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Cannan: Opportunities for seniors to reduce their tax burden
The federal government has established many tax credits and benefits targeted to seniors aged 65 and up to help reduce their tax burden.
So when our minister of state for seniors, Alice Wong, recently sent along the following information to me, I thought it would be a good idea to share it with you.
The information helps explain the benefits and credits available to seniors and whether or not you are eligible.
If you find any of the information below unclear, do not hesitate to go to www.cra.gc.ca/seniors or contact my office via phone 250-470-5075 or email firstname.lastname@example.org and my staff will be happy to help you.
You are eligible for this credit if you are a resident of Canada for income tax purposes in the month prior to, and at the beginning of the month in which the GST/HST credit is issued and at least one of the following applies:
• You are 19 years of age or older before the month in which the Canada Revenue Agency makes a quarterly payment
• You have (or have previously had) a spouse or common-law partner; or
• You are (or previously were) a parent and live (or previously lived) with your child.
To receive the GST/HST credit, you have to apply for it, even if you received it last year.
To apply, you have to file an income tax and benefit return, even if you have no income to report, and check the “Yes” box in the GST/HST credit application area on page 1 of your income tax return.
Be sure to enter your marital status and information about your spouse or common-law partner, including their net income and social insurance number, in the identification area on page 1 of your return.
Without this information, your application may be delayed.
You can claim this amount if you were 65 years of age or older on Dec. 31 of the taxation year (2012), and your net income (line 236 of your return) is less than $78,684.
How to claim the age amount:
• If your net income was $33,884 or less, enter $6,720 on line 301 of Schedule 1, Federal Tax;
• If your net income was more than $33,884, but less than $78,684, complete the chart for line 301 on the Federal Worksheet to calculate your claim.
Pension income splitting
You and your spouse or common-law partner can choose to split 50 per cent of the eligible pension income you received in the year if you meet the following conditions:
• You are married or in a common-law partnership with each other in the year and are not, because of a breakdown in your marriage or common-law partnership, living separate and apart from each other at the end of the tax year and for a period of 90 days or more that began during the year; and
• You are both residents in Canada on Dec. 31 of the year; or if deceased in the year, the individual was a resident in Canada on the date of death; or if bankrupt in the year, you were a resident in Canada on Dec. 31 of the year in which the tax year (pre- or post-bankruptcy) ends; and you received pension income in the year that qualifies for the pension income amount.
Pension income amount
You may be able to claim up to $2,000 for the pension income amount if:
• You reported eligible pension, superannuation, or annuity payments on line 115, line 116, and/or line 129 of your income tax return; or
• You were less than 65 years of age at the end of the year; and
• The income you reported at line 115, line 116, and/or line 129 is listed in the Eligible Pension and Annuity Income chart and was received due to the condition listed for that type of income.
There are many medical expenses, prescribed by an authorized medical practitioner, that you can claim on your income tax return.
On line 330 of your return, you can claim the total eligible medical expenses you or your spouse or common-law partner paid for:
• Your spouse or common-law partner; and
• Your or your spouse’s or common-law partner’s child was under 18 years of age at the end of the year.
Medical expenses for other dependants must be claimed on line 331.
For a full list of eligible medical expenses and for more information, visit www.cra.gc.ca/medical.
Public transit amount
If you pay for a public transit pass, you may be able to claim the public transit amount on your tax return.
Eligible passes must permit unlimited travel for a specified period of time within Canada on local buses, streetcars, subways, commuter trains or buses, or local ferries.
You can also claim the cost of:
• Shorter duration passes if each pass entitles you to unlimited travel for an uninterrupted period of at least five days; and you purchase enough of these passes so that you are entitled to unlimited travel for at least 20 days in any 28-day period.
• Electronic payment cards if the card is used to make at least 32 one-way trips during an uninterrupted period not exceeding 31 days; and the card is issued by a public transit authority that records and provides a receipt for the cost and usage of the card.
Our government has made seniors a priority and I trust that you will find this information useful.