Also, if your income exceeds the threshold but you anticipate having a significantly lower income next year, you may be able to skip your repayment obligation. Search for:. Pin 1. Shares 1. File with confidence and accuracy - Canada's 1 Tax Software. If you know your income will be substantially lower, so that your clawback will be less, or even zero, you can complete Form T OAS to request a reduction of the OAS recovery tax that is or will be deducted from your OAS pension.
A reader contacted us to let us know that he had completed this form to provide his estimated taxable income, and included the pension splitting deduction that he would be applying on his income tax return.
However, he was told that the pension splitting deduction was not allowed as a deduction on the T OAS. On Form T OAS , the income section asks for current-year income from all sources, as per page 2 of the income tax return, and the deductions section asks for deductions from current-year income as per page 3 of the income tax return.
The only specific deduction listed is carrying charges and interest expenses, followed by "other deductions". The pension splitting deduction is included on page 3 of the income tax return.
We previously advised you to include pension splitting in other deductions if this applied to you. However, the version of the T OAS was revised to explicitly exclude pension splitting from deductions. Although RDSP income should not be included on the form, there are no instructions to this effect. The calculation of the clawback amount for the current year is done on the Federal Worksheet part of your tax return.
If your income exceeds the OAS clawback threshold level, the amount of the clawback will be deducted on line line prior to social benefits repayment. This reduces your taxable income so that you are not taxed on the amount being paid back. The clawback will also be shown on line line prior to social benefits repayment, which adds the amount to your total payable. If you know that your income will not exceed the OAS threshold, or will not exceed it by as much as the previous year, you can request that less or no recovery tax be deducted, by completing form T OAS - see link at bottom.
When you complete your tax return, your OAS clawback is recalculated based on the taxable income on your tax return. Your income taxes payable including current year clawback, if any, will be reduced by the income tax including recovery tax that has been deducted from your income during the year. If your income is lower starting at age 70, this could help you avoid the clawback. Please help me!
I am a retired single female senior. The sale was reported on my Income tax as requested by the government. I think the federal government want me to commit suicide. Good day. And for how long.. No savings,no home, no retirement money.. I am a single widowed woman and now once bills and rent is paid I do not have enough for food. How do you expect me to live?? Diane: Sorry to hear. I have just retired in sept Am already taking CPP. Can you recover the OAS recovery or is that lost until a newer tax return happens?
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