Taxes and Your Pension
Are you aware of how income tax is applied to your pension? Read on to learn more.
Calculation of Income Withholding Tax
The Income Tax Act specifies that pension income from employer-sponsored pension plans is taxable income.
To calculate the tax amount to be withheld, ATRF uses the formula specified by Canada Revenue Agency (CRA) or for those members living in Quebec, Revenu Quebec. We also use the information from the last federal and provincial Personal Tax Credits Return (TD1) and source deductions return for members that live in Quebec (TP-1015.3-V), along with any Request for Additional Income Tax forms we have received from you.
Because income tax regulations and personal circumstances vary, ATRF does not provide taxation counselling. Please contact your tax adviser or the nearest District Taxation Office of CRA (Revenu Quebec) to obtain any tax law interpretations.
If you need to report any changes to us, refer to “Changing Tax Information” below.
Changing Tax Information
Income tax is deducted from each pension payment, with the amount based on one of the following:
- The CRA Personal Tax Credit Return called the TD1,
- The Source Deductions Return for Quebec residents called the TP-1015.3-V,
- or the Non-Resident Tax Return for non-residents.
The TD1 form can be obtained from the CRA and the TP-1015.3-V from Revenu Quebec. Alternatively, you may update your forms and submit them electronically through ATRF’s online member portal MyPension.
You may file with ATRF at any time if your circumstances change; for example, if you start receiving rental income, or some other form of income. If you would like additional tax deducted (e.g., if taxable income from other sources does not have tax deducted at source), you can make the request using the Request for Additional Income Tax form.
To change your tax information, you may send a completed tax form to:
- Alberta Teachers’ Retirement Fund
500 Barnett House 11010 142 ST NW
Edmonton, AB T5N 2R1 Canada,
- Fax it to: (780) 453-3547, or
- Select the MyPension icon to sign in and make the change on our secure member site.
Income Tax Information Slips (T4A, NR4, and RL-2)
The CRA and Revenu Quebec require that all income tax information (T4A/NR4/RL-2) slips are mailed by February 28 of each year. ATRF typically mails them in early February.
Use MyPension to Access Tax Slips
Pension recipients who are registered for MyPension are able to view/print their income tax information slips sooner by accessing the site in early January. Prior year tax slips can also be accessed at any time.
You can also update your communication preferences in MyPension to receive notifications when your tax information is available and indicate if you don’t want to receive a hard copy through the mail.
OAS & CPP
Your ATRF pension benefit is not affected if you apply for or start to receive Canada Pension Plan (CPP) and/or Old Age Security (OAS) benefits. This is true even if you are receiving the Advance & Reduction Option.
Income Tax Calculator
Taxes are an important consideration whenever you are making decisions about your pension, so you may want to use tools like this income tax calculator to determine what the impacts of changes might be.
Please note: This calculator is provided by a third party and the information it provides is not verified by ATRF.