Tax Guide for Seniors Canada 2025

Retirement tax strategies for Canadian seniors — OAS clawback, pension income splitting, age amount, and RRIF minimums for 2024.

Key Senior Tax Credits and Benefits

Benefit / Credit	2024 Amount	Notes
Age amount (65+)	$8,790	Reduced above $42,335 net income; eliminated at ~$98,309
Pension income amount	Up to $2,000	15% credit on first $2,000 of eligible pension income
OAS monthly payment	Up to $718.33	Ages 65–74 (2024 rate)
OAS (75+) monthly	Up to $790.16	10% increase at age 75
GIS (low-income)	Up to $1,065/month	Single seniors — income tested

OAS Clawback — Old Age Security Recovery Tax

Old Age Security is clawed back (repaid) if your net world income exceeds the threshold. For 2024, the OAS clawback threshold is $90,997. For every dollar of income above this threshold, you repay 15 cents of OAS. OAS is completely eliminated when income reaches approximately $148,179 (ages 65–74). Strategies to avoid or reduce the clawback:

• Splitting pension income with your lower-income spouse
• Withdrawing from TFSA instead of RRSP/RRIF (TFSA withdrawals don't count as income)
• Timing RRSP or RRIF withdrawals strategically
• Deferring OAS to age 70 (increases benefit by 36%, and potentially avoids clawback in early retirement years)

Pension Income Splitting

Canadian couples can split eligible pension income to reduce the combined family tax bill. Up to 50% of eligible pension income can be allocated to the lower-income spouse. Eligible pension income includes: RRIF withdrawals (at 65+), life annuity payments from a registered pension plan, and certain other pension income. To split pension income, complete Form T1032 and file it with both returns.

RRIF Minimum Withdrawals

Once you convert your RRSP to a RRIF (required by December 31 of the year you turn 71), you must withdraw a minimum amount each year. The minimum is a percentage of your RRIF balance at the start of the year:

Age	Minimum Withdrawal %
71	5.28%
75	5.82%
80	6.82%
85	8.51%
90	11.92%
95+	20.00%

RRIF withdrawals are fully taxable as income in the year received. Withholding tax applies to withdrawals above the minimum. You receive a T4RIF slip each year.

CPP Income and Tax

Canada Pension Plan (CPP) payments are taxable income. Your CPP amount depends on your contributions during your working years and when you start collecting (age 60–70). Starting CPP at 70 instead of 65 increases payments by 42%. CPP income is reported on a T4A(P) slip. No CPP contributions are required on CPP income.

Medical Expense Tax Credit for Seniors

Medical expenses are often higher in retirement. You can claim eligible medical expenses exceeding 3% of net income or $2,635 (whichever is less). Common senior medical expenses include prescription drugs, dental care, vision aids, hearing aids, home care services, and medical equipment. Choose the 12-month period that maximizes your eligible expenses — it doesn't have to be the calendar year.

Disability Tax Credit (DTC)

Seniors with severe mobility, vision, hearing, or cognitive impairments may qualify for the Disability Tax Credit ($9,428 base amount for 2024). Apply using Form T2201, certified by your doctor. The DTC can also be transferred to a supporting family member if you have insufficient tax to use it yourself.