ARCHIVED - Total income

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ARCHIVED - Total income


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You have to include in income most amounts you received in 2005.

Amounts that are not taxed

You do not have to include certain amounts in your income, including the following:

  • any GST/HST credit or Canada Child Tax Benefit payments, as well as those from related provincial or territorial programs;
  • child assistance payments and the supplement for handicapped children paid by the province of Quebec;
  • compensation received from a province or territory if you were a victim of a criminal act or a motor vehicle accident;
  • lottery winnings;
  • most gifts and inheritances;
  • amounts paid by Canada or an ally (if the amount is not taxable in that country) for disability or death due to war service;
  • most amounts received from a life insurance policy following someone's death; and
  • most payments of the type commonly referred to as strike pay you received from your union, even if you perform picketing duties as a requirement of membership.

Note
 Income earned on any of the above amounts (such as interest you earn when you invest lottery winnings) is taxable.

Retroactive lump-sum payments

If you received a lump-sum payment of eligible income in 2005, parts of which were for previous years after 1977, you have to include the whole payment on the appropriate line of your return for 2005.

We will not reassess the returns for the previous years to include this income. However, you can ask us to tax the parts for the previous years as if you received them in those years. We can apply this calculation to the parts that relate to years throughout which you were resident in Canada, if the total of those parts is $3,000 or more (not including interest) and the result is better for you. Eligible income includes:

  • employment income and damages for loss of employment received by order or judgment of a competent tribunal, as an arbitration award, or under a lawsuit settlement agreement;
  • periodic pension benefits, which do not include Canada or Quebec Pension Plan benefits (see line 114) or the final payment received when leaving a plan;
  • wage-loss replacement plan benefits;
  • support payments for a spouse, common-law partner, or child; and
  • Employment or Unemployment Insurance benefits.

To ask us to apply this calculation, attach to your paper return all completed copies of Form T1198, Statement of Qualifying Retroactive Lump-Sum Payment , that payers have given you. We will tell you the results on your Notice of Assessment or Notice of Reassessment.

Loans and transfers of property

You may have to report income, such as dividends (see line 120) or interest (see line 121) from property (including money and any replacement property) you loaned or transferred to your spouse or common-law partner, child, or other relative. You also may have to report capital gains (see line 127) or losses from property you loaned or transferred to your spouse or common-law partner.

For details, get Interpretation Bulletin IT-510, Transfers and loans of property made after May 22, 1985, to a related minor , or IT-511, Interspousal and Certain Other Transfers and Loans of Property .

Split income of a child under 18

Certain income of a child who was born in 1988 or later is treated differently. This income is not subject to the rules discussed under "Loans and transfers of property" in the previous section. It is subject to a special tax, but also qualifies for a deduction. This applies to the following amounts received either directly or through a trust (other than a mutual fund trust) or partnership:

  • dividends from shares (not including those in a mutual fund corporation or listed on a prescribed stock exchange); and
  • shareholder benefits that relate to shares that are not listed on a prescribed stock exchange.

The above also applies to income from a trust (other than a mutual fund trust) or partnership for providing goods or services to (or in support of) a business operated by:

  • someone related to the child at any time in the year;
  • a corporation that has a specified shareholder who is related to the child at any time in the year; or
  • a professional corporation that has a shareholder who is related to the child at any time in the year.

The special tax and deduction do not apply if:

  • the income is from property inherited by the child and, during the year, he or she either is enrolled full-time in a post-secondary institution or qualifies for the disability amount (line 316 on Schedule 1);
  • the income is from property the child inherits from a parent;
  • the child was a non-resident of Canada at any time in the year; or
  • neither of the child's parents were residents of Canada at any time in the year.

How to report

The child still reports the income on the appropriate lines of his or her return. However, he or she can claim a deduction on line 232 for this income. The special tax is included in the calculation of his or her federal and provincial or territorial taxes. To calculate it, get Form T1206, Tax on Split Income . Attach a completed copy to the child's paper return.

Tax shelters

To claim deductions, losses, or credits from tax shelter investments, attach to your paper return any applicable T5003 and T5013 slips, and a completed Form T5004, Claim for Tax Shelter Loss or Deduction . Make sure your form shows the tax shelter identification number.

Line 101 - Employment income

Enter the total of amounts shown in box 14 of all your T4 slips. If you have not received your slip by early April, or if you have any questions about an amount on a slip, contact your employer. For more information see "What if you are missing information?".

If you have employment expenses, see line 229 for details.

Notes
If you received a housing allowance as a member of the clergy, the allowance may be included in box 14 of your T4 slip. If so, subtract the amount of the allowance from the amount in box 14, and include the difference on line 101. Include the allowance on line 104.

If you have employment income from another country, report it on line 104 of your return.

If tips you received through employment are not included on your T4 slip, report them on line 104.

You may be able to make CPP contributions on certain employment income for which no contribution was made (for example, tips that were not included on your T4 slip) or extra contributions on T4 income if you had more than one employer in the year. For more information, see "Making additional CPP contributions" at line 308.

Tax Tip
Your contributions to the Canada or Quebec Pension Plan (box 16 or 17 of your T4 slips and any amount on line 421) determine the amount of benefits you will receive under either of these plans. If there are no contributions in box 16 or 17 of your T4 slips, or if you have any questions about the amount of your contributions, contact your employer.

Emergency volunteers

In 2005, you may have received a payment from a government, municipality, or other public authority for your work as a volunteer ambulance technician, firefighter, or search, rescue, or other emergency worker. If so, the T4 slip issued by such an authority generally will show only the taxable part of the payment, which is the part that is more than $1,000. However, if that authority employed you (other than as a volunteer) for the same or similar duties, the whole payment will be taxable.

Security option benefits

You may have to report taxable benefits you received in (or carried forward to) 2005 on certain security options you exercised. If you report any taxable benefits, see line 249 for details. However, you may be able to choose to defer reporting these benefits if you have not yet disposed of those securities.

For this to apply, you have to confirm certain information in writing with your employer and file Form T1212, Statement of Deferred Security Options Benefits , with your paper return each year. For details, get guide T4037, Capital Gains , or contact us. Your Notice of Assessment or Notice of Reassessment will show the remaining balance of your deferred amounts.

Commissions (box 42)

Enter on line 102 the total commissions shown in box 42 on all your T4 slips you received as an employee. This amount is already included in your income on line 101, so do not add it again when you calculate your total income on line 150. If you have commission expenses, see line 229 for details.

If you are a self-employed commission salesperson, get guide T4002, Business and Professional Income , to determine how to report your commission income and claim your expenses.

Line 104 - Other employment income

Report on this line the total of the following amounts:

  • Employment income not reported on a T4 slip - Include amounts such as tips and occasional earnings.
  • Net research grants - Subtract your expenses from the grant you received and include the net amount on this line. Your expenses cannot be more than your grant. Attach to your paper return a list of your expenses. For details, get Interpretation Bulletin IT-75, Scholarships, Fellowships, Bursaries, Prizes, Research Grants and Financial Assistance .
  • Cleric's housing allowance - Include the amount shown on your T4 slip. You may be entitled to claim a deduction on line 231.
  • Foreign employment income - Report your earnings in Canadian dollars (see "How do you report foreign income and other amounts?"). The amount on your United States W-2 slip may have been reduced by such contributions to a "401(k), 457 or 403(b) plan, US Medicare and Federal Insurance Contributions Act (FICA)." These contributions are not deductible on your Canadian return. Therefore, you have to add these amounts into your income as well.
  • Income-maintenance insurance plans (wage-loss replacement plans) - Box 28 of your T4A slip includes the payments you received from such a plan. There also should be a note on the slip identifying the amount. You may not have to report the full amount on your return. Report the amount you received, minus contributions you made to the plan after 1967, if you did not use them on a previous year's return to calculate the amount to report. For more information, get Interpretation Bulletin IT-428, Wage loss replacement plans .
  • Certain GST/HST and QST (Quebec sales tax) rebates - If you are an employee who paid and deducted employment expenses in 2004 or earlier, you may have received a GST/HST or QST rebate in 2005 for those expenses. If so, include on line 104 the rebate you received. However, a rebate for a vehicle or musical instrument you bought, for which you can claim capital cost allowance, is treated differently. Guide T4044, Employment Expenses , contains instructions on how to report such rebates and information about capital cost allowance.
  • Royalties - Include these amounts on this line if you received them for a work or invention of yours. Report other royalties (other than those included at line 135) on line 121.
  • Amounts you received under a supplementary unemployment benefit plan (a guaranteed annual wage plan).
  • Taxable benefit for premiums paid to cover you under a group term life-insurance plan - Include the amount in box 28 of your T4A slip.
  • Employee profit-sharing plan - Include the amount in box 35 of your T4PS slip.

Line 113 - Old Age Security pension (OAS)

Enter the amount in box 18 of your T4A(OAS) slip. For details on how to report the amount in box 21, see line 146. If you do not have your T4A(OAS) slip, visit the Social Development Canada Web site at www.sdc.gc.ca (E-Services), or contact 1-800-277-9914.

Notes
If your net income before adjustments (line 234) is more than $60,806, see line 235 for information about repaying OAS benefits.

If, at any time in 2005, you were a non-resident of Canada receiving OAS pension, you also may have to complete Form T1136, Old Age Security Return of Income . For more details, and to get this form and the related guide, contact the International Tax Services Office.

Line 114 - CPP or QPP benefits

Enter the total Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) benefits shown in box 20 of your T4A(P) slip. This amount is the total of the amounts in boxes 14 to 18. If your T4A(P) slip has an amount in box 16, 17, or 18, read whichever of the following sections apply to you. If you do not have your T4A(P) slip, visit the Social Development Canada Web site at www.sdc.gc.ca (E-Services), or contact 1-800-277-9914.

Lump-sum benefits - If you received a lump-sum CPP or QPP payment in 2005, parts of which were for previous years, you have to include the whole payment on line 114 of your return for 2005. We will not reassess the returns for the previous years to include this income. However, if the total of the parts that relate to previous years is $300 or more, we will tax those parts as if you received them in those years if the result is better for you. Attach to your paper return the letter you received from Social Development Canada, and we will tell you the results on your Notice of Assessment or Notice of Reassessment.

CPP or QPP disability benefit (box 16)

Enter on line 152, located below and to the left of line 114, the amount of your CPP or QPP disability benefits from box 16. This amount is already included in your income on line 114, so do not add it again when you calculate your total income on line 150.

CPP or QPP child benefit (box 17)

Include a child benefit only if you received it because you were the child of a deceased or disabled contributor. Any benefits paid for your children are their income, even if you received the payment.

CPP or QPP death benefit (box 18)

If you received this amount and you are a beneficiary of the deceased person's estate, you can choose to include it either on line 114 of your own return, or on a T3 Trust Income Tax and Information Return for the estate. Do not report it on the deceased person's individual return. The taxes payable may be different, depending on which return you use. For more information, get guide T4013, T3 Trust Guide .

Line 115 - Other pensions or superannuation

Include on this line any other pensions or superannuation you received, such as amounts shown in box 16 of your T4A slips and box 31 of your T3 slips. Report on line 130 any amount in box 18 of your T4A slip or box 22 of your T3 slip.

You may also have to report on this line other amounts that you received. Read whichever of the following sections apply to you.

Tax Tip
If you have to report your pension or annuity payments on line 115, you may be able to claim the pension income amount (see line 314).

Annuity and registered retirement income fund (including life income fund) payments

Report the amount from box 24 of your T4A slip, box 16 or 20 of your T4RIF slip, or box 19 of your T5 slip as follows:

  • If you were 65 or older on December 31, 2005, include it on line 115.
  • Regardless of your age, if you received it because your spouse or common-law partner died, include it on line 115.
  • Otherwise, report on line 130 the amount in box 24 of your T4A slip, or box 16 or 20 of your T4RIF slip. Report on line 121 the amount in box 19 of your T5 slip.

Note
 If there is an amount in box 18 or 22 of your T4RIF slip, see the instructions on the back of the slip.

Pensions from a foreign country

Report in Canadian dollars the gross amount of your foreign pension income for 2005. See "How do you report foreign income and other amounts?". Attach a note to your paper return identifying the type of pension you received and the country it came from. In some cases, amounts you receive may not be considered pension income, and you may have to report them elsewhere on your return.

United States individual retirement account (IRA) - If, during 2005, you received amounts from an IRA or converted the IRA to a "Roth" IRA, contact us.

Tax Tip
You can claim a deduction on line 256 for the part of your foreign pension income that is tax-free in Canada because of a tax treaty. If you do not know whether any part of your foreign pension is tax-free, contact us.

United States social security - Include on line 115 the full amount, in Canadian dollars, of your U.S. social security benefits. You can claim a deduction for part of this income. See line 256 for details.

Benefits paid for your children are their income, even if you received the payments.

Line 119 - Employment Insurance and other benefits

Enter the amount in box 14 of your T4E slip, minus any amount in box 18. If you already repaid excess benefits you received, directly to Human Resources and Skills Development Canada, you may be able to claim a deduction. See line 232 for details.

Note
 If your net income before adjustments (line 234) is more than $48,750, you may have to repay some of the benefits you received. See line 235 for details.

Line 120 - Taxable amount of dividends from taxable Canadian corporations

Enter on line 120 the taxable amount of all dividends from taxable Canadian corporations, as shown in box 11 on T5 slips, box 31 on T4PS slips, box 32 on T3 slips, and in the "Details" area on T5013 slips. Report on line 121 any foreign dividends you received.

How to report

Enter the taxable amount of your dividends from taxable Canadian corporations in Part I of Schedule 4. You have to report your dividends even if you did not receive an information slip. If you did not receive one, you can calculate the taxable amount of dividends you received by multiplying the dividends you actually received by 125%.

These dividends qualify for the dividend tax credit, which can reduce the amount of tax you pay. You can claim this credit when you calculate your federal and provincial or territorial taxes. Read the instructions at line 425 .

Notes
 Special rules apply for income from property (including shares) one family member lends or transfers to another. See "Loans and transfers of property" for more information.

If a child who was born in 1988 or later is reporting certain dividends, see "Split income of a child under 18".

Tax Tip
In some cases, it may be better for you to report all the taxable dividends your spouse or common-law partner received from taxable Canadian corporations. You can do this only if, by including the dividends in your income, you will be able to claim or increase your claim for the spouse or common-law partner amount (line 303 on Schedule 1).

If you use this option, you may be able to take better advantage of the dividend tax credit. Do not include these dividends in your spouse or common-law partner's income when you calculate claims such as the spouse or common-law partner amount on line 303 or amounts transferred from your spouse or common-law partner on Schedule 2.

Line 121 - Interest and other investment income

The amounts you report for the year depend on the type of investment and when you made it. Include on this line amounts you received minus any part of those amounts that you reported in previous years. Also include amounts that were credited to you but that you did not receive, such as amounts that were reinvested.

The amounts to report include those shown in boxes 13, 14, and 15 on T5 slips, box 25 on T3 slips, and boxes 26 and 27 on T5013 slips. You also have to report the interest on any tax refund you received in 2005, which is shown on your Notice of Assessment or Notice of Reassessment.

If you received foreign interest or dividend income, make sure you report it in Canadian dollars. For more information, see "How do you report foreign income and other amounts?".

If, as a shareholder in a foreign corporation, you received certain shares in another foreign corporation, you may not have to include any amount in income for receiving those shares. For more details, get Form T1135, Foreign Income Verification Statement , or contact us.

Notes
Special rules apply for income from most property (including money) one family member lends or transfers to another. See "Loans and transfers of property" for more information.

Generally, when you invest your money in your child's name, you have to report the income from those investments. However, if you deposited Canada Child Tax Benefit payments into a bank account or trust in your child's name, the interest earned on those payments is your child's income.

If a child who was born in 1988 or later is reporting certain investment income, see "Split income of a child under 18".

How to report

Enter a list of your investments in Part II of Schedule 4. Generally, you report your share of interest from a joint investment based on how much you contributed to it.

Example
Sally and Roger received a T5 slip from their joint bank account showing the $400 interest they earned in 2005. Sally had deposited $4,000 and Roger had deposited $1,000 into the account.

Sally reports $320 interest, calculated as follows:

($4,000 (her share)÷$5,000 (total) ) × $400 (total interest) = $320

Roger reports $80 interest, calculated as follows:

$1,000 (his share)÷$5,000 (total) ) × $400 (total interest) = $80

Bank accounts

Report interest paid or credited to you in 2005, even if you did not receive an information slip. You may not receive a T5 slip for amounts under $50.

Term deposits, guaranteed investment certificates (GICs), and other similar investments

On these investments, interest builds up over a period of time, usually longer than one year. Generally, you do not receive the interest until the investment matures or you cash it in. For information on Canada Savings Bonds, see below.

The amount of income you report is based on the interest you earned during each complete investment year. For example, if you made a long-term investment on July 1, 2004, report on your return for 2005 the interest that accumulated to the end of June 2005, even if you do not receive a T5 slip. Report the interest from July 2005 to June 2006 on your 2006 return.

Note
 Your investment agreement may specify a different interest rate each year. If so, report the amount shown on your T5 slip, even if it is different from what the agreement specifies or what you received. The issuer of your investment can tell you how this amount was calculated.

For most investments you made in 1990 or later, you have to report the interest each year, as you earn it. For information about reporting methods for investments made in 1989 or earlier, use Info-Tax, one of our T.I.P.S. services, or see Interpretation Bulletin IT-396, Interest Income .

Canada Savings Bonds (CSBs)

Interest on a regular interest ("R") bond is paid annually until the bond matures or you cash it in. Interest on a compound interest ("C") bond is not paid until you cash it in. For both kinds of bonds, report the amount shown on the T5 slip.

Treasury bills (T-bills)

If you disposed of a T-bill at maturity in 2005, you have to report as interest the difference between the price you paid and the proceeds of disposition shown on your T5008 slip or account statement.

If you disposed of a T-bill before maturity in 2005, you may also have to report a capital gain or loss. For details, get guide T4037, Capital Gains .

Earnings on life insurance policies

Report the earnings that have accumulated on certain life insurance policies in the same way as you do for other investments. In all cases, your insurance company will send you a T5 slip. For policies bought before 1990, you can choose to report accumulated earnings annually by telling your insurer in writing that you choose to do so.

Line 122 - Net partnership income: limited or non-active partners only

Enter on line 122 your share of the net income or loss from a partnership if the partnership did not include a rental or farming operation and you were either:

  • a limited partner; or
  • not actively involved in the partnership and not otherwise involved in a business or profession similar to that carried on by the partnership.

Report your net rental income or loss from a partnership on line 126. Report your net farming income or loss from a partnership on line 141.

If none of the above applies to you, enter your share of the partnership's net income or loss on the applicable self-employment line of your return (see lines 135 to 143).

Notes
 If the partnership has a loss, the amount you can claim could be limited. For details, contact us.

If a child who was born in 1988 or later is reporting certain limited or non-active partnership income, see "Split income of a child under 18".

If you have a tax shelter, see "Tax shelters."

How to report

  • Complete Part III of Schedule 4.
  • Attach to your paper return a T5013 slip. If you did not receive one, attach a copy of the partnership's financial statement. See lines 135 to 143 for more details.

Note
 You may have to make Canada Pension Plan contributions on the net income you report on line 122. See line 222 for details.

Canadian certified feature films and productions

You may have invested in such a film or production for reasons other than to earn income from a business. If so, you can claim a deduction for capital cost allowance. For more information, including how to calculate your claim, see the back of slip T1-CP, Statement of Certified Productions , which the producer issues. File the form with your paper return.

Line 126 - Rental income

Enter your gross rental income on line 160 and your net rental income or loss on line 126. If you have a loss, show the amount in brackets. If you were a member of a partnership, you should also include any amount in box 20 of your T5013 slip, or any amount the partnership allocated to you in its financial statements.

You have to include with your paper return a statement (you can use Form T776, Statement of Real Estate Rentals ) showing your rental income and expenses for the year. If it applies, also include either your T5013 slip or a copy of the partnership's financial statement.

Guide T4036, Rental Income , contains Form T776 and more information about rental activities.

If you have a tax shelter, see "Tax shelters."

Line 127 - Taxable capital gains

You may have a capital gain or loss when property is disposed of, such as when real estate or shares (including those in mutual funds) are sold. Generally, if the total of your gains for the year is more than the total of your losses, you have to include 50% of the difference in your income. However, if the total of your losses for the year is more than the total of your gains, you cannot deduct the difference on your return for the year. See the next section called "How to report."

If you have a capital gain or loss from redeeming your mutual fund units or shares, get information sheet RC4169, Tax Treatment of Mutual Funds for Individuals , for more details.

If you realized a capital gain as a result of a mortgage foreclosure or conditional sales repossession, do not include the capital gain in income when calculating your GST/HST credit, Canada Child Tax Benefit payments, Child Disability Benefit payments, social benefits repayment (line 235), age amount (line 301), refundable medical expenses supplement (line 452), British Columbia sales tax credit, or Prince Edward Island, Nova Scotia, New Brunswick or Newfoundland and Labrador tax reductions. If this applies to you, contact us for more details.

When you donate capital property to a charity, we consider you to have disposed of the property at its fair market value. As a result, you may have to report a capital gain or loss for that property. There are special rules for donations of certain property. For details, get guide T4037, Capital Gains , and pamphlet P113, Gifts and Income Tax .

How to report

Complete Schedule 3, and attach it to your paper return. Generally, if all of your gains or losses are shown on T4PS, T5, or T5013 slips, or on a financial statement from a partnership, enter the amounts on line 174 on Schedule 3, and if they are shown on T3 slips, enter them on line 176. Also attach these documents to your paper return. If your securities transactions are shown on an account statement or a T5008 slip, use the information on these documents to help you complete Schedule 3. For more information about these and other capital dispositions, get guide T4037, Capital Gains .

If the result on line 199 on Schedule 3 is positive (a gain), enter the amount on line 127 of your return. If it is negative (a loss), do not claim the amount on line 127 of your return. We will register it in our system. Keep track of this loss, which you can use to reduce your taxable capital gains of other years. The following "Notes" explain how to do this.

Notes
 You may have incurred a net capital loss in 2005 that you want to apply against taxable capital gains you reported on your 2002, 2003, or 2004 return. For more information and to carry back the loss, get Form T1A, Request for Loss Carryback , and guide T4037, Capital Gains . Attach a completed Form T1A to your paper return (or send one to us separately). Do not file an amended return for the year or years to which you want to apply the loss.

If you are completing a return for a person who died in 2005, get guide T4011, Preparing Returns for Deceased Persons , for details about special rules that apply to claiming these losses.

Tax Tip
You may be able to claim a deduction for your capital gains. See line 254 for details.

Line 128 - Support payments received

Enter on line 156 the total of all support payments for yourself and/or for a child that you received (or, if you are the payer, the payments that were repaid to you under a court order) in 2005. Enter on line 128 only the taxable amount. For more details, get guide P102, Support Payments .

Tax Tips
You may be able to claim a deduction on line 256 for the part of the payments you received from a resident of another country that is tax-free in Canada because of a tax treaty. If you do not know whether any part of the payments is tax-free, contact us.

You may be able to claim a deduction on line 220 for support income you repaid under a court order. For details, get guide P102, Support Payments .

Line 129 - RRSP income

Enter on line 129 the total of amounts shown in boxes 16, 18, 28, and 34 of all your T4RSP slips. Also include amounts in boxes 20, 22, and 26, unless your spouse or common-law partner made a contribution to your RRSP. See "RRSPs for spouse or common-law partner" in the next section for more details.

Tax Tips
Annuity payments shown in box 16 of your T4RSP slip may qualify for the pension income amount (see line 314).

If unused RRSP contributions you made after 1990 were refunded to you or your spouse or common-law partner in 2005, you may be able to claim a deduction on line 232. See line 232 for details.

RRSPs for spouse or common-law partner

Your spouse or common-law partner may have to report some or all of the RRSP income shown in box 20, 22, or 26 of your T4RSP slips if he or she contributed to any of your RRSPs in 2003, 2004, or 2005. In that case, your T4RSP slip should have "Yes" checked in box 24, and your spouse or common-law partner's social insurance number in box 36.

To calculate the amount from an RRSP for spouse or common-law partner that each of you has to report, complete Form T2205 , Amounts From a Spousal or Common-law Partner RRSP or RRIF to Include in Income . Both you and your spouse or common-law partner should include this form with your paper returns. However, only the person shown as the annuitant on the T4RSP slip can claim the income tax deducted (box 30) and should attach the slip to his or her paper return.

Note
 If you and your spouse or common-law partner were living apart because of a breakdown in the relationship when you withdrew funds from your RRSP, you have to report the whole amount shown on your T4RSP slips.

For more details on RRSP income, get guide T4040, RRSPs and Other Registered Plans for Retirement .

Repayments under the Home Buyers' Plan (HBP) and Lifelong Learning Plan (LLP)

If, in previous years, you withdrew funds from your RRSP under the HBP or LLP, you may have to make a repayment for 2005. The minimum repayment is shown on your Notice of Assessment or Notice of Reassessment for 2004. To make a repayment, you have to contribute to your RRSP from January 1, 2005, to March 1, 2006, and designate your contribution as a repayment on line 6 or 7 of Schedule 7. Do not make your repayment to us.

If you repay less than the minimum amount for 2005, you have to include the difference on line 129 of your return.

Example
Kevin withdrew funds under the HBP in 2000. His required repayment for 2005 was $800. The only RRSP contribution he made from January 1, 2005, to March 1, 2006, was for $500 on June 18, 2005. He designated it on line 6 of Schedule 7 as a repayment under the HBP, and he includes $300 in his income on line 129 ($800 required repayment minus $500 repaid and designated).

For more information, including the rules that apply when the person who made the withdrawal dies, turns 69, or becomes a non-resident, get guide RC4135, Home Buyers' Plan (HBP) , or guide RC4112, Lifelong Learning Plan (LLP) .

To view your HBP or LLP information, visit My Account on our Web site.

Line 130 - Other income

Use this line to report taxable income that is not reported anywhere else on the return. To find out if an amount is taxable, contact us. Make sure you have read the instructions for lines 101 to 129 first. In the space to the left of line 130, specify the type of income you are reporting. If you have more than one type of income, attach a note to your paper return giving the details.

Note
 Special rules apply for income from property one family member lends or transfers to another. See "Loans and transfers of property" for more information.

Scholarships, fellowships, bursaries, (study grants), and artists' project grants

Total all the amounts you received in 2005 (box 28 of your T4A slips). If you received any amounts (other than an artist's project grant) for a program for which you can claim the education amount for 2005 (see line 323), report only the part of the total of all amounts that is more than $3,000. If you are not eligible for the education amount, report on line 130 only the amount that is more than $500.

Note
 If you received an artists' project grant, get Interpretation Bulletin IT-75, Scholarships, Fellowships, Bursaries, Prizes, Research Grants and Financial Assistance , for more information.

Report prizes and awards you received as a benefit from your employment or in connection with a business. However, these are not eligible for the $500 tax-free amount. If you received a research grant, see line 104.

For more information, get Interpretation Bulletin IT-75.

Lump-sum payments

Include lump-sum payments from pensions and deferred profit-sharing plans (box 18 of your T4A slips and box 22 of your T3 slips) received when leaving a plan.

If, in 2005, you received a lump-sum payment that included amounts you earned in previous years, you have to include the whole payment on line 130 of your return for 2005. However, you can ask us to apply a reduced tax rate to the part that relates to amounts you earned before 1972. To ask us to apply this special rate, attach a note to your paper return. We will tell you the results on your Notice of Assessment or Notice of Reassessment.

Retiring allowances (severance pay)

A retiring allowance includes an amount paid as severance pay. Include the amount in boxes 26 and 27 of your T4A slips.

Also, report any retiring allowance included in box 26 of your T3 slips.

Note
 You may be able to deduct legal fees you paid to get a retiring allowance. See line 232 for details.

Tax Tip
You may be able to transfer part or all of your retiring allowances to your RRSP. See "Line 11 - Transfers".

Death benefits (other than Canada or Quebec Pension Plan death benefits)

A death benefit is an amount you receive after a person's death for that person's employment service. It is shown in box 28 of your T4A slips or box 35 of your T3 slips.

You may not have to pay tax on up to $10,000 of the benefit you received. If you are the only one to receive a death benefit, report the amount you receive that is more than $10,000. Even if you do not receive all of the death benefit in one year, the total tax-free amount for all years cannot be more than $10,000. To find out what to report if anyone else also received a death benefit for the same person, use Info-Tax, one of our T.I.P.S. services, or see Interpretation Bulletin IT-508, Death Benefits .

Attach to your paper return a note stating the amount of death benefits you received but did not include in your income.

Other kinds of income

Also include the following amounts on line 130:

  • amounts distributed from a retirement compensation arrangement;
  • training allowances, Saskatchewan Pension Plan payments, or any other amount in box 28 of your T4A slips (other than amounts already mentioned for this line and line 104);
  • payments from a trust shown in box 26 of your T3 slips;
  • payments from a registered education savings plan shown in box 40 (see also line 418) or 42 of your T4A slips; and
  • certain annuity payments (see line 115).

Lines 135 to 143 - Self-employment income

Enter on the appropriate line your gross and net income or loss from self-employment. If you have a loss, show it in brackets. Include with your paper return a statement showing your income and expenses.

You have to file Form T1139, Reconciliation of 2005 Business Income for Tax Purposes , with your return for 2005 if you want to keep a year-end that does not finish on December 31, 2005. However, if you filed Form T1139 with your return for 2004, you may have to complete the version of this form for 2005. See guide RC4015, Reconciliation of Business Income for Tax Purposes .

Notes
 You may have to make Canada Pension Plan contributions on your self-employment earnings (see line 222).

If a child who was born in 1988 or later is reporting certain self-employment income, see "Split income of a child under 18".

The following guides contain more information and forms you may need to help you calculate your self-employment income:

Notes
 If you are participating in the Canadian Agricultural Income Stabilization Program (CAIS Program), and you are filing a paper return, use the envelope contained in your guide.

If you use your home for day care, see pamphlet P134, Using Your Home for Day Care , for more information.

Generally, if you were a limited or non-active partner, you enter your net income or loss on line 122. However, if your net income or loss is from a rental operation, enter the amount on line 126. If it is from a farming operation, enter it on line 141.

If you were an active partner and received a T5013 slip, report the amount from box 18 on the line of your return shown in box 05. This is your share of the partnership's net income or loss. Also report the partnership's gross income as shown in box 51. Attach the T5013 slip to your paper return. If you did not receive this slip, you should attach the applicable self-employment form indicated above, or a copy of the partnership's financial statement.

For more information, contact our Business Enquiries service. See "Contacting us".

If you have a tax shelter, see "Tax shelters."

Line 144 - Workers' compensation benefits

Enter the amount in box 10 of your T5007 slip. Claim a deduction on line 250 for the benefits you entered on line 144.

Note
 In 2005, you may have repaid salary or wages originally paid to you by your employer in a previous year, in anticipation of workers' compensation benefits you would receive. This amount should be shown in box 77 of your T4 slip. In that case, you may be able to claim a deduction on line 229. Contact us for more information.

Line 145 - Social assistance payments

Generally, you enter the amount in box 11 of your T5007 slip or the federal part of your Quebec Relevé 5 slip. However, if you lived with your spouse or common-law partner when the payments were made, the one of you who has the higher net income on line 236 (not including these payments or the deductions on lines 214 or 235) has to report all of the payments, no matter whose name is on the slip. If this amount is the same for both of you, the person whose name is on the T5007 slip (or the prestataire on the federal part of the Relevé 5 slip) has to report them.

Notes
 You do not have to include certain social assistance payments you or your spouse or common-law partner received for being a foster parent or for caring for a disabled adult who lived with you. For more information, contact us. However, if the payments are for caring for your spouse or common-law partner or an individual related to either of you, whoever has the higher net income will have to include those payments in income.

If you repay an amount that was reported on a T5007 slip or a Relevé 5 in a prior year, the return for that year may be adjusted based on the amended slip provided. See "How do you change a return" for information.

Claim a deduction on line 250 for the social assistance payments you entered on line 145.

Line 146 - Net federal supplements

Enter the amount in box 21 of your T4A(OAS) slip.

If your net income before adjustments (line 234) is $60,806 or less, claim a deduction on line 250 for the net federal supplements you entered on line 146. If the amount on line 234 of your return is more than $60,806, contact us to find out how much you can deduct on line 250.

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Date modified:
2006-02-28