Can anyone tell me why the age amount increases taxes owing? It is supposed to decrease it. However, in this case it is opposite. Is it because CPP and OAS is collected but no taxes are deducted and there is also employment income?
Can anyone tell me why the age amount increases taxes owing? It is supposed to decrease it. However, in this case it is opposite. Is it because CPP and OAS is collected but no taxes are deducted and there is also employment income?
The age amount is a credit, so decreases the taxes owing. I would suspect that the total amount of income for the year is the culprit, as taxes owing is based on your income. If you just turned 65 and started collecting CPP/OAS on top of your regular employment income then yes, your income has just increased by at least $9000.
And you «AGE AMOUNT CREDIT» is only 6537$ Line 301your income has just increased by at least $9000.
If «PENSION INCOME» of 2.000$ on line 314 is available ( because of «PENSION INCOME on line 115)....then it almost levels out
You can request witholding tax on OAS and-or CCP in order to avoid quarterly tax installmentsAs you said, there are no withholdings on OAS or CPP. So there is tax owing on this "new" income.
my opinion
Last edited by caricole; 2012-04-13 at 02:43 PM.
No ... The pension amount credit doesn't apply to OAS or CPP.Originally Posted by caricole
Audrey ... The tax credit always reduces your tax payable, as SD said. But the amount that you have to send in in April is merely the difference btwn your tax payable, and any amounts already paid, such as amounts withheld at source, or installment payments. As you said, there are no withholdings on OAS or CPP. So there is tax owing on this "new" income. The old age credit, also new, reduces this amount, but isn't enough to reduce it to zero.
Last edited by cardhu; 2012-04-13 at 01:51 PM.
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