We all know that pension is available to all taxpayers and the Pension Amount varies according to the annual net income. How you file your income tax also depends on your further pension income that you can claim from the government. Eligible taxpayers in Canada can claim pension income amounts up to CAD 2000 if they report qualified pension income on their tax return.
If you are receiving income from other programs such as Old Age Security, Quebec Pension Plan, or Retirement Allowance, it should not need to be reported in the income tax return and should be reported on line 11500, line 11600, and Line 12900 of the tax return. If you want to know more details about Pension Income Amount: what it is and who is eligible for CAD 2000 Pension Income Amount then read the following section carefully.
Pension Income Amount
Pension income allows a taxpayer to receive a non-refundable tax credit for up to CAD 2000 of eligible pension. Only taxpayers in Canada can claim federal income tax depending on how much tax they are paying as the maximum federal tax savings available is CAD 300 per year i.e. CAD 2000*15%. Eligibility and credit score are not required to claim pension income.
If you are in a lower tax bracket then you can claim up to CAD 2000 Pension Income Amount from the government, whereas if you are in a higher tax bracket then the pension income amount for you will be reduced and will be available at a lower rate. As per the latest update, the Federal Tax Credit rate is 15% and further benefits will be calculated as per the rate.
$2000 Pension Income Amount – Overview
|Pension Income Amount
|Canada Revenue Agency
|Citizen of Canada
|65 Years Old
|Current Federal Tax Credit Rate
CAD 2000 Pension Income Amount
Eligible taxpayers in Canada will receive CAD 2000 of Pension Income Amount from the federal government. It is a payment that makes up 1/3 of your annual income and provides you with financial support after retirement. You can contribute to a pension program to save money to support your retirement.
There are many parameters based on which the decision to give you a pension amount will be taken. So if you want to know how much amount can you get from pension income amount then you need to read this article and know the updates available here. Normally the pension income will be distributed at the age of retirement i.e. 65 years. You can also check the income bracket for Pension Income Amount from the sections below.
What is CRA Pension Income Amount and Who Can Get It?
The federal government has set certain brackets to become eligible to receive pension income money. If you are a taxpayer in Canada, you can receive pension income amount in your account which will be non-refundable and tax-free. Eligible people can claim the Pension Income Amount without any conditions if they are aged 65 years and above. This means that if a person has a Pension Income Amount on line 31400 unless he meets the conditions associated with retirement, annuity payment or any eligible pension, he can claim a Pension Income Amount of CAD 2000 from the government.
If you are receiving annuity payments from an employer pension scheme then you are eligible for Pension Income Amount. But whenever you leave the employer and want to transfer the account to a locked-in retirement account it does not allow you to claim the Pension Income Amount as it goes to your retirement savings plan and its benefits are availed till then you turn 65 age. Unless this is the case, it may impact whether you decide to commute your pension when you retire.
Who will be Eligible for Pension Income Amount and Annuity Income?
Below I have attached a table that contains updates and information that shows the eligible pensioners and the required condition to claim the Pension Income Amount from the Federal Government. If you want to know your eligibility for Pension Income Amount then please see the table below to know more.
|Slip or Form
|Regular Annuities and IAAC
|RPP Lifetime Retirement Benefits
|Variable Pension Benefits
|RPP Lifetime Retirement Benefits
|Regular Annuities and IAAC
|Elected Split Pension Income
What Do You Know About CRA Line or CRA Lines Defined?
These are the eligibility conditions and also indicate your income level for which you may be eligible for the CAD 2000 Pension Income Amount. All taxpayers must satisfy all the criteria to be eligible for the Pension Income Amount. If you want to claim the Pension Income Amount of CAD 2000 then you have to follow certain conditions mentioned further in this section.
CRA Line 11500:
- Line 11500 defines retirement and other pensions.
- This is a part of your total income and must be reported on your return.
- 11500 was line 115 before the tax year 2019.
- Payments from a pension or retirement plan are usually shown on a T4A slip or T3 slip.
CRA Line 11600:
- CRA line 11600 before tax year 2019 was 116.
- If you are the recipient or transferor spouse or common-law partner then a joint decision needs to be made to split the eligible pension income.
- For this, you will need to complete Form T1032, Joint Election to Split Pension Income.
- If you are receiving a spouse or common-law partner, the elected divided pension amount must be entered from line 22 of Form T1032 to line 11600 of their return.
- If you are a taxpayer, it is important to know that you can make a joint election only once a year.
CRA Line 12900:
- This is Registered Retirement Savings Plan (RRSP) income which refers to the money you withdraw from or receive from the RRSP.
- This income will be shown on the statement of T4RSP, and RRSP income slip.
- You may qualify for the pension income amount if the annuity payment shown in box 16 of your T4RSP slip is on line 31400.
Who is Eligible for a CAD 2000 Pension Income Amount?
Several criteria define your eligibility to claim pension income amount from the government. If you have reported eligible pension, and retirement payments on your T1 income tax return then you are eligible to claim the Pension Income Amount. Here are some rules on what to do and what not to do for the type of pension Income Amount.
If you are 65 years of age or older then you can receive pension income amount. You are eligible for this payment if you benefit from a retirement or pension plan, RPP benefits, RRIF income, DPSP income, EBP benefits, Regular Annuities, Elected Split Pension Income, or Variable Pension Benefits. If you are under 65 you can receive up to CAD 2000 of Pension Income Amount in the case of the death of your spouse or common-law partner. If you are receiving benefits from programs like OAS, CPP, or QPP then you are not eligible for Pension Income Amount to get CAD 2000 Pension Income Amount. For details, you can visit the official website.