In 2012, the full age amount you can claim on line 301 on Schedule 1 is $6,720 giving you a tax credit of $1,008. However, the age amount you are able to claim is reduced by 15% of your net income (at line 236 of your tax return) in excess of $33,884. The age amount will work out to zero at an income of $78,684. That means you are not entitled to any age amount if your net income reached $78,684 level. These amounts are indexed annually, so they change year by year.
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An Example
John turned 65 in 2012. His income for the year (at line 236 of his return) is $50,000. His age amount is reduced by $2,417.40 calculated by (50,000-33,884) x 15%. This means he can claim $4,302.60 ($6,720 – $2,417.40) on line 301 on schedule 1 of his tax return as his age amount. This gives him a federal tax saving of $645.39 ($4,302.60 x 15%).