One of the biggest tax benefits for seniors in Canada to enjoy in 2024 is the Age Amount Tax Credit, which could see eligible recipients receiving up to $8,396 in tax relief. One of the many efforts made by the Canadian government toward seniors to alleviate their tax burden and to ensure better financial security for them, this credit is. So who is eligible for this credit, and when can seniors freshen up their tax returns around this benefit?
What is the Age Amount Tax Credit?
Age Amount Tax Credit: Benefits the Non-Refundable Tax Credit for Canadian Seniors (65 years and older) as help in reducing income tax paid by individuals aged above 65 years based on income assessment. The credit amount varies with respect to that of the senior’s income, as the higher the income, the less they might be eligible for. In 2024, this is the maximum amount claimable for an eligible senior: $8,396.
This would be lower depending on net income. The Age Amount starts to dwindle once income for seniors exceeds a certain threshold. For those with a higher income, the actual credit would become progressively smaller. The loss is effective once an amount of net income in the hands of the taxpayer has gone over $41,760 for 2024. For each dollar over that threshold of income, the credit is reduced by 15 percent.
Who Is Eligible for the Age Amount Tax Credit?
Determined primarily based on two conditions: age and income.
- Age: You must be 65 years of age or older as of December 31 of the tax year (2024) in order to qualify. Hence, seniors who turn 65 years old in 2024 will be eligible to claim the credit for the 2024 tax year.
- Income: As mentioned above, the amount of credit is reduced as a senior citizen’s income rises. Where your net income exceeds $41,760, the amount available as credit is reduced. For every increment of income you earn above this figure, the amount you may claim for Age Amount gets reduced, with a complete phase-out occurring at $97,069. Above this amount, seniors will not qualify to receive the Age Amount Tax Credit based on their net income.
Thus, for those folks whose income is below the phase-out threshold, they qualify for the entire $8,396.
Claiming the Age Amount Tax Credit
The Age Amount Tax Credit is claimed, by an eligible senior, by filing a T1 General tax return with the amount included on Line 30100 of the Schedule 1 form, calculating federal tax on income. This will then be deducted from the tax owed.
When filing a tax return electronically, the credit should automatically be calculated by the application, so the best practice is to check the tax return or consult a tax preparer to ensure the full benefit.
When Will the Credit be Accessible?
The Age Amount Tax Credit will be available to seniors once they file their 2024 tax returns during 2025. Taxes apply at the time they are filed and reported, so you will see it show up after you send in your tax return, and after its processing is over. It typically takes a few weeks to a few months before Canadians receive their tax refunds after filing, with the exact time frame depending on whether they file online or by paper.
Also Read: CRA To Send $2400 Direct Deposit To Canadian Seniors In December: Find Out If You’re Eligible
