Q&A: Claiming Pension Credit
Here, Gordon Pape advises a reader who is receiving a life annuity but has not been claiming a tax credit for it.
Q – I’m 73 and have and am receiving a life annuity payment each month from Manulife. Can I claim that as pension income and qualify for the tax credit or is it as I have been doing, claiming it as other income? – George L.
A – Your annuity income is definitely eligible for the $2,000 federal pension tax amount. You should show the income at line 115 of the return, titled “Other pensions and superannuation”. The credit is worth 15% of $2,000, or $300 off your federal taxes. It will also reduce your provincial taxes.
If you have not been claiming the credit in the past, you can still do so. You are allowed to go back 10 calendar years before the year you make the request so a request made in 2014 can only go back as far as 2004. Depending on how long you have been receiving the annuity, you may be able to claim several hundred dollars in lost pension credits. If you need help in doing this, consult a tax professional. – G.P.