Tax Changes Equal Savings for Pensioners
By law, HOOPP is required to deduct taxes from your monthly pension payment. In December 2007, the federal government announced the following tax changes which may be of interest to HOOPP pensioners:
- Basic personal amount increased: The basic personal amount will be increased to $9,600, retroactive to Jan. 1, 2007, and will increase again to $10,100 on January 1, 2009. This will result in reduced tax deductions for all HOOPP pensioners.
- Lowest personal income tax rate reduced from 15.5% to 15%: A 0.5 per cent reduction in the lowest tax bracket, retroactive to Jan. 1, 2007, will also result in reduced tax deductions for pensioners.
| Income | 2008 Tax Savings (approx.) |
|---|---|
| $15,000 - $30,000 | $180 |
| $45,000 - $60,000 | $400 |
| $80,000 - $100,000 | $600 |
Other tax changes may have also been approved by certain provincial governments to take effect Jan.1, 2008.
If affected by these changes, you will have seen a change in your March 2008 pension payment. Any tax implications resulting from the changes applied retroactively to January 1, 2007 will be reflected when you file your 2007 tax return. The tax reduction for January and February 2008 will be addressed when you file your 2008 tax return.
March 2008
