Tax Returns: A Pitfall That Lurks for Retirees

When you are retired and need to file your tax return, it is important not to confuse the "taxable net" amount with the "net amount payable" for your retirement pension.
 

The "net amount payable" is the pension actually deposited into your bank account, before withholding tax is deducted. However, this is not the amount that should be entered in boxes 1AS and following on your tax return.
The “net taxable” amount is the figure the tax authorities use as a basis for calculating your household’s income tax. This figure includes the “non-deductible” CSG, which generally makes it higher than the “net amount payable.” It is virtually impossible to perform this calculation yourself, which is why it is done directly by the pension funds.
 

To determine the net taxable amount of your retirement pension, you should rely on the calculations provided by the pension funds. You can find this amount on your pension statements, which are generally available in your personal account on your pension fund’s website. If you have lost the password needed to access this account, you will need to contact the pension fund directly.
 

In many cases, retirement benefits are pre-filled on tax returns. Errors are rare, so you can trust the information provided. However, if you have any doubts, you should compare the amounts listed with those shown on your pension statements under the "taxable net" category.
 

It is important not to adjust the amount shown based on the amounts received in your checking account, as this will inevitably result in an error. The amounts received correspond to the "net amount payable," not the "net taxable amount."
 

To file your tax return correctly as a retiree, you must use the "net taxable" amount of your retirement pension, which you can find on your pension statements or in your personal account on your pension fund's website.