital gains are offset by capital losses carried forward. This is because the age amount tax credit is based on line 23600 (line 236 prior to 2019) of the tax return, net income for tax purposes. Losses carried forward are deducted after this on the tax return. See our article on how to calculate Total Income For Tax Purposes, Net Income For Tax Purposes, and Taxable Income.
Taxpayer Death in Year of 65th Birthday
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.
Gain From Surrender of Property to Creditor
If an individual who is eligible for the age amount tax credit has income from a gain from a surrender 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.
Canada Revenue Agency (CRA) Resources
Tax Tip: Capital gains can increase the age amount clawback, even when capital losses carried forward completely eliminate the capital gains.
Revised: July 20, 2022
Copyright © 2002 Boat Harbour Investments Ltd. All Rights Reserved. See Reproduction of information from TaxTips.ca