In Canada, seniors face a slightly different filing environment than other demographic groups. There are various tax incentives available to eligible taxpayers, some of which are inaccessible to younger taxpayers
There are many tax credits available for seniors in Canada, and eligibility depends on the person's financial situation. It's important to remember that people may also be able to claim additional credits and deductions when they file their tax returns.
Medical expenses
As people get older, medical costs may account for a sizable amount of their spending. Seniors can claim any unpaid expenses on their tax return as expenses. Claims can be made for a wide range of medical costs, including those for prescription drugs, doctor visits, and assistive devices like hearing aids. When it comes to completing tax returns, even upgrades like installing air conditioning to improve indoor air quality might be categorized as medical costs.
Tax Credit Based on Age
Seniors can claim for a non-refundable tax credit against their federal tax liability if they turn 65 or older by the end of the tax year. One’s net income must be less than $39,826 in order to qualify, and the acceptable credit amount varies according to one’s income.
The age-based tax credit was $7,898 for tax year 2022. It is one of the simpler tax deductions accessible to seniors in Canada because the only need is attaining a certain age.
Credit for Pension Income
Seniors have the option to apply for a credit of up to $2,000 when submitting their tax return if they have revealed qualified pension income on line 11500, line 11600, or line 12900.
Tax credit for disabilities
It is possible to claim for the Disability Tax Credit (DTC) if one is 65 years of age or older and has a disability. The purpose of this credit is to lessen the financial strain brought on by additional disability-related expenses. The maximum disability amount that can be claimed is up to $8,870.
Home Accessibility Tax Credit
People who have made accessibility-enhancing home upgrades may be eligible for the Home Accessibility Tax Credit (HATC). A maximum claim of $10,000 is allowed for this non-refundable credit, which can be used to pay for accessibility-related house improvements. For example, installing a stair lift etc.