Before we get to the tax tips below, I’d like to point you to a scathing report on the Canada Revenue Agency released late last year by Auditor General Karen Hogan, which reinforces what many Canadians have been saying for years about our tax collectors – they’re really not that helpful.
Despite the Liberal government’s efforts to improve service at the CRA, the AG found that too many Canadians are getting slow and often inaccurate information from the agents who answer their calls. The report scolded the CRA for the length of time it keeps people waiting: last year, it took callers an average of 31 minutes to get through to an agent, and just 18% of callers reached one within 15 minutes. And it criticized the agents for providing incorrect information: responses to individuals about tax questions were accurate only 17% of the time – a dismal record by any standard.
So to help you avoid the endless wait to speak to an agent – and the likelihood that even when you get through, there’s no guarantee the info you receive will be correct – we asked Gerry Vittoratos, a Montreal-based tax specialist from the online tax preparation software company UFile, to share some tips that older Canadians should keep in mind when filing their 2025 income tax, due April 30 this year.
Middle Class Tax Cut
So what’s the big change seniors should look for when filling out their income tax forms this year? “The middle class tax cut,” replies Vittoratos. In the last filing year (2024), we paid 15% on our first $57,000 in reported income. This year, that rate will drop to 14.5%, a savings of $285. Vittoratos notes that the rate will drop to 14% next year – good news for Canadians who have been hit hard by higher food prices and tariff-related inflation.
Tax Free Savings Account
Vittoratos explains that TFSAs have been indexed $500 higher this year, meaning you can now contribute up to $7,000 to your registered investment account. “They’re probably going to bump it up next year by another $500,” he adds. Be careful not to over-contribute – you could face a penalty tax of 1% per month on excess contributions. For more information, visit the CRA’s TFSA page.
Medical Expenses
Older Canadians who have high medical expenses should keep their receipts and claim them on their tax return. Eligible expenses must be incurred in the 12-month period ending in the tax year and total over 3% of your net income, or $2,833. Confused about what qualifies for a medical claim? Vittoratos advises you to visit the CRA site. “They have a search box where you just type in your expense. If there’s a match, then you can claim it.” Visit the CRA’s Medical Expenses page.
GST/HST Credit
People with low or modest income may qualify for this credit to offset some of their GST/HST expenditures. Your spouse or common-law partner must also file taxes so the CRA can calculate household payments. When you submit your taxes, the CRA will automatically determine your eligibility. Visit the CRA’s GST/HST Credit page
Canada Caregiver Tax Credit
If you support a spouse, common-law partner or a dependent over the age of 18 with a physical or mental impairment, you may qualify for the Canada Caregiver credit. To find out the different amounts to claim depending on your situation, visit the CRA’s Canada Caregiver Tax Credit page.
Disability Tax Credit
This non-refundable tax credit allows people with disabilities (or those who support them) to reduce the amount of income tax they may have to pay. Note that you must first apply and be approved before you can claim this credit. Find out more at the CRA’s Disability Tax Credit page.
Home Accessibility Tax Credit
If you’ve made upgrades to improve the safety or accessibility of your living space, you may be able to make a claim. To qualify for this non-refundable credit, you must be 65 or older and own your own home in Canada. For a list of how to claim and eligible expenses, go to the CRA’s Home Accessibility Tax Credit page.
Multigenerational Home Renovation Tax Credit
This federal refundable credit is available to seniors, or to those 18+ who qualify for the disability tax credit and are related to the owner. Available since 2023, this credit provides up to $7,250 (14.5% of up to $50,000 in eligible expenses) to build a secondary suite for a senior or disabled family member. Vittoratos notes that to qualify, the unit must be a self-contained dwelling with a private entrance, kitchen, and bathroom. See the CRA’s MHRTC page for full details.
Pension Income Splitting
If you are receiving payments from your pension plan and meet certain requirements, you may be able to transfer up to half of your eligible pension income to a spouse or common-law partner, thus reducing the amount of tax you have owing. There is a long list of requirements, the answers to which you can find on the CRA’s Pension Income Splitting page.
File Your Taxes
Even if you don’t have any income to report, Vittoratos urges you to file your taxes on time. That’s because many important seniors benefits are unlocked when the government receives your completed tax form. These include: GST/HST Credit, Age Amount Credit, Old Age Security (OAS), Guaranteed Income Supplement (GIS), and the survivor’s allowance for people aged 60 to 64.
