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December 2004
If so, please read on for some important information about your Old Age Security (OAS) pension. In accordance with the Income Tax Act, if your net world income exceeds $59,790 (for 2004), you may have to repay part or all of your pension.
How do I know if the recovery tax applies to me?You must pay the recovery tax if:
How do I calculate the repayment amount?Your repayment calculation is based on the difference between your income and the threshold amount for the year. The first step is to figure out how much higher your income is than the threshold. You must repay 11.25 percent of that amount. For example: If your income in 2004 was $75,000, then your repayment would be 11.25 percent of the difference between $75,000 and $59,790: $75,000 - $59,790 = $15,210 15,210 x 0.1125: $1,711 You would have to repay $1,711 for 2004. How does the recovery tax payment work?In January, you receive:
Your NR4 OAS information slip shows the amount of OAS paid to you in the previous year and the amounts deducted for taxes. When you fill out your OASRI form, be sure to fill in the amounts that are indicated on your NR4 slip. Also, be sure to enter the OAS repayment amount on line 235 of your OASRI form. You must send the OASRI form to the Canada Revenue Agency (CRA). If the CRA does not receive this form, you will not receive OAS payments beginning in July. To make sure that your OAS pension payments are not interrupted, be sure to submit your OASRI form by April 30. What if these deductions cause financial hardship?In that case, you may apply to the Canada Revenue Agency for a review of your situation. Please note: The total of the non-resident tax and the OAS recovery tax cannot be more than the amount of OAS benefits you receive. Canadian forms and publications onlineCanada Revenue Agency Social Development Canada You can also contact your Canadian embassy or consulate for forms and publications. The Consular Affairs Bureau is online at: Questions about your taxes?
Canada Revenue Agency
Contact usAbout your Old Age Security benefit:
*Our lines are busiest at the beginning and end of the month. If your inquiry can wait, it's best to call at other times. If you contact us, please remember to provide us with your social insurance or OAS account number. |
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