Tax Credits for Retirees

In addition to the tax credits that the average Canadian taxpayer is eligible for, there are a few more available to retirees and those age 65 and older.

Age Amount/Credit

If you are 65 or older at the end of the year, you are eligible for the age credit, a non-refundable tax credit for Canadians 65 years of age and older. This credit is indexed to income levels, so it may be reduced depending on your circumstances.

Pension Income Amount

Canadians may be able to claim up to $2,000 of eligible annuity and/or pension income as a non-refundable tax credit. Eligibility is based on age and type of income. Details include:

  • For those receiving pension income from a defined benefit pension plan, the annual credit is available at any age.
  • For those under age 65 and not receiving a defined benefit pension income, eligibility is generally limited to income from annuities or registered retirement plans received as the result of the death of a spouse/partner.
  • For those aged 65 and older, annuity income and withdrawals from the following are eligible:
    • LIFs - life income funds (from a defined contribution pension plan or similar)
    • RRIFs - registered retirement income funds
    • DPSPs - deferred profit-sharing plans
  • Eligible pension income excludes CPP/QPP and OAS.  
  • Income that is entered in lines 115 or 129 of your federal income tax and benefit return (or lines 122 or 123 of a Quebec tax return), qualifies for the credit. 
  • If spouses/partners elect to split pension income, each person may be able to claim up to $2,000 as the pension income amount.