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tax season | Elderly support

Ottawa and Quebec have stepped up a series of measures intended for the elderly among us. summary.

Improve old age pension

The federal government has increased the Old Age Security (PSV) pension by 10% for those age 75 and older since July 2022. For those getting the full PSV, the improvement represents about $800 annually. PSV is taxable.

“Measures for seniors affect many people with an aging population,” says Luce Morin, CPA, owner of Activ Accounting and Tax Services, in Lachine. About a third of the returns it counts are for people 65 and older.

Seniors Assistance: $2,000 for those 70 and older

The Legault government again improved the Senior Citizen Support refundable credit in 2022, increasing it from $400 to $2,000 for taxpayers 70 or older. The maximum credit limit for a married couple of the same age is $4,000. The credit is calculated based on the family’s income. It drops from $39,350 for a single person and $79,350 for a couple. It disappears when the individual’s income reaches $64,195 and $119,350 for the married couple.

For example, a person who earns $60,000 is entitled to receive $420.25. A couple of two seniors age 70 and over who declares a household income of $100,000 will receive $967.50.

According to the head of tax and public finance at the University of Sherbrooke, an additional 320,000 households will now receive the enhanced credit. Could this be your case?

Note that credit will not be indexed in the future.

Home support: more generous

The Refundable Home Support Tax Credit for Seniors (CIMAD) gives people over the age of 70 the ability to pay a portion of the occupancy cost (rent + utilities) in a private residence for seniors (RPA). CIMAD is also designed to help people in the third age group live in their own home or apartment.

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The credit is especially generous for people who are not independent.

In 2022, the government is improving the credit rate, but includes more methods of penalizing credit reduction based on income. On the Internet, the elderly receive more, especially those with lower incomes.

The maximum eligible expense is $19,500 for a dependent person and $25,500 for a non-dependent senior.

Credit, which was 35%, will rise to 36% in 2022. It will rise by 1 percentage point annually to 40% in 2026.

Prior to 2022, a person who was not independent was not subject to this tax credit reduction, regardless of their income. This will not be the case since 2022, but the credit reduction only applies to the enhanced portion of the credit. Very little effect.

For someone who is considered independent, and who was already subject to a credit reduction if they had a good income, the reduction becomes greater starting in 2022 if they had an income of greater than $100,000.

“The rent ceiling, which used to be $600 a month, which wasn’t much, now goes to $1,200 a month,” Los Morin confirms.

Consider an independent 72-year-old who lives alone in an apartment on more than $1,200 a month and reports an income of $50,000. You’ll get a $259.20 credit in 2022 instead of $126 in 2021. Enough to absorb a fraction of the rent increase!

To obtain CIMAD, one completes Appendix J of the provincial income tax return. You can receive advance payments by submitting Form TPZ-1029.MD.7.

It should be noted that the Legault government, after increasing the balance of support for the elderly up to $ 2,000, took the opportunity to eliminate the balance of activities for the elderly from 2023. So, this spring, for the last time, you can take advantage of this credit in the amount of $ 40 Maximum.

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Home access: Double Hit

Climbing stairs is difficult for you? Are you planning to build a bedroom with bathroom on the ground floor? Good news, the federal government has doubled the Home Accessibility Credit for people over 65 and people with disabilities. As of 2022, the amount of eligible expenses has increased from $10,000 to $20,000. The maximum credit doubles, from $1,500 to $3,000.

Tax tip: Amounts incurred to improve your home’s accessibility can be deducted twice on your income tax return: once to determine the aforementioned tax credit and again as medical expenses.

This would be the case, for example, for expenses incurred for the side door of a therapeutic bath or the installation of a mechanical lift, according to information provided by the Center for Training in Taxes (CQFF).