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Quebec Tax Credit for Experienced Workers

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Quebec -> Personal tax credits -> Experienced worker tax credit

Quebec Experienced Worker Tax Credit - Line 391

The tax credit for experienced workers was available starting in the 2012 taxation year.  It is available to individuals who live in Quebec and are 65 years of age or older on December 31st of the taxation year, or who are 65 years of age or older on their date of death, if they died in the year.

The amount of the credit depends upon the eligible amount of work income.  This is the amount by which the eligible work income of the individual exceeds the base amount of $5,000, to a maximum of $4,000 in 2015 ($3,000 in previous years).

The March 26, 2015 budget announced changes to this tax credit beginning in the 2016 taxation year, and the March 17, 2016 Budget lowered the age of eligibility further.  The age of eligibility will be lowered over a period of 2 years, from 65 to 63, and now to 62 in 2018.  The maximum amount of eligible work income on which the tax credit is calculated will be increased gradually to $10,000 for all workers age 65 and over.  The tax credit will also be reducible based on work income.  Eligible work income is reduced above a certain threshold - see example below.  However, for a person who was 65 prior to the end of 2015, the amount of the tax credit will not be less than it would be using the 2015 calculation of the credit.

The following table shows the maximum eligible work income above the first $5,000 based on a worker's age, and the planned increases.

Age of experienced worker Maximum Eligible Work Income
2015 2016 2017 2018
and later
65 and over $4,000 $6,000 $8,000 $10,000
64 n/a 4,000 6,000 8,000
63 n/a n/a 4,000 6,000
62 n/a n/a n/a 4,000

There are special calculations for the years in which the age changes, and the credit is available for both ages.  There are also special rules for cases of bankruptcy.  Details are in the Budget 2015 Additional Information on Fiscal Measures - see link at bottom of page.

Eligible work income for the year includes the total of the following amounts included in the income of the individual on the tax return:

bullet salaries, wages and other remuneration, including gratuities, from any office or employment
bullet the excess of business income over business losses
bullet amounts received under the Wage Earner Protection Program Act in respect of wages within the meaning of the Act
bullet income supplements received under a project sponsored by a government or government agency in Canada to encourage an individual to obtain or keep employment, or  to carry on a business either alone or as a partner actively engaged in the business
bullet grants to carry on research or similar work

Amounts excluded from eligible work income:

bullet income from office or employment which is received or enjoyed in the year because of a previous office or employment
bullet amounts deducted in calculating the individual's taxable income for the year (1)
bulletas of taxation year 2016, income from office or employment where the individual is not dealing at arm's length with the employer or, if the employer is a partnership, with a member of the partnership - as per Budget 2015.

(1) From 2011-2012 Budget:  For example, the individual may not include, in computing his or her eligible work income for a year, an amount attributable to the portion of work income deducted in computing his or her taxable income for the year because the income was situated on a reserve or on premises, was exempt from income tax under a tax agreement, entitled the individual to a tax holiday for specialized foreign workers (e.g. researchers, experts, professors) or was related to the exercise of a stock option.

For the year in which an individual turns 65, only the portion of the eligible work income that is attributable to the period in which the individual was at least 65 may be taken into account in computing the tax credit for experienced workers.

This tax credit is included in the calculations in the Quebec tax calculator.  In order to calculate the credit in the year in which an individual turns 65, the calculator prorates the income earned in the year.  For instance, if the individual turns 65 in March, 9/12ths of the eligible work income for the year is included in the calculation.  On your actual tax return in the year you turn 65, it is necessary to enter the eligible work income that you earned before turning 65 in the worksheet for the calculation of this tax credit.

Example of calculation for a 66 year old for the taxation year 2015:

Experienced Worker Tax Credit 2015 - Age 66

Eligible work income A $9,000
Less base amount B 5,000
Net amount   $4,000
Lower of net amount and maximum for 2015 C $4,000
Lowest personal tax rate D      16%
C x D E $640.00
Tax Credit = E x 94%   $601.60

Example of calculation for a 65 year old for the taxation year 2016, when income testing begins:

Experienced Worker Tax Credit 2016 - Age 66

Eligible work income A $40,000
Less base amount B 5,000
Net amount   $35,000
Lower of net amount and maximum for 2016 C $6,000
Lowest personal tax rate D      16%
C x D E $960.00
E x 94% F $902.40
Eligible work income G $40,000
Less reduction threshold(1) H 33,505
G - H (zero if negative) I 6,495
Reduction rate J        5%
Reduction I x J K $324.75
Tax Credit F - K   $577.65

(1) The reduction threshold used is the threshold for calculating the tax credit for a person living alone, for age and for retirement income.  The above threshold of $33,505 is the 2016 amount, which is indexed annually.

The rate used for the year to calculate the deduction for workers is 6%, or .06.  This rate is used to calculate the factor of 94%, which is equal to 1 - .06, or 0.94.

If any portion of the tax credit for experienced workers is unused, it cannot be carried over to another year, and it cannot be transferred to the individual's spouse.

Resources:

Revenu Quebec - Tax credit for experienced workers

2016-2017 Budget Plan - Additional Information on Fiscal Measures (pdf) - see page a.24

2015-2016 Budget Plan - Additional Information on Fiscal Measures (pdf) - see page a.6

2013-2014 Budget Plan (pdf) - see page H.51 re indefinite deferral of increase to excess earned income cap

2011-2012 Budget Plan (pdf) - see page J.3

Revised: September 20, 2017

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