Seniors – There are important tax benefits for you!
Each Saturday, I go for coffee with my dad. At one of our meetings a couple of weeks ago, my dad very excitedly told me he would likely never owe any tax again. His income will dip, as he will only have CPP, his RRSPs, and personal savings to draw from. Even so, my father like many his age, has worked all his life, is ready to retire and relax as he reaches 65. So, my father asked, “Should I keep filing a tax return?”
My answer to my father was one I would give to anyone in his age or position: Absolutely.
You may have an immediate family member who is a senior, know a senior, or perhaps you are a senior. Seniors should always file an income tax and benefit return.
Seniors who have low to modest incomes may be eligible for additional federal and provincial benefits and credits. However, eligibility for these programs, in most cases, is determined by the income reported on your tax return. These programs include:
– BC Medical Service Premiums, which may be waived for those with low-income based on their tax returns filed
– GST and PST credits, which can only be received if a tax return is filed
– Refundable disability credits are available for either a spouse or child on which the parent is dependant, reducing the tax to pay for the senior or their caregiver. These can only be accessed by filing a tax return.
– Shelter Aid for Elderly Renters or SAFER: a program available to seniors over the age of 60 in BC. You need to provide a notice of assessment or a complete income tax return to apply for this program.
– Federal programs such as the Guaranteed Income Supplement and Old Age Security (OAS). You must apply for these benefits with Service Canada, but Service Canada will require a copy of your Notice of Assessment to determine the total amount you will receive.
– Fees for provincially run care homes determined on a sliding scale, based on income from your tax returns.
Seniors who receive pensions from multiple sources, as well as foreign sources should always file a tax return. Unfortunately, foreign pension income is often omitted, inadvertently, from tax filings. Unreported foreign pension income is on CRA’s radar right now – they are assessing heavy penalties and interest for those that do not report this income on a return, regardless of the person’s ability to pay. As an example, see this article from December 2014 from the CBC: http://www.cbc.ca/news/canada/british-columbia/canada-revenue-agency-goes-after-ailing-b-c-senior-for-12k-1.2861287
If you or someone you know wants to get up-to-date on their tax filings, or disclose previously unreported pension income, please call us. We can help. We know how to guide you through CRA’s processes to get the benefits and credits you deserve!
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.