What Tax Credits and Deductions Can Be Claimed on a Deceased Person's Final Return in Canada?
This answer covers Canadian federal tax law, which applies in every province.
Many of the usual credits still apply on the final return. Credits on lines 30000 to 30450 and 30500, including the age amount, can be claimed in full on each return filed, not prorated for the year of death. The exception is a person who was resident in Canada for only part of the year: the personal amounts are then prorated by days of Canadian residence divided by days in the year.
Some claims have limits. The disability amount claimed across all returns cannot exceed the allowable amount for the calendar year. Donations on the final return are limited to 100% of net income on line 23600. Medical expenses can cover any 24-month period that includes the date of death, if not claimed elsewhere. Funeral expenses, probate fees and estate administration fees are not deductible.
If you use optional returns, the total of the claims across the final and optional returns cannot be more than would have been allowed if only the final return were filed. Which combination saves the most tax depends on the facts, so a lawyer or accountant can help.
Key takeaways
- Credits on lines 30000 to 30450 and 30500, including the age amount, are claimed in full on each return and are not prorated for the year of death.
- Personal amounts are prorated by days of Canadian residence only if the deceased was resident in Canada for part of the year.
- The disability amount claimed across all returns cannot exceed the allowable amount for the calendar year.
- Canada Workers Benefit is claimed on line 45300 of the final return, and funeral expenses, probate fees and estate administration fees are not deductible.