Canadian seniors may be eligible to claim various special deductions and tax credits that are not available to younger taxpayers.
Federal Home Accessibility Tax Credits
Qualifying individuals may claim up to $10,000 in eligible renovation costs to improve the accessibility within your home. Please refer to this CRA article
BC Home Renovation Tax Credit for Seniors and Individuals with Disabilities
The Home Renovation Tax Credit for Seniors and Persons with Disabilities assists eligible individuals 65 and over and persons with disabilities with the cost of certain permanent home renovations to improve accessibility or be more functional or mobile at home.
The program for seniors (and family members living with seniors) started April 1, 2012. Effective February 17, 2016 the program was extended to persons with disabilities (and family members living with those individuals) and renamed the Home Renovation Tax Credit for Seniors and Persons with Disabilities.
You’re eligible to claim the credit for the year if on the last day of the tax year you’re:
- A resident of B.C., and
- A senior or a family member living with a senior, or
- A person with a disability or a family member living with a person with a disability (for 2016 and later tax years)
To learn more, please refer to the following article available on the BC provincial website
If you were 65 years or older on the last day of 2020, then you may be entitled to claim an exemption of up to $7,637. Exemptions are ways of claiming tax credits, which are calculated at 15% of the amount of each exemption. The amount you can claim for your “Age” depends on your taxable income and age. If you earnings are over $89,422, you won’t qualify, but if your taxable income is less than that threshold, then you should have your tax professional include the claim in your tax returns. Please refer to the following CRA article to learn more.
Pension Income Amount
As people get older, they often stop working, meaning their income may be derived from a public pension plan, such as the Canada Pension Plan, or private pension plan. You may claim up to $2,000 in credit for the pension income amount if you have eligible pension income. Eligible income may include pension or annuity income you received as payments for a pension or superannuation plan, payments you received from an RRSP, or payments from splitting your spouse/common-law pension.
If you are married or have a common-law partner, you may shift pension income from one partner to another so the family pays lower tax. If you earn a higher income than your spouse, your spouse may have a lower tax rate, and transferring your eligible pension income amounts to your spouse will allow a decrease in the overall tax your family pays. You can transfer up to 50 percent of your eligible pension income to your spouse or partner.
Medical expenses are a significant cost for anyone. But as people get older, the need for medical care increases and that portion you pay adds up for medical costs. Taxpayers are allowed to claim medical expenses that aren’t reimbursed if they exceed 3 percent of income.
The CRA allows people to claim a wide range of medical expenses — some of them obvious and others, not so much. You may include your prescription medication costs and the amounts you pay to your doctors, for instance. You can claim premiums you pay for private health insurance and travel insurance. You can also claim the costs of attendant care if you are living in a home which offers assistance or nursing. You can also include more obscure medical expenses, such as air conditioning, bathroom aids and book page-turning devices.
When you list your medical expenses, you must be able to account for each cost with documentation.
Federal Disability Tax Credits
If you have a disability, then you may be able to claim the Federal Disability Amount, on top of any provincial benefits received. The CRA requires your physician to complete form T2201 to confirm that various aspects of your daily living have been impaired by your disability. This form can be back-dated to reflect when the disability first occurred, which can be very useful in revisiting and making adjustments to previous tax filings. To learn more, please refer to teh following article on the CRA website.
Family Caregiver Amount
Do you support a spouse or common-law partner, or a dependent with a physical or mental impairment? The Canada caregiver credit (CCC) is a non-refundable tax credit that may be available to you.
You may be able to claim the CCC if you support your spouse or common-law partner with a physical or mental impairment.
You may also be able to claim the CCC for one or more of the following individuals if they depend on you for support because of a physical or mental impairment:
- your or your spouse’s or common-law partner’s child or grandchild
- your or your spouse’s or common-law partner’s parent, grandparent, brother, sister, uncle, aunt, niece, or nephew (if resident in Canada at any time in the year)
An individual is considered to depend on you for support if they rely on you to regularly and consistently provide them with some or all of the basic necessities of life, such as food, shelter and clothing.
To learn more, please refer to the following article on the CRA website
There are a number of programs introduced by the federal and provincial governments since the start of the pandemic.
This includes the one-time increase to the Old Age Security payments. One-time tax-free payment for seniors – Canada.ca
We do not profess to have any expertise in the government relief programs but encourage you to do you own research.
We have provided an overview of the various tax exemptions, tax credits and government support programs that are available to seniors, in particular, There is a lot of support out there, but you need to be aware of the details of each program. We have attempted to outline those details here, but encourage you to call us toll free at 1 (877) 684-1972 to ask questions, or book an appointment through our website at www.focused.biz