Filing Your Return -> Federal and Provincial Age Amount Tax Credits
Line 301 Age Amount Tax Credit
Income 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 2018 is $7,333 (2017 is $7,225). This amount is reduced by 15% of income (net income from line 236 of your tax return) exceeding a threshold amount of $36,976 for 2018 ($36,430 for 2017), and is eliminated when income exceeds $85,863 for 2018 ($84,597 for 2017).
The tax credit is calculated using the lowest tax rate (15%), so the maximum federal tax credit for 2018 is $1,100 ($1,084 for 2017).
Each province except Quebec has an age amount tax credit which is calculated in the same manner. The Quebec tax credit calculation is similar, 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.
See the tables of most non-refundable personal tax credits for applicable amounts for each province and territory, and see Quebec amounts subject to indexation for the applicable amounts for Quebec. See Nova Scotia Age Amount for an additional tax credit for 2018 and later years.
Age Amount Clawback Example
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 2017 is $1,084 federally, $251 for Ontario
| Year | 2017 Federal | 2017 Ontario | |||
| Age amount | $7,225 | $4,966 | |||
| Net income for tax purposes (line 236) | $50,000 | $50,000 | |||
| Less threshold | 36,430 | 36,969 | |||
| Excess | 13,570 | 13,031 | |||
| Deduct 15% of excess | 2,035.50 | 1,954.65 | |||
| Age amount | $5,189.50 | $3,011.35 | |||
| Federal 15% tax credit / Ontario 5.05% | $ 778 | $ 152 | |||
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.
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 236 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.
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 13, 2019