Ads keep this website free for you.
TaxTips.ca does not research or endorse any product or service appearing in ads on this site.  Before making a major financial decision you  should consult a qualified professional.

Age Amount Tax Credit TaxTips.ca
Canadian Tax and
Financial Information

If you use an ad blocker, please consider a small contribution to help keep TaxTips.ca free for everyone.

Need an accounting, tax or financial advisor? Look in our Directory.  Use above search box to easily find your topic!   Stay Connected with TaxTips.ca!
Home
What's New
Calculators
Personal Tax
Business
Sales Taxes
Free in 30!
Financial Planning
RRSP RRIF TFSA
Real Estate
Stocks Bonds etc.
Seniors
Disabilities
Canada
Alberta
British Columbia
Manitoba
Ontario
Quebec
Saskatchewan
Atlantic Provinces
Territories
Federal Budget
Prov/Terr Budgets
Statistics etc.
Glossary
Site Map
Directory
Advertise With Us
Contact Us/About Us
Links & Resources
Filing Your Return -> Federal and Provincial Age Amount Tax Credits

Line 30100 Age Amount Tax Credit

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 2020 is $7,637 (2019 is $7,494).  This 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 $38,508 for 2020 ($37,790 for 2019), and is eliminated when income exceeds $89,421 for 2020 ($87,750 for 2019).

The tax credit is calculated using the lowest tax rate (15% federally), so the maximum federal tax credit for 2020 is $1,146 ($1,124 for 2019).

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 2019 is $1,124 federally, $261 for Ontario.

Year           2019 Federal                     2019  Ontario        
Age amount $7,494 $5,166
Net income for tax purposes (line 236)     $50,000 $50,000
Less threshold   37,790   38,463
Excess   12,210   11,537
Deduct 15% of excess   1,831.50   1,730.55
Age amount $5,662.50 $3,435.45
Federal 15% tax credit / Ontario 5.05% $  849.38 $   173.49

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.

The age amount clawback is calculated by the Detailed Tax and RRSP Savings Calculator.

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.

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: May 21, 2020

 

 

Copyright © 2002 Boat Harbour Investments Ltd. All Rights Reserved.  See Reproduction of information from TaxTips.ca

Facebook  | Twitter  |  Monthly Newsletter Sign-up  What’s New E-mail Notification RSS News Feed
The information on this site is not intended to be a substitute for professional advice.  Each person's situation differs, and a professional advisor can assist you in using the information on this web site to your best advantage. 
Please see our legal disclaimer regarding the use of information on our site, and our Privacy Policy regarding information that may be collected from visitors to our site.