Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: The Manitoba Income Tax Act provides for a cost of living tax credit for individuals. The tax reduction is denied to an individual in circumstances where any other person has claimed a disability tax credit on the person's federal return in respect of the individual. Where an individual has claimed the Manitoba tax reduction in a particular year that is now statute barred, are we prevented from reassessing another person's federal tax return using the fairness legislation for that particular year to allow the other person a credit in respect of the individual's disability?
Position: No.
Reasons: The federal legislation does not prevent a claim for the disability credit where a claim of any kind has been made under provincial legislation. However, since a possible reassessment in this matter would require the use of the "fairness legislation" (152(4.2) and 164(1.5)), the matter has been referred to the Assessment and Collection Branch.
June 13, 2000
Mr. Patrick Hopper HEADQUARTERS
Enquiries and Adjustments Division Jacques E. Grisé
Winnipeg Tax Centre 957-2059
2000-002506
Disability Tax Credit
This is in reply to your memorandum of May 9, 2000, requesting our assistance in resolving a situation raised by one of your clients relating to the disability tax credit in subsection 118.3(2) of the Income Tax Act (the Act).
The facts of the situation are as follows:
- XXXXXXXXXX income tax returns were filed on time and Notices of Assessment were issued within normal assessing time frames. The returns are now statute barred.
- XXXXXXXXXX was allowed a claim for the disability tax credit on each return under subsection 118.3(1) of the Act.
- XXXXXXXXXX was also allowed a claim for the Manitoba cost of living tax credit on each return under clause 5(5)(b) of the Manitoba Income Tax Act (the Manitoba Act).
- XXXXXXXXXX son, XXXXXXXXXX, has requested that we adjust his XXXXXXXXXX income tax returns to allow claims for the unused portion of his mother's disability tax credits.
- XXXXXXXXXX income tax returns are statute barred. Any adjustments to the returns would need to be processed under the fairness provisions of the Act.
An individual is not permitted to claim an amount under clause 5(5)(b) of the Manitoba Act where any other taxpayer has made a disability tax credit claim in respect of the individual in the particular year in question. In situations not dealing with statute barred returns, it is your practice to allow a taxpayer to make a claim pursuant to subsection 118.3(2) of the Act and reassess the disabled individual's tax return to disallow the amount claimed pursuant to clause 5(5)(5) of the Manitoba Act.
The denial of a deduction from tax on the basis of a disability claim made by another taxpayer is in the Manitoba legislation and not in the federal legislation. Accordingly, in our view, there is no technical basis to deny a claim under subsection 118.3(2) of the Act where another individual has claimed an amount under clause 5(5)(b) of the Manitoba Act. Since a decision to reassess pursuant to the fairness legislation is not within our purview, we have referred this matter to the Assessment and Collections Branch.
We hope our comments are helpful.
John Oulton
Manager
Business, Property and Employment
Income Section III
Business and Publications Division
Income Tax Rulings Directorate
cc - Mr. Andy Stevenson
Manager
Adjustment Group
Special Processing Division
Assessments and Collections Branch
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