Age amount

The federal age amount is a non-refundable tax credit that allows you to reduce your tax payable if:

  • You’re 65 years of age or older at the end of the year and
  • Your net income is less than $89,421 for 2020

The amount you’re entitled to claim depends on your net income for the year. If your 2020 net income is $38,508 or less, you can claim $7,637. If, however, your net income was more than $38,508, the amount you can claim is calculated by subtracting $38,508 (base amount) from your net income and multiplying the difference by 15%. This amount is then subtracted from the maximum claimable amount.

For example, let’s say you turned 65 in 2020 and your net income for the year is $50,000. Based on the following calculation method, the age amount you can claim is $5,913.20.

Net income minus base amount: $50,000 - $38,508 = $11,492

Difference multiplied by 15%: $11,492 X 15% = $1,723.80

Subtract result from maximum: $7,637 - $1,723.80 = $5,913.20

Note: If you declared bankruptcy during the year or if you’re no longer a Canadian resident for tax purposes, special rules apply. Refer to the Canada Revenue Agency (CRA) website for more information.

Remember, if you’re eligible to claim the federal age amount, you’re also entitled to claim a corresponding provincial age amount, which varies in amount depending on which province or territory you live in.