TAX CLINIC GUIDELINES
2015
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Table of Contents
What to Bring With You to the Clinic.................................................................................. 1
Preparation for Clinics............................................................................................................... 1
Income Limitations..................................................................................................................... 2
What Is New This Year?............................................................................................................ 2
Senior Citizens............................................................................................................................. 3
Deceased Taxpayers..................................................................................................................6
Disability Amounts.....................................................................................................................6
Families with Children............................................................................................................... 7
Other Personal Income Tax Reminders..............................................................................9
Other Clinics................................................................................................................................13
Other Financial Assistance.....................................................................................................13
Tax Clinic Guidelines
FEBRUARY 2015
What to Bring With You to the Clinic
You may be expected to supply the following at the tax clinics:
1. Computer, Intuit software, printer, and paper, if applicable
For 2014 returns, Intuit has agreed to provide our volunteers with a copy of ProFile
tax software for use at the Tax Clinics.
2. Tax forms
Probably the easiest way to ensure you have the necessary forms is to take an
adequate supply of the 2014 general tax guides and/or returns. They are available
at all postal outlets as well as directly from the Canada Revenue Agency (CRA).
Canada Revenue Agency no longer mails out the general tax guides and returns to
taxpayers unless it is specifically requested. Return envelopes are not included with
the general tax guides/returns, but are available separately.
As many seniors are eligible for the Disability Tax Credit, you should bring additional T2201, Disability Tax Credit Certificate forms. All tax forms are available
at www.cra-arc.gc.ca.
3. Income Tax Act
The General Income Tax Guide 2014 will have answers to most of the questions that may arise when preparing the return. It is cross-referenced to the
specific lines on the tax return.
Another reference source may be the 2015 edition of CCH’s “Preparing your
Income Tax Returns”.
4. Pencils, paper, calculator, stapler and staple remover, white-out, etc.
5. Canada Revenue Agency Guides:
• General Income Tax Guide 2014
• Newcomers to Canada (T4055)
• Emigrants (T4056)
• RRSPs and Other Registered Plans for Retirement (T4040)
• Capital Gains (T4037)
• Disability Supports Deduction (T929)
• Child Benefits Application (RC66)
• Child Care Expenses Deduction (T778)
6. Canada Revenue Agency Questions and Answers
• Are you an international student studying in Canada
Preparation for Clinics
Experience at the tax clinics has shown that most tax returns are not complicated
or difficult. Most of the tax clinics’ clients are senior citizens or recent immigrants to
Canada with relatively low incomes. Because these individuals’ tax positions may not
be representative of those usually encountered in practice, this document outlines
some of the non-routine issues you may encounter at the clinics.
2015 TAX CLINIC GUIDELINES 1
Income Limitations
Institute policies for Tax Clinics prevent preparation of tax returns where gross
incomes exceed the following amounts*:
Total income per household unit for taxpayer:
With no dependant:
$30,000 or less
With dependants:
$50,000 or less
*and individuals who have self-employed income, real estate holdings, and/or large
amounts of savings/investments.
What is New this Year?
Changes in Personal Amounts
The 2014 personal amounts are as follows:
Basic personal amount—federal.........................................................$11,138
Basic personal amount—Alberta...................................................... $17,787
Spousal/Eligible dependant—federal...............................................$11,138
(No Income threshold before reduction of credit)
Spousal/Eligible dependant—Alberta............................................ $17,787
Age amount (if born 1948 or earlier)—federal............................. $6,916
Age amount (if born 1948 or earlier)—Alberta ...........................$4,957
Family Tax Cut NEW!
Starting in 2014, for eligible couples with one or more minor children, a non-refundable
tax credit of up to $2,000 may be claimed based on the net reduction of federal tax
that would be realized upon a transfer of up to $50,000 of taxable income from a higher income spouse to a lower income spouse. Schedule 1A must be completed, with the
amount calculated to be entered on line 423 of Schedule 1. Only one spouse may claim
the Family Tax Cut, though, if the taxpayer and a former spouse have joint custody of
a minor child, and each one has an eligible spouse or common-law partner for the year,
they both may claim the credit. Claiming the tax credit does not change the actual net
and taxable income reported by each spouse. You cannot claim the Family Tax Cut if
you or your spouse has elected to split eligible pension income in the year.
Emergency Services Volunteers NEW!
The rules for claiming the $1,000 exemption for emergency services volunteers have
changed. The T4 slips issued will generally report only the taxable part of the income
received, which is the portion exceeding the $1,000 exemption (shown in box 87). The
$1,000 income exemption and the $3,000 tax credit cannot both be claimed. If the
credit is being claimed instead of the exemption, the sum of the amounts in boxes 14
and 87 must be reported on line 101.
Emergency Services Volunteers include Search and Rescue volunteers starting in
2014, in addition to the Volunteer Firefighters previously who were previously allowed
the exemption or tax credit.
Lifetime Capital Gains Exemption Increased NEW!
The lifetime capital gains exemption limit has increased to $800,000 for dispositions
of qualified small business shares and qualified farm and fishing property occurring
after 2013.
2 2015 TAX CLINIC GUIDELINES
Children’s Fitness Amount Increased NEW!
The maximum amount of eligible fitness fees for each child has increased to $1,000
starting in 2014.
Adoption Expenses Increased NEW!
The maximum amount of eligible adoption expenses has increased to $15,000 for each
child.
Medical Expenses NEW!
There are new additions to the list of eligible medical expenses. Starting in 2014,
the cost to design personalized therapy plans for those eligible for the disability tax
credit, and the costs for service animals used to help manage severe diabetes are now
eligible as medical expenses.
GST/HST Credit Application NEW!
Taxpayers no longer have to apply for the GST/HST credit. CRA will determine eligibility when the tax return is filed.
First Time Donor’s Super Credit Reminder!
For 2013 to 2017, a first-time charitable donor can claim an additional tax credit for up to
$1,000 of cash donations made after March 20, 2013. The credit is 25% of the donation
amount and is in addition to the donation tax credit already allowed. To qualify as a firsttime donor, no charitable donation tax credit may have been claimed for 2008 to 2013
by either the taxpayer or spouse or common-law partner. The donation is reported on
line 343 of Schedule 9.
Government of Canada is Phasing out Cheques Reminder!
The Government of Canada will be phasing out cheques by April 2016. Taxpayers may
wish to initiate direct deposit for their tax refunds and other government program
payments. This can be done by completing the “Direct deposit – Start or change” section on page 4 of the income tax return.
Senior Citizens
Foreign Pension Income
There may be special deductions if a pension is received from a foreign country. According to the 2014 guide, for item Line 115 do the following:
a) Report the total amount of the pension income, in Canadian dollars, on line 115 (attach a note to the return identifying the type of pension and the source country).
b) If the pension is tax-free under a tax treaty, claim an offsetting deduction on line 256
(per S.110(1)(f)). If not known, do not make a claim, but include a note with the return
asking CRA to give the deduction, if available.
c) If the amount received is U.S. Social Security, claim a deduction on line 256 equal
to 15% of the amount reported on line 115. There should not be U.S. tax withheld.
If the taxpayer has been a resident of Canada, and has received U.S. Social Security benefits continuously from before January 1, 1996, the deduction on line 256
is increased to 50% of the amount reported on line 115.
Individuals receiving US Social Security payments are typically US Citizens and
are required to file a US Income Tax return. They may also be required to file a
Foreign Bank Account Report (FBAR), irrespective of their country of residence.
Those who do not file these returns may be subject to significant penalties. Any
US Citizens encountered during the tax clinic program should be reminded of this
requirement.
2015 TAX CLINIC GUIDELINES 3
The average exchange rates for 2014 provided by CRA are:
Canada—U.S.
$1 Cdn. = $.90541 U.S.;
$1 U.S. = $1.10446640 Cdn.
Canada—U.K.
$1 Cdn. = 0.54974 pounds;
1 pound = $1.81903120 Cdn.
Old Age Security
According to the Service Canada’s website, Old Age Security payments for
2014 were:
January–June
$551.54/mo;
July–September
$558.71/mo;
October–December $563.74/mo.
(maximum $6,676.59)
Net Federal Supplements
Net Federal Supplements (which include the Guaranteed Income Supplement (GIS)
and spousal allowance) are not taxable, but must be reported on line 146 of the T1
Special or General, with an offsetting deduction on line 250.
Canada Pension Plan (CPP) Contributions
Effective January 1, 2012, employees or self-employed taxpayers age 60 to 70 years,
who are receiving CPP or QPP retirement pension, must still contribute to CPP or QPP,
unless they are at least 65 years of age and they elect (or have elected) to stop contributing. The election is done by completing Form CPT30, Election to Stop Contributing to
the Canada Pension Plan or Revocation of a Prior Election.
Deferring Old Age Security Pension (OAS)
Effective July 2013, OAS benefits may be deferred for up to 5 years after eligibility by
delaying the application for OAS. The monthly pension payment is increased by 0.6% for
every month it is delayed up to a maximum of 36% at age 70. The Guaranteed Income
Supplement and spousal allowance cannot be received for the period during which the
OAS is deferred.
If a recipient of OAS pension benefits wishes to, they may request cancellation of the
OAS pension to take advantage of the deferral of benefits, but only if they provide a
written request to Service Canada within six months of receiving their first payment. In
this case, the full amount of OAS pension and related benefits must be repaid.
Pension Income Splitting
Taxpayers reporting pension (not including CPP), annuity, or RRIF income may
jointly elect with a spouse (including common-law) to split the income, if both were
Canadian residents on December 31, and they were not separated. Form T1032, Joint
Election to Split Pension Income, must be completed for both spouses and is to be
attached to their paper returns. The taxpayer receiving the pension income reports
the income according to the T4A or T4RIF slip, and then claims a deduction on line
210, Deduction for Elected Split-pension amount. The other spouse reports the splitpension amount from line E of Form T1032, on line 116 of the tax return. Both spouses
may then claim the Pension Income amount on line 314 of Schedule 1 and on Alberta
Schedule 428, according to the calculation in Step 4 on Form T1032.
CPP can only be split at source. If a CPP recipient and spouse are interested in sharing
their CPP retirement benefits, they may apply to Service Canada by completing and
submitting the application form. The form can be obtained from the Service Canada
website, www.servicecanada.gc.ca, or by calling to request it at 1-800-277-9914. The
applicants will need their Social Insurance Numbers and original marriage certificate
or proof of a common-law relationship.
4 2015 TAX CLINIC GUIDELINES
Social Benefits Repayment
If net income exceeds $71,592 in 2014, some of the OAS will be “clawed back.”
However, none of the tax clinic patrons should be at this income level.
Age Amount
Taxpayers age 65 or older at December 31, 2014 may claim an age tax credit in the
amount of $6,916 for 2014. Any unused credit is eligible to be transferred to a spouse.
For 2014, the credit is reduced by 15% of income over $34,873 (for the Alberta calculation, the age amount credit of $4,957 is reduced by 15% of income over $36,898).
Pension Income Amount
Pension income may be received from a variety of sources, some of which may
be eligible for the S.118(3) pension income amount. The maximum pension income amount credit is $2,000 federal and $1,370 for Alberta. Please note:
a) payments received from the CPP, OAS pension, net federal supplements (box 21 on the
T4A (OAS)), QPP payments, retiring allowances or death benefits are not eligible for
the credit.
b) if the taxpayer does not need all of the pension tax credit to reduce federal income tax
to zero, the unused amount can be transferred to the taxpayer’s spouse. Alternatively,
if the taxpayer’s spouse has an unused pension credit, it may be transferable to the
taxpayer.
c) only pension or annuity income reported on line 115 or 129 qualifies for
the pension income amount.
Medical Expenses and Refundable Medical Expense Supplement
Many seniors and their spouses incur significant medical expenses. We suggest
that you familiarize yourself with this area before beginning your tax clinic. (The
2014 General Income Tax Guide is helpful.) If the combined total of taxpayer’s
and spouse’s net income is less than $48,546 (or less than $25,506 for single
taxpayers), and they have incurred medical expenses in excess of the 3% income
threshold, or are claiming the Disability Supports Deduction, complete the chart
in the Federal Worksheet for line 452, Refundable Medical Expense Supplement,
which is included in the 2014 Forms guide, to calculate whether they are eligible.
Line 330 is used only for reporting medical expenses for self, spouse or common-law partner, and dependant children born in 1997 or later. Medical expenses for other dependants
are to be reported on line 331, with a reduction for each “other dependant,” of $2,298 or
3% of line 236 per that dependant’s tax return (whichever is less).
Additional medical expenses may be deducted for costs associated with real-time
captioning, note-taking services, and voice-recognition computer software that are
necessary because of a person’s speech, hearing, medical or physical impairment.
Note that the costs for services must be paid to someone in the business of providing such services. A medical practitioner’s written certification is required for the
deduction of note-taking services and voice-recognition computer software.
Medical expenses include amounts to purchase, operate and maintain certain
medically prescribed devices (auditory feedback, electrotherapy, standing
and pressure pulse therapy devices, blood coagulation monitors).
Also, medical expenses include the cost for the design of personalized
therapy plans for taxpayers eligible for the disability tax credit, and the cost
for service animals used to help manage severe diabetes.
The additional cost of acquiring gluten-free food as compared to the cost of similar
non- gluten-free food is deductible as a medical expense if a medical practitioner provides written certification that the person requires the special diet for celiac disease.
2015 TAX CLINIC GUIDELINES 5
Deceased Taxpayers
A final return is required to be filed for the period from January 1 of the year of death
to the date of death. This return is due by the later of April 30 of the year following the
year of death, or six months after the date of death.
Pension payments prior to death are included in the deceased taxpayer’s return. Lump
sum payments after death will normally be taxed in the hands of the recipient who
may be either a beneficiary (spouse or child) or the estate.
NOTE: Estates and final return issues can be very complex. Use your judgment in
recommending more in depth assistance from professionals who practice in this area.
Disability Amount
Some individuals (any age) may be eligible for the “disability” tax credit. Form T2201,
Disability Tax Credit Certificate (Certificate), is required to be completed and attached
to the income tax return, the first year the claim is being made or if the certified
period ended before 2014.
If the taxpayer was allowed a disability amount in 2013, and the impairment was
permanent, it is not necessary to file another Certificate unless the circumstances change or CRA advises otherwise.
Part B of the Certificate needs to be completed and signed by a doctor, optometrist,
audiologist, occupational therapist, psychologist or speech-language pathologist.
Only forms with original signatures are accepted. It is recommended to have copies
of the most recent form available to provide to taxpayers.
A disabled individual who claims the Disability Tax Credit may also claim the Disability Supports Deduction at line 215 if the expenses enable the individual to earn
income or go to school. The Disability Supports Deduction includes attendant care
expenses and other paid disability expenses such as sign language interpretation services. In this case, Form T929, Disability Supports Deduction, should be completed to
support the Disability Supports Deduction from net income. No receipts are required
to be filed but should be kept by the individual. Note that the Disability Supports
Deduction cannot be claimed on line 215, if the taxpayer or someone else will be
claiming the amount as a medical expense on line 330 or 331.
The Disability Tax Credit cannot be claimed if the individual, or any other person,
claims medical expenses for a full-time attendant or for care in a nursing home
because of the individual’s mental or physical impairment. Generally, you will require
at least $7,766 in these types of expenses before you would claim them as medical
expenses instead of the disability amount. However, claiming medical expenses for a
part-time attendant will not affect the ability for the individual to also claim the Disability Tax Credit.
To be eligible for this credit, the taxpayer must have a severe and prolonged (at least
12 months) mental or physical impairment, and must be markedly restricted in their
ability to perform basic activities of daily living (seeing, walking, speaking, perceiving, thinking and remembering, hearing, feeding and dressing, and eliminating bodily
waste) or must require life-sustaining therapy to support a vital function (such as
kidney dialysis) at least three times per week, requiring an average of at least 14
hours per week to receive.
If the taxpayer has a completed Certificate, indicating that the disability began in a
year prior to the tax year and no prior claim has been made, a T1 Adjustment Request
may be filed, for each of the applicable years, to claim the credit. The completed
Certificate must accompany the T1 Adjustment Request.
6 2015 TAX CLINIC GUIDELINES
Families with Children
Universal Child Care Benefit (UCCB)
The Universal Child Care Benefit (UCCB) of $100 per month, per child under 6 years
of age, is taxable. The benefit commenced July 2006 and is reported in box 10 of the
RC62 slip. It must be reported on line 117 by the spouse with the lower net income.
A single parent can choose to include all UCCB amounts received in the year in
the income of a dependant. All of the UCCB amount may either be included in the
income of the dependant for whom the amount for an Eligible Dependant is being
claimed, or, if there is no claim for an Eligible Dependant, it may be included in the
income of a child for whom the UCCB was received. If the parent chooses to include
the UCCB amounts in the income of a dependant, the box 10 amount from the RC62
slip is reported on line 185 and no amount is entered on line 117. If the parent chooses
to include the UCCB amount in their own income, it is reported on line 117.
If a taxpayer wants information regarding application for the UCCB, provide them
with form RC66, Child Benefits Application if they are not already receiving the benefit and have not previously applied for the Child Tax Benefit.
Child Tax Benefit (CTB)
The Child Tax Benefit (CTB) is non-taxable, and is paid to the primary care-giver of a
child under 18 years of age. The amount paid is based on the number of children, the
family’s net income reported for the prior year, the province of residence, and whether
the child is eligible for the disability amount. A taxpayer may apply for the CTB by
completing form RC66, Child Benefits Application.
Starting July 2011, each eligible parent who is sharing custody of a child will receive half
of the CTB amount for that child every month that the child qualifies. A parent eligible
to receive CTB payments must notify CRA of any change in marital status by the end of
the month following the change. In the event of separation, notification is required to
be filed with CRA after more than 90 consecutive days of separation.
Eligible Dependant Tax Credit
Single parents may be able to claim an Eligible Dependant Tax Credit for a child. The
maximum claim for 2014 is $11,138 and is reduced by the child’s net income. See Guide
item Line 305 and claim on Schedule 1.
Child Care Expenses
Parents may be eligible to claim child care expenses. Usually, the spouse with the
lower net income must claim the expenses. Child care expenses of up to $7,000
may be claimed for each child who was under the age of 6 years at some time in
2014, up to $4,000 if under the age of 16 years at some time in 2014, and up to
$10,000 may be deducted for a child who qualifies for the disability amount. Form
T778, Child Care Expenses Deduction must be completed to make the claim. See
Guide item Line 214 for more information.
Child Support
In separation or divorce, for agreements settled or re-negotiated after April 30, 1997,
child support payments are neither taxable to the recipient nor deductible by the payor.
Amount for Children Born in 1997 or Later
The taxpayer or spouse may claim $2,255 for each child less than 18 years of age at the
end of 2014, on line 367 on Schedule 1. The full amount can be claimed in the year the
child was born or adopted, or died. Either spouse may claim the amount if the child
resided with both parents throughout the year. The parent who claims the amount
for an Eligible Dependant can claim this amount if the child does not reside with both
parents. There is no equivalent provincial claim.
2015 TAX CLINIC GUIDELINES 7
Family Caregiver Amount
A taxpayer who has a dependant with impairment in physical or mental functions
may be eligible to claim an additional amount of $2,058 for one or more of:
• The spouse or common-law partner amount (line 303);
• The amount for an Eligible Dependant (line 305);
• The amount for children born in 1997 or later (line 367); and
• The Caregiver Amount (line 315).
Children’s Fitness Amount
Fees paid in 2014 relating to the cost of registering a child under the age of 16
years (or under the age of 18 years if eligible for the disability amount) at the
beginning of 2014, in a prescribed program of physical activity, may be claimed
to a maximum of $1,000 per child. For a child with disabilities, an additional $500
may be claimed for certain fees paid. The claim is made on line 365 on Schedule 1.
Receipts need not be filed with the return but should be retained by the taxpayer
to support the claim.
Children’s Arts Amount
Fees paid in 2014 relating to the cost of registration of membership of a child
under the age of 16 years (or under the age of 18 years if eligible for the disability
amount) at the beginning of 2014, in a prescribed program of artistic, cultural,
recreational, or developmental activity, may be claimed to a maximum of $500 per
child. For a child with disabilities, an additional $500 may be claimed for certain
fees paid. See Guide item Line 370 for information regarding prescribed programs.
The claim is made on line 370 on Schedule 1. Receipts need not be filed with the
return, but should be retained by the taxpayer to support the claim.
Adoption Expenses
Certain expenses related to the adoption of any child under the age of 18 years may
be deducted at line 313, up to a maximum of $15,000. These expenses may be split between two adoptive parents, and may be claimed in the tax year that includes the end
of the adoption period in respect of the child. For adoptions finalized in 2013 and subsequent years, the adoption period has been extended to begin when an application is
made either for registration with a provincial or territorial ministry responsible for adoption, or to a Canadian court, whichever is earlier. See Guide item Line 313 for details.
Registered disability savings plan (RDSP)
Starting in 2008, taxpayers eligible for the Disability Tax Credit can also be eligible
to have contributions made by or for them to a Registered Disability Savings Plan.
Government matching grants are available, and direct government contributions are
available for low-income taxpayers. Parents may contribute to a plan to provide fora
disabled child; older disabled taxpayers and their families may contribute to a plan
for later years. Contributions are not deductible, but income earned in the plan will
be tax sheltered. You may wish to advise interested eligible taxpayers to contact a
participating financial institution.
8 2015 TAX CLINIC GUIDELINES
Other Personal Income Tax Reminders
1. Employment Insurance (EI) receipts must be included in income. Further, some EI
benefits may be repayable (see instructions in the T1 Guide). If EI benefits were repaid
in 2014, that amount may be deducted in calculating net income.
Adult basic education tuition assistance to cover all or part of tuition paid for primary
or secondary school courses for adults must be included in income. The amount is
indicated in box 20 of the taxpayer’s T4E slip and is included in the total benefits
paid. A deduction may be claimed on line 256 for the amount of qualifying assistance
shown in box 21 of the taxpayer’s T4E slip.
2. The individual may have been resident in another province at December 31, 2014. In
such situations, the Alberta tax schedule is not the appropriate form to complete. Use
the form for the province where the individual resided on December 31, 2014.
3. Moving expenses are deductible according to the rules set out in S.62(1). Form
T1-M must be completed and filed. Receipts need not be sent but should be
retained.
4. Low income individuals may be eligible for the GST/HST credit (S.122.5). Starting
in 2014, individuals no longer have to apply for the credit; CRA will determine
eligibility when the income tax return is filed.
5. Although it is unlikely that any tax clinic patrons will have “alternative minimum tax”
liabilities, watch for tax-sheltered investments.
6. The maximum RRSP deduction for 2014 (other than amounts “rolled over”) is
determined by the individual’s 2014 contribution room. The increase in contribution room from 2013 is generally the lesser of $24,270 and 18% of 2013 “earned
income.” Individuals covered by another deferred income plan reduce this figure by
their 2013 “pension adjustment”. The individual’s 2013 Notice of Assessment should
state the available contribution room for 2014. You should advise individuals with
over-contributions of more than $2,000 to contact CRA to have them determine if
withdrawals should be made. An individual may have withdrawn funds from their
RRSP under the Home Buyers’ Plan. If they have done so before 2014, they must
designate all or a portion of their RRSP contribution for the year as the amount
they are repaying to their RRSP on line 246 of Schedule 7. CRA will have sent a
statement showing equal amounts to repay, but if a lesser amount is designated as
a repayment (i.e. the RRSP contribution for the year is insufficient, or Schedule 7 is
not completed), the difference must be included in income on line 129 of the return.
7. T3, T4PS and T5 slips differentiate eligible and ordinary dividends. Eligible
dividends are grossed up 38%; ordinary dividends are grossed up 18% (previously
25%). Report the taxable amounts on Schedule 4.
8. If the taxpayer is entitled to claim the full-time Education Amount in 2014, scholarship income is excluded from income. If not so entitled, the $500 exemption is still
available. See Guide item Line 130 for details.
9. Certain expenses paid to earn employment income may be claimed on line
229 by filing Form T777, Statement of Employment Expenses along with
Form T2200, Conditions of Employment provided by the employer certifying
that the employee was required to pay these expenses. See Guide item Line
229 and Guide T4044, Employment Expenses for details.
10. The Northern residents deduction is available to residents of prescribed northern
zones and is claimed on Form T2222.
2015 TAX CLINIC GUIDELINES 9
11. For long-haul truck drivers, during eligible travel periods in 2014, meal and beverage expenses incurred are deductible at 80%. An eligible travel period is a period
during which you are away from your municipality or metropolitan area for at
least 24 hours for the purpose of driving a long-haul truck that transports goods
at least 160 kilometers from the employer’s establishment to which you regularly
report to work.
12. All employees are eligible to claim the employment amount, which is the lesser of $1,127
for 2014, and the total employment income reported on lines 101 and 104 of the return.
The claim is made on line 363 of Schedule 1. There is no equivalent provincial claim.
13. The cost of monthly or annual public transit passes (not individual tickets), or shorter
duration passes entitling the user to unlimited travel for at least 20 days in any
28-day period, or electronic payment cards used to make at least 32 one-way trips
during an uninterrupted period not exceeding 31 days, is reported on line 364 of
Schedule 1. The cost of transit passes for the taxpayer, spouse and dependant children under 19 years of age may be combined on one tax return. Receipts need not be
filed with the return, but should be retained by the taxpayer to support the claim.
14. Types of social assistance payments, which may be received, include:
a) federal government (T4A (OAS) slip):
• Guaranteed Income Supplement
• spousal allowance
b) Alberta government (likely received T5007 slip):
• social assistance (welfare)
• widow’s pension
• workers’ compensation
• assured income for severely handicapped (AISH)
• assured income (low income seniors)
These amounts are required to be reported on lines 144, 145 and 146 of the T1,
with an offsetting deduction on line 250.
Items which do not have to be included in income or be “added back” for refundable
tax credit purposes are:
• veteran’s disability and dependant’s pension
• war veteran’s allowance
• social assistance relating to being a foster parent
• social assistance relating to caring for a disabled adult living with you
15. Canada Savings Bonds interest
For regular and compound interest bonds, interest is reported annually as shown
on the T5 slip.
16. Line 232 Other deductions may include:
• Old Age Security benefits that were paid back;
• EI benefits paid back and shown in box 30 of the T4E slip; or
• Legal fees paid for appealing an assessment, for collecting a retiring allowance,
for collecting late support payments, or suing for maintenance payments in a
Family Court.
17. On Line 235 Social benefits repayment, report any amounts of EI or OAS benefits
received in 2014 that the taxpayer is required to pay back. See Guide item Line
235 for conditions under which such repayments are required.
10 2015 TAX CLINIC GUIDELINES
18. See Guide item Line 306 for conditions under which a claim for infirm dependants, age 18 or older, may be made (line 306 of Schedule 1, and line 5820 of
Schedule 428 Alberta).
19. Under the First-Time Home Buyers’ Amount, $5,000 can be claimed for the purchase of a qualifying home made in 2014. The taxpayer must be a first-time home
buyer (neither the taxpayer nor spouse or common-law partner can have owned
and lived in another home in the year of purchase or in any of the four preceding
years), unless eligible for the disability amount or acquiring the home for the benefit
of a related person who is eligible for the disability amount. The claim may be split
between spouses. The claim is made on line 369 of Schedule 1. See Guide item Line
369 for more information.
20. See Guide item Line 315 for conditions under which a claim for Caregiver
Amount may be made (line 315 of Schedule 1 and line 5840 of Schedule 428
Alberta). Schedule 5 must be completed.
21. Complete Schedule 11 to claim tuition paid for courses at the post-secondary level or
those that develop or improve skills in an occupation. To be claimed, fees paid to each
educational institution must be more than $100 for the year. The Education Amount
of $400 for each month in which the taxpayer was enrolled as a full-time student, or
$120 per month for a qualified part-time program, is also calculated on Schedule 11.
A textbook credit is available for students entitled to claim the Education Amount.
The Education Amount cannot be claimed if the taxpayer received a grant or was
reimbursed for the cost of the courses by their employer or a person they deal with
at arms’ length. The credit is claimed on Schedule 11, using the number of months of
attendance indicated on the student’s T2202. Textbook receipts are not required. The
Tuition, Education and Textbook amount claim is made on line 323 of Schedule 1, and
on line 5856 of Schedule 428 Alberta.
These amounts can be transferred to a spouse or parent if they are not needed
to reduce federal income tax to zero. Likewise these amounts can be transferred from a child or spouse to the taxpayer’s return. See Guide item Lines
323 and 324 for details. The Education Amount claimed on line 323 may also
be claimed if the taxpayer received and included in income financial assistance
provided under Part II of the Employment Insurance Act (shown in Box 20 of
the T4E slip) or a labour-market development agreement as part of a similar
provincial or territorial program, or a program developed under the authority of
the Department of Human Resources Development Act. Form T2202, Education
Amount Certificate must be provided.
22. Amounts transferred from a spouse may be claimed by completing Schedule 2
and reporting the amount on line 326 of Schedule 1, and on line 5864 of Schedule 428 Alberta. See Guide item Line 326 for details.
23. A volunteer firefighter or search and rescue volunteer completing at least 200
hours of eligible volunteer firefighting or search and rescue services in the year
can claim a credit of up to $3,000 on line 362 or line 395 of Schedule 1 or an
exemption of up to $1,000. Either the credit or the exemption may be claimed,
not both. The T4 slips issued will generally report in Box 14 only the taxable part
of the income received, which is the portion exceeding the $1,000 exemption. The
income exemption is shown in Box 87. If the credit is being claimed instead of the
exemption, the sum of the amounts in boxes 14 and 87 must be reported on line
101. See Guide item Lines 104, 362 and 395 for details.
2015 TAX CLINIC GUIDELINES 11
24. The charitable donation federal tax credit is 15% of the first $200 plus 29% of
total donations exceeding $200 for the year. The Alberta charitable donation tax
credit is 10% of the first $200 plus 21% of total donations exceeding $200 for the
year. The claim for charitable donations is limited to 75% of net income.
For 2013 to 2017, a first-time charitable donor can claim an additional tax credit
for up to $1,000 of cash donations made after March 20, 2013. The credit is 25% of
the donation amount and is in addition to the donation tax credit already allowed.
To qualify as a first-time donor in 2014, no charitable donation tax credit may
have been claimed for 2008 to 2013 by either the taxpayer or spouse or common-law partner. The donation is reported on line 343 of Schedule 9.
25. We suggest you consult the Capital Gains Guide when determining capital gains
and losses for individuals and determine if February 22, 1994 elections have been
made.
26. Donations of publicly listed securities and of ecologically sensitive land are
not subject to tax on the capital gain arising from the disposition.
27. The lifetime capital gains exemption has increased to $800,000 for dispositions of qualified small business corporation shares and qualified farm and
fishing property occurring after 2013.
28. The Working Income Tax Benefit (WITB) is for low-income individuals and families who have earned income from employment or business. Use Schedule 6 to
determine if the taxpayer qualifies, and enter the benefit on line 453. The credit is
equal to 20% of earned income exceeding $2,760, to a maximum credit of $1,090
for taxpayers without dependants, and $1,635 for families. The credit is reduced
by 15% of net family income exceeding $11,872 for single taxpayers and $16,189 for
families. Students with no dependant children will not be eligible for the WITB.
29. Taxes may need to be paid by instalments if not enough income tax is withheld
at source. Starting in 2008, the instalment threshold was increased to $3,000
from $2,000.
30. Where a person is an immigrant to Canada, there are a number of special rules,
which could apply. CRA issued a Tax Guide for New Canadians which should be
obtained if you are participating in a clinic which could include such individuals.
31. You are to prepare only the 2014 return.
32. The amendments to the Income Tax Act regarding same-sex relationships have
become law.
33. A Tax Free Savings Account (TFSA) is a registered savings account to allow
individuals to earn investment income tax free. For 2014, if you were eligible,
you could contribute up to $5,500 to your TFSA. The annual TFSA dollar limit
will be indexed by the inflation rate (rounded to the nearest $500). For 2015,
the contribution limit remains at $5,500. Interested taxpayers may contact
a financial institution. Contributions are not deductible; withdrawals are not
taxable, and may be re- contributed in a future year.
34. Do not indicate on the return that it has been prepared by a professional on
a volunteer basis.
12 2015 TAX CLINIC GUIDELINES
Other Clinics
Certain Vocational Centre Clinics offer tax preparation for those enrolled in an English
as a Second Language (ESL) program, or who are in various technical programs. Many
of these taxpayers receive government assistance in various forms, some of which is to
be included in a calculation of income for tax purposes. For instance, training allowances are to be included in taxable income. Social assistance, reported on Form T5007,
is included in income on line 145 of the T1, with an offsetting deduction on line 250, so is
not taxable.
Other Financial Assistance
Guaranteed Income Supplement (Taxpayers over 65 and receiving OAS benefits) Single
taxpayers with income under $17,088 and married couples with combined income under
$22,560 may be eligible for the supplement. It requires a separate application.
The application form can be obtained from the Service Canada website,
www.servicecanada.gc.ca or by calling to request it at 1-800-277-9914. If married or
living with a common-law partner, the applicants will need their marriage certificate
or proof of the common-law relationship. Benefits are renewed by filing an income tax
return each year.
2015 TAX CLINIC GUIDELINES 13
Please forward inquiries to attention:
W. Dale Somerville CA
Institute of Chartered Accountants of Alberta
580 Manulife Place, 10180-101 Street Edmonton, Alberta T5J 4R2
Tel: 780 424.7391
Fax: 780 425.8766
Toll Free: 1 800 232.9406
www.albertaCAs.ca