On this page…

• Line 421 - CPP contributions payable on self-employment and other earnings
• Line 422 - Social benefits repayment
• Line 424 - Federal tax on split income
• Line 425 - Federal dividend tax credit
• Line 426 - Overseas employment tax credit
• Line 427 - Minimum tax carry-over
• Line 428 - Provincial or territorial tax
• Lines 431 and 433 - Federal foreign tax credit
• Line 437 - Total income tax deducted
• Line 438 - Tax transfer for residents of Quebec
• Line 440 - Refundable Quebec abatement
• Line 445 - Section 217 tax adjustment
• Line 448 - CPP overpayment
• Line 450 - Employment Insurance overpayment
• Line 452 - Refundable medical expense supplement
• Line 454 - Refund of investment tax credit
• Line 456 - Part XII.2 trust tax credit
• Line 457 - Employee and partner GST/HST rebate
• Line 476 - Tax paid by instalments
• Line 484 - Refund
  • Direct deposit
• Line 485 - Balance owing

⬤Line 421 - CPP contributions payable on self-employment and other earnings

Enter the Canada Pension Plan (CPP) contributions you have to pay from line 10 on Schedule 8.

If you have to complete a return for the province of Quebec, this line does not apply to you. Enter the Quebec Pension Plan contributions you have to pay on your provincial income tax return for Quebec.

⬤▲Line 422 - Social benefits repayment

Enter the amount of social benefits you have to repay, from line 235 of your return.

Non-residents electing under section 217 – Enter only the amount of your Employment Insurance benefits repayment as calculated on the charts on the back of your information slip. Do not enter the amount of your Old Age Security pension or net federal supplements repayment.

⬤Line 424 - Federal tax on split income

See Line 424.

⬤Line 425 - Federal dividend tax credit

See Line 425.

⬤Line 426 - Overseas employment tax credit

See Line 426.

⬤▮▲Line 427 - Minimum tax carry-over

See Line 427.

⬤▲Line 428 - Provincial or territorial tax

Deemed residents – This line applies to you only if you had a business with a permanent establishment in a province or territory in Canada in 2005. If this is your situation, use Form T2203, Provincial and Territorial Taxes for 2005 - Multiple Jurisdictions, to calculate your tax for provinces and territories other than Quebec. Attach a copy to your return.

Non-residents electing under section 217 – This line applies to you only if you had income from employment in Canada in 2005, or from a business with a permanent establishment in a province or territory in Canada in 2005. If this is your situation, use Form T2203, Provincial and Territorial Taxes for 2005 – Multiple Jurisdictions, to calculate your tax for provinces and territories other than Quebec. Attach a copy to your return.

Note
To calculate your tax for Quebec, you will have to file a Quebec provincial return.

⬤▮▲Lines 431 and 433 - Federal foreign tax credit

See Line 431 and 433.

⬤▮▲Line 437 - Total income tax deducted

Enter the total of the amounts shown in the "Income tax deducted" box from all of your Canadian information slips. However, if you are subject to Quebec tax, do not include on this return any of your Quebec provincial income tax deducted.

If you are not subject to Quebec tax, but you had Quebec provincial income tax withheld from your income, include those amounts on this line. Attach your provincial information slips to your return.

Notes
If you paid tax by instalments in 2005, claim them on line 476.

If you paid foreign taxes, do not claim these amounts on this line. However, you may be able to claim a foreign tax credit (see lines 431 and 433).

Deemed residents – If tax was withheld from your OAS monthly benefits in 2005 (as shown in box 22 of your T4A(OAS) slip), make sure you claim it on this line.

Non-residents electing under section 217 – If you received Old Age Security benefits in 2005, include the amount of non-resident tax shown in box 17 of your NR4-OAS slip. Do not include the amount of recovery tax shown in box 27 of the slip.

⬤Line 438 - Tax transfer for residents of Quebec

If you have to file a return for the province of Quebec, you may have earned income, such as employment income, outside Quebec during 2005. In that case, tax may have been deducted for a province or territory other than Quebec.

You can transfer, to the province of Quebec, up to 45% of the income tax shown on information slips issued to you by payers outside Quebec.

Enter on line 438 of your federal return and on line 454 of your provincial income tax return for Quebec the amount you want to transfer (up to the maximum). If the taxable income on your provincial income tax return for Quebec is zero, no transfer is necessary.

⬤▮▲Line 440 - Refundable Quebec abatement

The Quebec abatement is provided under the federal-provincial fiscal arrangement, in place of direct cost-sharing by the federal government. It reduces your balance owing and may even give you a refund.

If you have to file a return for the province of Quebec, and you did not have a business with a permanent establishment outside Quebec, your refundable Quebec abatement is 16.5% of the basic federal tax on line 13 of Schedule 1.

If you have to file a return for the provice of Quebec, and you had a business with a permanent establishment outside Quebec, use Form T2203, Provincial and Territorial Taxes for 2005 - Multiple Jurisdictions, to calculate your abatement.

▲Line 445 - Section 217 tax adjustment

See Line 445

⬤▲Line 448 - CPP overpayment

If you do have to file a return for the province of Quebec, and you contributed more to the Canada Pension Plan (CPP) than you had to (see line 308), enter the difference on this line. We will refund the excess contributions to you or use them to reduce your balance owing.

If you have to file a return for the province of Quebec, this line does not apply to you. Claim the excess amount on your provincial income tax return for Quebec.

⬤▲Line 450 - Employment Insurance overpayment

If you contributed more than you had to (see line 312), enter the difference on line 450. We will refund the excess amount to you or use it to reduce your balance owing. If the difference is $1.00 or less, you will not receive a refund.

Note
If you repaid some of the Employment Insurance benefits you received, do not claim the repayment on this line. You may be able to claim a deduction on line 232 for the benefits you repaid.

⬤Line 452 - Refundable medical expense supplement

Previously, you were able to claim a credit of up to $562. The maximum amount has been increased to $750.

To claim this supplement, the following must apply:

• You have an amount on line 215 on your return or on line 332 of Schedule 1.
• You were a deemed resident in Canada throughout 2005.
• You were 18 or older at the end of 2005.

In addition, the total of the following two amounts has to be $2,857 or more:

• your employment income on lines 101 and 104 (other than amounts received from a wage-loss replacement plan) minus the amounts on lines 207, 212, 229, and 231 (but if the result is negative, use "0"); and
• your net self-employment income (not including losses) from lines 135 to 143.

You cannot claim this credit if the total of your net income (line 236) and your spouse or common-law partner's net income (line 236 of his or her return, or the amount that it would be if he or she filed a return) is $36,663 or more. However, if you were separated because of a breakdown in your relationship for a period of 90 days or more that included December 31, 2005, you do not have to include your spouse or common-law partner's income when calculating this credit.

Make sure you enter, in the Identification area on page 1 of your return, your marital status and, if it applies, the information concerning your spouse or common-law partner (including his or her net income, even if it is zero).

Complete the chart for line 452 on the Federal Worksheet to calculate your claim. You can claim this credit for the same medical expenses that you claimed on line 215 of your return and line 332 on Schedule 1.

⬤▲Line 454 - Refund of investment tax credit

If you are eligible for an investment tax credit (line 412 on Schedule 1) based on expenditures made in 2005, you may be able to claim a refund of your unused investment tax credit. This refund will reduce the amount of credit available to you for other years.

Calculate the refundable part of your investment tax credit on Form T2038(IND), Investment Tax Credit (Individuals). Attach a completed copy of the form to your return.

⬤Line 456 - Part XII.2 trust tax credit

Enter the total of amounts shown in box 38 of all your T3 slips.

⬤▲Line 457 - Employee and partner GST/HST rebate

If you deducted expenses from your income as an employee (line 212 or 229) or as a partner (lines 135 to 143), you may be eligible for a rebate of the GST/HST you paid on those expenses. Generally, you can claim this rebate if either of the following applies:

• your employer is a GST/HST registrant, other than a listed financial institution; or
• you are a member of a GST/HST-registered partnership, and you have reported on your return your share of the income from that partnership.

To claim this rebate, if you incurred the expenses as an employee, use guide T4044, Employment Expenses. If you incurred the expenses as a member of a partnership, use guide RC4091, GST/HST Rebate for Partners. These guides list the expenses that qualify. They also include Form GST370, Employee and Partner GST/HST Rebate Application, which you need to make your claim. Attach a completed copy of this form to your return, and enter on line 457 the rebate you are claiming.

Notes
Generally, you have to include in income any rebate you receive on the return for the year in which you receive it. For example, you may claim a rebate on your return for 2005. If we allow your claim and assess that return in 2006, you have to report the rebate on your return for 2006.

You may have received a GST/HST rebate in 2005. If you did, and you were an employee, see line 104. If you are a partner, contact our Business Enquiries service by calling 1-800-959-5525 (calls within Canada and the United States). If you are outside Canada and the United States, call the International Tax Services Office.

⬤▮▲Line 476 - Tax paid by instalments

Enter the total instalment payments you made for your taxes for 2005. In February 2006, we will issue you Form INNS1, Instalment Reminder, or Form INNS2, Instalment Payment Summary, which shows your total instalment payments for 2005 that we have on record. To view your instalment account, visit My Account on our Web site. If you made an instalment payment for your taxes for 2005 that does not appear on this reminder or summary, also include that amount on line 476.

Note
If tax was withheld from your income, claim on line 437 the amounts shown on your information slips.

Non-residents and non-residents electing under section 217 – If you disposed of taxable Canadian property in 2005, enter the tax payment you made to us, as shown on your certificate of compliance (Form T2064, Certificate – Proposed Disposition of Property by a Non-Resident of Canada, or Form T2068, Certificate – The Disposition of Property by a Non-Resident of Canada). Attach copy 2 of your certificate of compliance to your return.

⬤▮▲Line 484 - Refund

If your total payable (line 435) is less than your total credits (line 482), enter the difference on line 484. This amount is your refund. Generally, if the difference is $2 or less for 2005, you will not receive a refund.

Note
One person's refund cannot be transferred to pay another person's balance owing.

Although you may be entitled to a refund for 2005, we may keep some or all of it to:

• apply against any amount you owe us or are about to owe us;
• satisfy a garnishment order under the Family Orders and Agreements Enforcement Assistance Act; or
• apply against certain other outstanding federal, provincial, or territorial government debts, such as student loans, Employment Insurance and social assistance benefit overpayments, Immigration loans, and training allowance overpayments.

If you pay your taxes by instalments, you can attach a note to your return to ask us to transfer your refund to your instalment account for 2006. We will transfer your full refund and consider such a payment to have been received on the date that we assess your return.

To view your refund information, visit My Account on our Web site.

Direct deposit

You can have your income tax refund, as well as your GST/HST credit and/or Canada Child Tax Benefit (CCTB) payments deposited directly into your account at a financial institution in Canada.

To start direct deposit, or to change information you already gave us, complete the "Direct deposit - Start or change" section on page 4 of your return. You do not have to complete this area if you already have direct deposit service and the information you already gave us has not changed. Your direct deposit request will stay in effect until you change the information or cancel the service.

If you want your CCTB payments deposited into a different account, you will have to send us, either with your return or separately, a completed Form T1-DD(1), Direct Deposit Request - Individuals.

If you are changing the account into which we deposit a payment, do not close the old account before we deposit the payment into the new account. If your financial institution advises us that you have a new account, we may deposit your payments into the new account.

If, for any reason, we cannot deposit a payment into your account, we will mail a cheque to you at the address we have on file.

If you need help to complete the direct deposit information, or to cancel the service for one or more of these payments, contact us.

⬤▮▲Line 485 - Balance owing

If your total payable (line 435) is more than your total credits (line 482), enter the difference on line 485. This amount is your balance owing. Your balance is due no later than April 30, 2006. Generally, if the difference is $2 or less for 2005, you do not have to make a payment.

Note
When a due date falls on a Saturday, Sunday, or a holiday recognized by the CRA, we consider your return to be filed on time or your payment to be paid on time if we receive it or it is postmarked on the next business day.

If the difference is more than $2, and you or your representative has a bank account at a financial institution in Canada through which you can make a payment, you or your representative can make your payment in several different ways:

• You may be able to pay electronically using your Canadian financial institution's telephone or Internet banking services. Most financial institutions allow you to schedule future-dated payments. For more information, visit electronic payments or contact your financial institution
• You can make your payment free of charge at your Canadian financial institution in Canada. To do so, you have to use the remittance form in your personalized tax package (if you received one) or Form T7DR(A), which you can get by contacting us.
• You can attach to the front of your return a cheque or money order made out to the Receiver General. Enter this amount on line 486.
• You can send us a cheque or money order with the remittance form in your personalized tax package (if you received one) or with Form T7DR(A), which you can get from us. Mail the form and your cheque or money order to:
  Canada Revenue Agency, P.O. Box 9659, Station T, Ottawa ON K1G 6L7 CANADA.

If you or your representative do not have a bank account at a financial institution in Canada, you or your representative can make your payment using:

• an international money order drawn in Canadian dollars;
• a bank draft in Canadian funds drawn on a Canadian bank (available at most foreign financial institutions); or
• a cheque drawn in the currency of the country in which the financial institution is located. We will use the exchange rate in effect at the time we cash your cheque.

We cannot immediately negotiate a cheque drawn in Canadian funds on a financial institution outside Canada, as it may take several weeks to collect the funds from the foreign financial institution. Therefore, you should remit your payment early to avoid or reduce any interest charges. Once we receive the funds from the foreign financial institution, we will update the account accordingly. Please note that due to the limits set by the banking community, we cannot accept cheques drawn in Canadian funds on a financial institution outside Canada for less than $400 Canadian.

Note
To help us process your payment correctly, please write your social insurance number, individual tax number, or temporary taxation number on the back of your cheque or money order. For more information, see "Social insurance number".

Do not mail us cash or include it with your return.

You can file your return early and make a post-dated payment as late as April 30. In that case, if we process your return before the date of the payment, your payment will appear on your Notice of Assessment, but it will not reduce your balance owing. We will credit your account on the date of the payment and then send you a revised statement of your account.

If you make a payment with a cheque that your financial institution does not honour (including a cheque on which you put a “stop payment”), we will charge you a fee.

To view your information on your account balance and payment on filing, visit My Account on our Web site.

Making a payment arrangement - If you cannot pay your balance owing on or before April 30, 2006, we will accept a payment arrangement only after you have reasonably tried to obtain the necessary funds by borrowing or re arranging your financial affairs. If you cannot pay the balance in full, you should contact your tax services office to discuss a mutually acceptable payment arrangement based on your ability to pay. If you do not know your tax services office, call the International Tax Services Office. We still will charge daily compound interest on any outstanding balance starting May 1, 2006, until you pay it in full.

Your failure to proceed with timely action to resolve your tax arrears can lead to serious measures by CRA including legal action such as garnisheeing your income or your bank account, or initiating other legal action such as seizing and selling your assets.

Previous page | Table of contents | Next page