Pension Income Credit
Do you know how the Federal Pension Income Tax Credit is calculated? Did you know that ‘pension income’ is calculated differently depending on your age? Do you know what is excluded from ‘pension income’? Are you aware of tax planning strategies using the pension income credit?
This article will help you understand the pension income credit.
How is the Pension Income Credit calculated?
The federal pension income credit is calculated using the following formula:
15% * the lesser of your ‘pension income’ or $2,000
This means that the maximum pension income credit is $300 (15% * $2,000). Any provincial taxes will increase the effect of this credit.
Read More by clicking on the PDF below: