Taxes on retirement income
What comes off each source before it reaches the bank: withholding, instalments, credits and the OAS recovery tax.
The form that can lower OAS clawback deductions in a year your income drops
Monthly OAS recovery tax is based on an older tax return. When this year’s income is much lower, form T1213(OAS) asks the CRA to reduce what is held back.
Why some retirees open a RRIF before they have to
The deadline is the end of the year you turn 71, but RRIF income from 65 qualifies for the pension income amount and for pension splitting. RRSP withdrawals do not.
What withholding tax takes from an RRSP withdrawal
The bank keeps 10, 20 or 30 per cent of a lump-sum RRSP withdrawal outside Quebec. That is a deposit against the tax bill, not the bill itself.
How to ask for tax to be taken off CPP and OAS payments
No income tax comes off CPP or OAS for Canadian residents unless they ask. One request, online or on paper, can spare a large bill in April.
The Friday File. One source of retirement income, explained on a single page.
Every Friday: one rule, one date or one number worth checking on CPP, workplace pensions, RRSPs, RRIFs or the tax on them. Free, and you can unsubscribe from any issue.