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Quebec Career Extension Tax Credit

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Quebec -> Personal tax credits -> Tax Credit for Career Extension

Quebec Tax Credit for Career Extension - former Experienced Worker Tax Credit - Line 391

Taxation Act s. 752.0.10.0.2

The tax credit for career extension (formerly experienced workers, renamed for 2019) is available to individuals who live in Quebec and are 60 years of age or older on December 31st of the taxation year (for 2019 and later years), or who are 60 years of age or older on their date of death, if they died in the year.

The amount of the credit depends upon the maximum eligible amount of work income.  This is the amount by which the eligible work income of the individual exceeds the base amount of $5,000.

The March 26, 2015 budget announced changes to this tax credit beginning in the 2016 taxation year, and the March 17, 2016 Budget lowered the age of eligibility further, as did the March 27, 2018 Budget.  The March 21, 2019 Budget enhanced the credit further as per the table below, and renamed it.

The maximum amount of eligible work income on which the tax credit is calculated is dependent on the worker's age.  Eligible work income is reduced above a certain threshold - see example below.

The following table shows the maximum eligible work income above the first $5,000 based on a worker's age, and the 2019 increases as per the Quebec 2019 Budget.

Age of worker Maximum Eligible Work Income Over $5,000
2015 2016 2017 2018 2019
and later
65 and over $4,000 $6,000 $8,000 $11,000 $11,000
64 n/a 4,000 6,000 9,000 10,000
63 n/a n/a 4,000 7,000 10,000
62 n/a n/a n/a 5,000 10,000
61 n/a n/a n/a 3,000 10,000
60 n/a n/a n/a n/a 10,000

There are special calculations for the years in which the age changes.  There are also special rules for cases of bankruptcy.

Eligible work income for the year includes the total of the following amounts included in the income of the individual on the tax return:

bullet salaries, wages and other remuneration, including gratuities, from any office or employment
bullet the excess of business income over business losses
bullet amounts received under the Wage Earner Protection Program Act in respect of wages within the meaning of the Act
bullet income supplements received under a project sponsored by a government or government agency in Canada to encourage an individual to obtain or keep employment, or  to carry on a business either alone or as a partner actively engaged in the business
bullet grants to carry on research or similar work

Amounts excluded from eligible work income:

bullet income from office or employment which is received or enjoyed in the year because of a previous office or employment
bullet amounts deducted in calculating the individual's taxable income for the year (1)
bulletas of taxation year 2016, income from office or employment where the individual is not dealing at arm's length with the employer or, if the employer is a partnership, with a member of the partnership - as per Budget 2015.

(1) From 2011-2012 Budget:  For example, the individual may not include, in computing his or her eligible work income for a year, an amount attributable to the portion of work income deducted in computing his or her taxable income for the year because the income was situated on a reserve or on premises, was exempt from income tax under a tax agreement, entitled the individual to a tax holiday for specialized foreign workers (e.g. researchers, experts, professors) or was related to the exercise of a stock option.

For the year in which an individual turns 65, only the portion of the eligible work income that is attributable to the period in which the individual was at least 65 may be taken into account in computing the tax credit for experienced workers.

This tax credit is included in the calculations in the Quebec tax calculator.  In order to calculate the credit in the year in which an individual turns a particular age, the calculator prorates the income earned in the year.  For instance, if the individual turns 61 in March, 9/12ths of the eligible work income for the year is included in the calculation.  On your actual tax return in the year you turn 61, it is necessary to enter the eligible work income that you earned before turning 61 in the worksheet for the calculation of this tax credit.

Example of calculation for a 66 year old for the taxation year 2015:

Experienced Worker Tax Credit 2015 - Age 66

Eligible work income A $9,000
Less base amount B 5,000
Net amount   $4,000
Lower of net amount and maximum for 2015 C $4,000
Lowest personal tax rate D      16%
C x D E $640.00
Tax Credit = E x 94%   $601.60

Example of calculation for a 65 year old for the taxation year 2016, when income testing began:

Experienced Worker Tax Credit 2016 - Age 65

Eligible work income A $40,000
Less base amount B 5,000
Net amount   $35,000
Lower of net amount and maximum for 2016 C $6,000
Lowest personal tax rate (1) D      16%
C x D E $960.00
E x 94%(2) F $902.40
Eligible work income G $40,000
Less reduction threshold(3) H 33,505
G - H (zero if negative) I 6,495
Reduction rate J        5%
Reduction I x J K $324.75
Tax Credit F - K   $577.65

(1) The lowest personal tax rate is reduced to 15% for 2017 and later years.

(2) The November 21, 2017 Quebec Economic Plan Update, besides reducing the lowest personal tax rate to 15%, also removed the 94% weighting factor in the above calculation, so instead of 94% this would be 100%.

(3) The reduction threshold used is the threshold for calculating the tax credit for a person living alone, for age and for retirement income.  The above threshold of $33,505 is the 2016 amount, which is indexed annually.  However, the reduction does not apply if you were born before January 1, 1951, and the amount of your tax credit is $600 or less.

The rate used for the year to calculate the deduction for workers is 6%, or .06.  This rate is used to calculate the factor of 94%, which is equal to 1 - .06, or 0.94.

If any portion of the tax credit for experienced workers is unused, it cannot be carried over to another year, and it cannot be transferred to the individual's spouse.

Resources:

Revenu Quebec - Tax credit for experienced workers

2019-2020 Budget - Additional Information (pdf) - see page A.3

2016-2017 Budget Plan - Additional Information on Fiscal Measures (pdf) - see page a.24

2015-2016 Budget Plan - Additional Information on Fiscal Measures (pdf) - see page a.6

2013-2014 Budget Plan (pdf) - see page H.51 re indefinite deferral of increase to excess earned income cap

2011-2012 Budget Plan (pdf) - see page J.3

Revised: June 03, 2019

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