Lower your tax bill using an Insurance Company GIC

IF YOU ARE 65 OR OLDER AND DO NOT HAVE INCOME FROM A RRIF OR PRIVATE PENSION PLAN THERE IS ANOTHER VECHICLE TO TAKE ADVANTAGE OF THE $2000 PENSION INCOME TAX CREDIT.

The pension tax credit of $2000 can normally only be used against income which comes from a company pension or a Registered investment such as a RRIF. 

Non- registered money invested in an insurance company GIC is reported as annuity income, therefore it qualifies for the $2000 pension income tax credit. If you have non registered money with a financial institution and collect interest, it is fully taxable at your marginal rate.

By using that money to buy an GIC with an insurance company you can receive $2000 interest tax free by using the $2000 pension income deduction. At a marginal rate of 30% that results in  $600.00 more dollars in your pocket.

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