When filing your taxes, there are numerous personal tax credits available that will help you offset the federal (and sometimes provincial) taxes owing on your tax return. We previously discussed how tax credits affect your balance owing. In this posting we will be providing you with some relevant information about a few of these tax credits.
Please note that technical data below has been taken from the Canada Revenue Agency Website at the following link:
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/menu-eng.html
Amount for children born in 1995 or later
You can claim $2,191 for each of your or your spouse’s or common law partner’s children who are under 18 years of age at the end of the year.
You may be able to claim the family caregiver amount for each child with an impairment in physical or mental functions.
The full amount can be claimed in the year of the child’s birth, death, or adoption.
Child lives with both parent.
If the child resides with both parents throughout the year, either you or your spouse or common-law partner can make the claim.
Note
If you are making this claim for more than one child, either you or your spouse or common-law partner must make the claim for all children under 18 years of age at the end of the year and resided with both of you throughout the year.
Child does not live with both parents
If the child did not reside with both parents throughout the year, the parent or the spouse or common-law partner who claims the amount for an eligible dependant (read line 305) for that child, can make the claim.
Note
You can still claim this amount for the child if you were unable to claim the amount for an eligible dependant because:
• the child’s net income was more than $10,822;
• you are already claiming the amount for an eligible dependant for another child; or
• another individual in your household has already claimed the amount for an eligible dependant (other than the child).
Shared custody of a child
If you have shared custody of the child throughout the year, the parent who claims the amount for an eligible dependant (read line 305) for that child, can make the claim.
If you have shared custody of the child throughout the year but cannot agree who will claim the amount, neither one of you can make this claim.
If you and another person were required to make support payments for the child in 2012 and, as a result, no one would be entitled to claim either this amount or the amount for an eligible dependant for the child, you can still claim this amount as long as you and the other person(s) paying support agree you will be the one making the claim. If you cannot agree who will claim this amount for the child, neither of you can make the claim.
Completing your tax return
Enter the number of children for whom you are not claiming the family caregiver amount (FCA), in box 366 (above and to the left of line 367 on Schedule 1, Federal Tax). For children for whom you are claiming the FCA, enter the number of children in box 352(beside and to the left of line 367). Enter the result of the calculation on line 367.
Amount for infirm dependants age 18 or older
If you are eligible for this amount, you can claim an amount up to a maximum of $6,402, which includes the $2,000 family caregiver amount, for each of your or your spouse’s or common-law partner’s dependent children or grandchildren if that person had an impairment in physical or mental functions and was born in 1994 or earlier.
CPP or QPP contributions through employment
Your Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) contributions are shown inboxes 16 and 17 of your T4, Statement of Remuneration Paid slip.
For 2012, the maximum amount of CPP or QPP contributions you are able to enter online 308 of your Schedule 1, Federal Tax, is $2,306.70 if you resided outside Quebec on December 31, 2012, and $2,341.65 if you were a resident of Quebec on December 31, 2012.
CPP or QPP contributions on self-employment and other earnings
This amount is the same amount that you claim on your return at
Line 222 – Deduction for CPP or QPP contributions on self-employment and other earnings.
To make Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) contributions onself-employment and other earnings, see line 222.
Completing your tax return
On line 310 of Schedule 1, Federal Tax, enter, in dollars and cents, the same amount you claimed on line 222 of your return.
Remember to claim the corresponding provincial or territorial non-refundable tax credit online 5828 of your provincial or territorial Form 428.
Employment insurance premiums through employment
The employment insurance premiums you pay are based on your insurable earnings. Your insurable earnings are shown in box 24 of your T4, Statement of Remuneration Paid slips for 2012 (or box 14 if box 24 is blank).
For 2012, the maximum amount of premiums you are able to enter on line 312 of yourSchedule 1, Federal Tax, is $839.97 if you were not a resident of Quebec onDecember 31, 2012, and $674.73 if you were a resident of Quebec onDecember 31, 2012, and work only in Quebec during the year.
For more information about how to report your employment insurance premiums, seeLine 312 – Employment insurance premiums – Examples.
Completing your tax return
If you were not a resident of Quebec on December 31, 2012:
• Claim, in dollars and cents, at line 312 of your Schedule 1, the total of the amount shown in box 18 of all your T4 slips. If you contributed to a provincial parental insurance plan (PPIP) in 2012, also include the total of the amount shown in box 55 of all your T4 slips on this line. Do not enter more than $839.97. Attach to your paper return a copy of your Relevé- 1 Slip, Employment and other income your employer sent you.
• If you contributed more than $839.97, enter, in dollars and cents, the excess contribution on line 450 of your return. We will refund this overpayment to you or use it to reduce your balance owing.
If you were a resident of Quebec on December 31, 2012:
• Under proposed changes, if you worked only in Quebec during the year, claim at line 312 of your Schedule 1, in dollars and cents, the total of the amount shown inbox 18 of all your T4 slips. Do not enter more than $674.73. If you contributed more than $674.73, enter, in dollars and cents, the excess contribution on line 450 of your return. We will refund this overpayment to you, or use it to reduce your balance.
• If, during the year, you worked outside Quebec and your employment income is $2,000 or more, you must complete Schedule 10, Employment Insurance (EI) and Provincial Parental Insurance Plan (PPIP) Premiums, and attach it to your paper return. Claim, at line 312 of your Schedule 1, in dollars and cents, the lesser of your EI premiums from line 18, and line 19 of Schedule 10.
Remember to claim the corresponding provincial or territorial non-refundable tax credit online 5832 of your provincial or territorial Form 428.
Insurable earnings
This is the total of all earnings on which you pay EI premiums. These amounts are shown inbox 24 of your T4 slips for 2012 (or box 14 if box 24 is blank).
You may have an overpayment of your premiums even if the total is $839.97 or less (if you were not a resident of Quebec) or $674.73 or less if you were a resident of Quebec.This can happen when your insurable earnings are less than the total of all amounts in box 14 of all your T4 slips. You can calculate your overpayment using Form T2204, Employee Overpayment of 2012 Canada Pension Plan Contributions and 2012 Employment Insurance Premiums. If you were a resident of Quebec and had to completeSchedule 10 because you worked outside Quebec, do not use Form T2204. Calculate the overpayment by completing Part C of Schedule 10.
If your insurable earnings are $2,000 or less, we will refund all of your premiums to you or use them to reduce your balance owing. In this case, do not enter any premiums online 312. Instead, enter the total on line 450 of your return.
Employment Insurance premiums on self-employment and other eligible earnings
Self-employed individuals can choose to pay Employment Insurance (EI) premiums to be eligible to receive EI special benefits. For more information, contact Service Canada.
Completing your tax return
If you have entered into an agreement with the Canada Employment Insurance Commission through Service Canada to participate in the EI program for accesss to EI special benefits, you must complete Schedule 13 to calculate your premiums payable.
Enter the amount from line 10 of your Schedule 13 on line 317 of your Schedule 1 and online 430 of your return.
Remember to claim the corresponding provincial or territorial non-refundable tax credit, online 5829 of your provincial or territorial Form 428.
If you would like more information on the above we would gladly be able to assist you with your needs.
