Net income, reported on line 23600 of the T1 General return, is the figure most income-tested benefits and credits use. It equals total income (line 15000) minus deductions including RRSP contributions, union and professional dues, child care expenses, employment expenses, and certain other items.
Why net income matters
Net income drives:
- OAS recovery tax (clawback) — 15% of net world income above the annual threshold ($95,323 for 2026)
- GIS calculation (non-OAS net income reduces GIS at approximately 50%)
- AFNI calculation (used for CCB, GST credit, provincial benefits)
- Most non-refundable credit phase-outs (DTC supplement, age credit, medical expense floor)
Reducing net income
RRSP contributions, child care expenses, union dues, and certain other deductions reduce net income. TFSA withdrawals are NOT income and do not affect line 23600. Strategically using RRSPs and TFSAs in retirement can keep net income below benefit clawback thresholds.