On this page…

• What's new for 2006?
• Are you using the tax and benefit package for the correct province or territory?
• Did You Know?
• National Register of Electors
  • If you check "Yes"
  • If you check "No" (or do not make a choice)
  • Confidentiality
  • Contacting Elections Canada
• Let our symbols be your guide…
• Is this tax and benefit package for you?
• At your service
  • What if you need help?
  • Internet services
  • Getting personal tax information
  • Publications
• General Information
  • Determining your residency status
• Before you start
  • Do you have to file a return?
  • What date is your return for 2006 due?
  • What penalties and interest do we charge?
  • Social insurance number (SIN)
  • Canada Child Tax Benefit (CCTB) and Child Disability Benefit (CDB)
  • Universal Child Care Benefit (UCCB)
  • Is this tax and benefit package for you?
  • What tax and benefit package should you use if this one is not for you?
• Electing under section 217
• Electing under section 216.1
• Getting Started
  • What do you include with your return and what records do you keep?
  • What if you are missing information?
• After you file
  • What happens to your return after we receive it?
  • When can you expect your refund?
  • When will we pay interest?
  • Income tax problems?
  • What should you do if you disagree?
  • How do you change a return?
  • Can you file a return to claim a refund for a previous year?
  • What is a voluntary disclosure?
  • What should you do if you move?
  • Should you be paying your taxes by instalments?
• Identification
  • Personal label
  • Information about your residence
  • Marital status
  • Your spouse or common-law partner's net world income
  • Your spouse or common-law partner's Universal Child Care Benefit
• GST/HST credit application
  • Are you eligible for the GST/HST credit?
  • Receiving the credit for your children
  • Do you need to contact us?
• Information about your residency status

What's new for 2006?

We list the major changes below, including income tax changes that have been announced but were not law at the time of printing. If they become law as proposed, they will be effective for 2006 or as of the dates indicated. For more details on these and other changes, see the areas outlined in a black frame.

Universal Child Care Benefit (line 117) - Since July 2006, if you are an eligible individual responsible for the care of a child under 6 years of age, you are eligible to receive $100 per month for each qualified dependant. See Universal Child Care Benefit and line 117 for details.

Provincial parental insurance plan (lines 119, 223, 375, 376, 378, and 450) - This is a new income replacement plan for residents of Quebec. See your guide from Revenu Québec for details.

Taxable amount of dividends (eligible and other than eligible) from taxable Canadian corporations (line 120) - There are now two types of dividends. See line 120 for details.

Taxable capital gains (line 127) - The capital gains inclusion rate, for donations made After May 1, 2006, of publicly-listed securities and ecologically-sensitive land to qualified donees, is zero. See Pamphlet P113, Gifts and Income Tax, for details.

Other income (line 130) - Certain scholarships, fellowships, and bursaries are excluded from income if you are entitled to claim the education amount. See line 130 for details.

Tradesperson's tools expenses (line 229) - A portion of the cost of eligible tools acquired by you as an employed tradesperson after May 1, 2006, is deductible. See Guide T4044, Employment Expenses, for details.

Non-capital losses of other years (line 252) - For non-capital losses incurred in tax years after December 31, 2005, the loss carry forward period has been extended to 20 years.

Capital gains deduction (line 254) - A capital gain resulting from a disposition of qualified fishing property made After May 1, 2006, is eligible for this deduction.

Age Amount (line 301) - The maximum amount is increased to $5,066.

Canada employment amount (line 363) - All employees are eligible to claim this credit. See line 363 for details.

Public transit passes amount (line 364) - You can claim the cost of public transit passes after June 30, 2006. See line 364 for details.

Pension income amount (line 314) - The maximum amount of eligible pension income that can be used to calculate the credit is increased to $2,000.

Textbook amount (line 323) - You can now claim an amount for textbooks if you are entitled to claim the education amount. See Textbook amount for details.

Investment tax credit (line 412) - The deadline to claim a tax credid for renounced Canadian exploration expenses has been extended. See line 412 for details.

For investment tax credits earned in a year that ends after 2005, the carry forward period has been extended to 20 years.

An apprentice job creation tax credit is available if you are a self-employed individual who employs an eligible apprentice in your business. See Form T2038(IND), Investment Tax Credit (Individuals) for details.

Federal dividend tax credit (line 425) - There are new calculations for this credit. See line 425 for details.

Refundable medical expense supplement (line 452) - The maximum amount is increased to $1000. See line 452 for details.

Are you using the correct tax and benefit package?

It is important to use the correct package so that your provincial or territorial tax and credits can be calculated properly. To make sure you are using the correct package, see "Is this tax and benefit package for you?" and "What tax and benefit package should you use if this one is not for you?".

Please check the "Yes" box on page 1 of your return if you are a Canadian citizen and you want to authorize the Canada Revenue Agency (CRA) to provide your name, address, and date of birth to Elections Canada. Elections Canada will use this information to make sure that the National Register of Electors is kept up to date. Your authorization is needed every year, whether your information has changed or not.

Please check the "No" box on page 1 of your return if you do NOT authorize the Canada Revenue Agency (CRA) to provide your name, address and date of birth to Elections Canada.

National Register of Electors

The National Register of Electors is an automated data base maintained by Elections Canada, containing the name, address, and date of birth of eligible electors (Canadian citizens who are 18 years of age or older). The National Register of Electors is used to produce electoral lists without having to conduct door-to-door enumerations, saving approximately $30 million for each federal general election or referendum.

If you check "Yes"

• You authorize the CRA to give only your name, address, and date of birth to Elections Canada, to ensure that your information on the National Register of Electors is up to date.
• If you are an eligible elector who is not already on the National Register of Electors, Elections Canada will accept this as your request to have your information added to it.

Notes
The CRA updates the information provided to Elections Canada several times throughout the year. Your authorization remains in effect for a period of 12 months. Therefore, if you move during this period, and you advise the CRA of your new address, the CRA will advise Elections Canada the next time information is provided.

If, during the year, you change your mind about the CRA sending your information to Elections Canada, please contact the CRA at 1-800-959-8281 to have your consent removed. However, your information will remain on the National Register of Electors. To remove your information from the Register, see "Confidentiality", below.

If you check "No" (or do not make a choice)

• The CRA will not give any of your information to Elections Canada.
• You will not lose your right to vote.
• Elections Canada will not remove your information from the National Register of Electors if it is already there.
• If there is an election or referendum, your information may not be up to date on electoral lists produced from the National Register of Electors. In that case, you will have to take the necessary steps to correct your information.

Confidentiality

Information on the National Register of Electors will be used only for electoral purposes as permitted under the Canada Elections Act. You can write to Elections Canada requesting not to be included on the National Register of Electors, or that your information not be shared with provinces, territories, municipalities, and school boards that use the National Register of Electors to produce their electoral lists.

Contacting Elections Canada

Let our symbols be your guide…

This guide gives information on the income you need to report, and the deductions and credits you are entitled to claim, on your 2006 return. It will help you determine your tax payable and any refund you are entitled to.

Beginning with “Line 101 - Employment income”, we will lead you directly to the information that may apply to you by using a symbol. Before you start, it is important that you:

• read the information from “At your service” to “Line 101 - Employment income”
• determine whether, in 2006, you were a deemed resident of Canada, a non-resident of Canada, or a non-resident of Canada electing under section 217 of the Income Tax Act ;
• locate the symbol (see below) that applies to your situation; and
• as you complete your return and you come to a line that applies to you, look up the corresponding line number in this guide. If your symbol appears beside the line number, the information for that line may apply to you. If your symbol does not appear, then the information does not apply to you.

Is this tax and benefit package for you?

Use this package if any of the following applies to you:

• You were a deemed resident of Canada on December 31, 2006. For exceptions, see the section "What tax and benefit package should you use if this one is not for you?".
• You were a non-resident of Canada throughout 2006 and you are filing a return to elect under section 217 or section 216.1.
• You were a non-resident of Canada throughout 2006 and you are reporting Canadian-source income other than from employment in Canada, from a business with a permanent establishment in Canada, from rental income from real property located in Canada, or from timber royalties on a timber resource property or a timber limit in Canada. For more information get Guide T4058, Non-Residents and Income Tax.

At your service

What if you need help?

In this guide, we use plain language to explain the most common tax situations. If you need more help after reading this guide, you can contact us (see Contacting us) or use our other services.

Internet services

General information, forms, and publications are accessible by topic and by taxpayer group in our Web site. Below is a list of the most popular topics and their associated Web site addresses:

My Account

My Account is a secure online service that gives you the convenience and flexibility of viewing and managing your personalized information, such as:

• your identification;
• refund and/or balance owing;
• instalment account;
• Registered retirement savings plan (RRSP);
• Home Buyers' Plan (HBP);
• Lifelong Learning Plan (LLP);
• direct deposit information;
• Canada Child Tax Benefit (CCTB);
• Universal Child Care Benefit (UCCB); and
• GST/HST credit and related provincial and territorial programs.

My Account also offers you different services such as:

• filing an objection online;
• authorizing a representative;
• changing your address;

Register for My Account

To use the services under My Account, you have to register for a Government of Canada epass that will give you a User ID and password. We will mail you a CRA Security Code, which will take approximately five business days to receive (15 days if outside Canada and the United States). Once you receive your security code, you will be required to enter it the first time you use My Account to access your personal tax and benefit information. For more information, refer to My Account.

Getting personal tax information

The personal information that you provide on your income tax forms is collected under the authority of the federal, provincial, and territorial income tax acts and will be used to administer and enforce these acts and their regulations. For more information, refer to Personal Information Bank Number CRA/P-PU-005 at http://infosource.gc.ca or in the Info Source book, or contact the International Tax Services Office.

Your personal information is confidential. However, you can authorize someone (such as your spouse or common-law partner) to represent you to discuss your file. See "Representatives" below. In certain cases, we give some of your information to other government bodies to administer the law. In all cases, we follow strict procedures before giving your information to anyone.

If you call us and ask for personal tax information, we will ask you to identify yourself and give information about the contents of your return to protect this information. If you call before May 1, use your return for 2005. After April 30, use your return for 2006.

Representatives

You can authorize a representative (such as your spouse or common-law partner, tax preparer, or accountant) to get information on your tax matters and submit or provide information on your behalf. We will accept information from and/or provide information to your representative only after we are satisfied that you have authorized us to do so either through My Account or in writing. Your authorization will stay in effect until it is cancelled by you, it reaches the expiry date you choose, or on notification of your death.

Authorizations received between mid-March and mid-July will be processed within four weeks, and any authorizations received between mid-July and mid-March will be processed within one week.

Note
Authorizing a new representative does not cancel your existing authorizations. You can now cancel any authorization by using My Account or by telephone.

If your representative calls us and asks for your personal tax information, we will give this information only if we have received a completed Form T1013, Authorizing or Cancelling a Representative, you have completed the authorization through My Account "Authorize my Representative", or we received a letter signed by you that contains the same information. After we confirm that we have your permission, we also will ask your representative for information about the contents of your return. A representative who calls before May 1 should use your return for 2005. A representative who calls after April 30 should use your return for 2006.

If you were the legal representative of a deceased person, get Guide T4011, Preparing Returns for Deceased Persons, to know what documents are required.

T.I.P.S.

For personal and general tax information by telephone, you can use T.I.P.S. This service is available for callers within Canada and the United States.

Contacting us

See International Tax Services Office for the address, telephone numbers, and fax number of the International Tax Services Office.

Our goal is to respond to your call within two minutes in the official language of your choice. However, you may have difficulty reaching us during peak periods.

You can send us correspondence by fax. However, because of the nature of fax services, we are not responsible for misdirected, incomplete, or illegible documents.

In-person appointments - If we are unable to resolve your enquiry by telephone, you can meet with an agent in person at a Tax Services Office. Call us and an agent can make an appointment for you.

Publications

Throughout this guide, we mention forms, pamphlets, interpretation bulletins, information circulars, and other guides that give more details on specific tax topics.

You can get most of our publications, by visiting our Forms and publications page or by calling 1-800-959-2221 (from Canada or the U.S.) from 8:15 a.m. to 5:00 p.m.. If you are outside Canada and the U.S., call the International Tax Services Office.

You can also get the General Income Tax and Benefit Guide for Non-Residents and Deemed Residents of Canada from any Canadian embassy, high commission, or consulate.

General Information

Determining your residency status

Were you a non resident of Canada in 2006?

You are a non-resident of Canada for tax purposes throughout any period in which youdo nothave significant residential ties (as defined below) in Canada and you are not a deemed resident of Canada.

What income should you report? - Report your 2006 income from Canadian sources such as the taxable part of your scholarships, fellowships, bursaries, net research grants, income from a business, and taxable capital gains from disposing of taxable Canadian property, as indicated under the income lines applicable to non-residents of Canada in the guide.

What are residential ties?

Significant residential ties almost always include a home in Canada, a spouse or common-law partner, and dependants who stayed in Canada while you were living outside Canada. Other ties that may contribute to having significant ties include a Canadian driver’s licence, Canadian bank accounts or credit cards, provincial or territorial hospitalization insurance coverage, personal property, and social ties in Canada.

For details on residential ties, see Interpretation Bulletin IT-221, Determination of an Individual’s Residence Status, or contact the International Tax Services Office.

Were you a non-resident of Canada in 2006 who wants to elect under section 217?

Under section 217 of the Income Tax Act, you can choose to report certain types of Canadian-source income on a Canadian return and pay tax on that income using an alternate taxing method. Choosing to do this is called “electing under section 217”.

For more information, including the types of income to which section 217 applies, see Electing under section 217.

Were you a non-resident of Canada in 2006 who wants to elect under section 216.1?

Under section 216.1 of the Income Tax Act, if you are an actor who is a non-resident of Canada, you can choose to report amounts paid, credited, or provided as a benefit to you for film and video acting services rendered in Canada on a Canadian return and pay tax on that income using an alternate taxing method. Choosing to do this is called “electing under section 216.1”.

For detailed information see Electing under section 216.1.

Were you a deemed non-resident of Canada in 2006?

You may be a deemed non-resident of Canada for tax purposes if you were a resident of Canada in 2006, and, under a tax treaty, you were considered to be a resident of another country. If this is the case, the same rules apply to you as to a non-resident of Canada (including the way you complete your return).

Were you a deemed resident of Canada in 2006?

You were a deemed resident of Canada for tax purposes if you did not have significant residential ties in Canada, but you stayed here for 183 days or more in 2006 and, under a tax treaty, you were not considered a resident of another country.

You were also a deemed resident of Canada if you lived outside Canada during 2006, you did not have significant residential ties in Canada, and you were:

• a member of the Canadian Forces at any time in 2006;
• a member of the Canadian Forces overseas school staff and you choose to file a return as a deemed resident of Canada (if you left Canada during 2006, see ”Were you a member of the overseas Canadian Forces school staff who left Canada in 2006?” );
• a federal or provincial government employee and you were either resident of Canada just before being posted abroad or you received a representation allowance for 2006;
• a person working under a Canadian International Development Agency (CIDA) assistance program, if you were a resident of Canada at any time during the three-month period just before you began your duties abroad;
• a person who, under a tax treaty, agreement or convention between Canada and another country, is exempt from tax on 90% or more of your income from all sources in your new country of residence because of your relationship to a resident (including a deemed resident) of Canada; or
• a dependent child of one of the first four persons described above and your net world income in 2006 was not more than the basic personal amount (see line 300) in Canadian dollars.

Note
If you lived with and were the spouse or common-law partner of one of the first four persons described above at any time during 2006, and you ceased to be a resident of Canada before February 24, 1998, you are a deemed resident of Canada unless you choose not to be. For details, contact the International Tax Services Office.

What income should you report? - Report your 2006 world income. World income is income from all sources both inside and outside Canada.

Were you a member of the overseas Canadian Forces school staff who left Canada in 2006?

If so, and you severed your residential ties, you became a non-resident of Canada. If this is your situation, you should use the 2006 tax package for the province or territory where you lived just before you left Canada. You should also get the Guide T4056, Emigrants and Income Tax , for the special rules that apply to you.

However, you can file as a deemed resident of Canada while you are serving abroad. If you make this choice, you should use the 2006 tax package for the province or territory where you lived just before you left Canada. In future years, you will use the tax package for non-residents and deemed residents of Canada.

Did you live in Quebec just before you left Canada?

Even though we may consider you to be a deemed resident of Canada, under Quebec law you may also be considered a deemed resident of that province. If this is the case, you may have to pay Quebec income tax while you are serving abroad.

To avoid double taxation (surtax for non-residents and deemed residents of Canada plus Quebec income tax), attach a note to your return telling us that you are filing a Quebec provincial return, and that you are asking for relief from the surtax for non-resident and deemed resident of Canada.

Before you start

Do you have to file a return?

You have to file a return for 2006 if any of the following situations apply:

• You have to pay tax for 2006.
• We sent you a request to file a return.
• You were a deemed resident of Canada at any time in the year and you disposed of property in 2006 (for example, if you sold real estate or shares) or you realized a taxable capital gain (for example, if a mutual fund or trust attributed amounts to you, or you are reporting a capital gains reserve you claimed on your 2005 return).
• You were a non-resident of Canada throughout 2006 and you disposed of taxable Canadian property in 2006.
• You have to repay any of your Old Age Security or Employment Insurance benefits. See line 235 for details. If you were a non-resident of Canada in 2006, you will use the T1136, Old Age Security Return of Income, to pay back all or part of your Old Age Security.
• You have not repaid all of the amounts you withdrew from your registered retirement savings plan (RRSP) under the Home Buyers' Plan or the Lifelong Learning Plan. For details, see Guide RC4135, Home Buyers' Plan (HBP), or Guide RC4112, Lifelong Learning Plan (LLP).
• You have to contribute to the Canada Pension Plan (CPP). This can apply if, for 2006, the total of your net self-employment income and pensionable employment income is more than $3,500. See line 222 for details.
• You filed Form NR5, Application by a Non-Resident of Canada for a Reduction in the Amount of Non-Resident Tax Required to Be Withheld, for 2006 and we approved it. If this is your situation, you have to file a return electing under section 217 of the Income Tax Act (see Form NR5 for exceptions).
• You filed Form NR6, Undertaking to File an Income Tax Return by a Non-Resident Receiving Rent From Real Property or Receiving a Timber Royalty, for 2006 and we approved it. If this is your situation, you have to file a return electing under section 216 of the Income Tax Act.
• You filed the Application by a non-resident of Canada (individual) for a reduction in the amount of non-resident tax required to be withheld on income earned from acting in a film or video production for 2006 and we approved it. If this is your situation, you have to file a return electing under section 216.1 of the Income Tax Act.

Even if none of these requirements applies, you still may want to file a return if any of the following situations apply:

• You want to claim a refund.
• You want to apply for the GST/HST credit. For example, you may be eligible if you turn 19 before April 2008, and you are a deemed resident of Canada.
• You or your spouse or common-law partner want to begin or continue receiving Canada Child Tax Benefit payments.
• You have incurred a non-capital loss (see line 236) in 2006 that you want to be able to apply in other years.
• You want to carry forward the unused portion of your tuition, education, and textbook amounts (see line 323).
• You want to report income for which you could contribute to an RRSP, in order to keep your RRSP deduction limit for future years up to date.
• You want to carry forward the unused investment tax credit on expenditures you incurred during the current year (see line 412).

What date is your return for 2006 due?

Generally, your return for 2006 has to be filed on or before April 30, 2007.

Note
If you file your return after April 30, 2007, your GST/HST credit, Canada Child Tax Benefit, and Old Age Security benefit payments may be delayed.

Self-employed persons - If you or your spouse or common-law partner carried on a business in 2006 (other than a business whose expenditures are primarily in connection with a tax shelter), your return for 2006 has to be filed on or before June 15, 2007. However, if you have a balance owing for 2006, you still have to pay it on or before April 30, 2007. For details of how to make your payment, see line 485.

Non-residents electing under section 217 - For information on when your return is due, see “When is your section 217 return due?”.

Non-residents electing under section 216.1 - For information on when your return is due, see “When is your section 216.1 return due?”.

Deceased persons

If you are the legal representative (the executor, administrator, or liquidator) of the estate of an individual who died in 2006, you may have to file a return for 2006 for that individual. Get Guide T4011, Preparing Returns for Deceased Persons, for details about your filing requirements and options.

Note
If you received income in 2006 for a person who died in 2005 or earlier, do not file an individual return for 2006 for that income on behalf of that person. However, you may have to file a T3 Trust Income Tax and Information Return for the estate.

Exception to due date of your return

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. For more information, visit our Important dates page.

What penalties and interest do we charge?

Penalties

If you owe tax for 2006 and do not file your return for 2006 within the dates we specify under "What date is your return for 2006 due?" in the previous section, we will charge you a late-filing penalty. The penalty is 5% of your 2006 balance owing, plus 1% of your balance owing for each full month that your return is late, to a maximum of 12 months. Your late-filing penalty may be higher if we charged you a late-filing penalty on a return for any of the three previous years.

We may waive or cancel this penalty (as well as any interest that may apply; see the next section) if you file your return late because of circumstances beyond your control. If this happens, send a letter to us separately giving the reasons why you filed your return late. Only requests relating to tax years ending in any of the 10 calendar years before the year you make the request will be considered. For example, a request made in 2007 must relate to the 1997 or a subsequent tax year to be considered. For details, get Information Circular IC92-2, Guidelines for the cancellation and Waiver of Interest and Penalties.

You may have to pay a penalty for any amounts you fail to report on your return for 2006. If you also failed to report an amount on your return for 2003, 2004, or 2005, you may have to pay another penalty. However, if you tell us about an amount you failed to report, we may waive these penalties. See "What is a voluntary disclosure?".

Non-residents electing under section 217 - If you file your 2006 section 217 return after June 30, 2007, your election is not valid. If the correct amount of non-resident tax was not withheld, we will send you a non-resident tax assessment.

Non-residents electing under section 216.1 - If you file your section 216.1 return after the due date, your election is not valid. The 23% non-resident withholding tax will be considered the final tax liability.

Interest

If you have a balance owing for 2006, we charge compound daily interest starting May 1, 2007, on any unpaid amounts owing for 2006. This includes any balance owing if we reassess your return. In addition, we will charge you interest on the penalties indicated in the previous section, starting the day after your return is due.

Social insurance number (SIN)

Your social insurance number is the authorized number for income tax purposes under section 237 of the Income Tax Act and is used under certain federal programs. You have to give it to anyone who prepares an information slip (such as a T3, T4, or T5 slip) for you. Each time you do not give it when you are supposed to, you may have to pay a $100 penalty. You also have to give it to us when you ask us for personal tax information. Check your slips. If your SIN is missing or is incorrect, advise the slip preparer.

If you have requested, but not yet received a SIN and the filing deadline is near, file your return without your SIN to avoid the late-filing penalty and interest charges, if any. Attach a note to your return to let us know. We will assign you a temporary taxation number (TTN). Please keep a record of that number in case we need to contact you.

If you are not eligible for a SIN, complete Form T1261, Application for a Canada Revenue Agency Individual Tax Number (ITN) for Non-Residents. Do not complete this form if you already have a SIN, individual tax number (ITN), or temporary taxation number (TTN).

Your SIN card is not a piece of identification, and it should be kept in a safe place. For more information, or to get an application for a SIN, contact Human Resources and Social Development Canada or visit their Web site at www.hrsdc.gc.ca. You will find the addresses and telephone numbers of their offices on the Web page or in the government section of your telephone book.

If you are outside Canada, you can write to:

Social Insurance Registration,
P.O. Box 7000, Bathurst NB
E2A 4T1,
CANADA,

or call 506-548-7961.

Canada Child Tax Benefit (CCTB) and Child Disability Benefit (CDB)

If you are a deemed resident of Canada or if you are the spouse or common-law partner of a deemed resident of Canada, and you are responsible for the care of a child who is under 18, you can apply for the CCTB for that child. To do so, submit a completed Form RC66, Canada Child Tax Benefit Application, along with any other documents required, as soon as possible after the child is born or begins to live with you. If you are a permanent resident, temporary resident, or protected person (refugee) as defined in the Immigration and Refugee Protection Act, you should apply as soon as possible after you and your child arrive in Canada.

In addition to the CCTB, you can also receive a CDB if your child meets the criteria for the disability amount and we have approved Form T2201, Disability Tax Credit Certificate, for the child.

The maximum annual CDB is $2,300 for each child who is eligible for the Disability Tax Credit.

The CCTB and CDB are based on the net income (line 236) shown on your return and, if applicable, your spouse or common-law partner's return minus any amount you or your spouse or common-law partner reported on line 117. Therefore, to qualify for these benefits, you both have to file a return every year, even if there is no income to report.

However, if you are the non-resident spouse or common-law partner of a deemed resident of Canada, you will have to file Form CTB9, Canada Child Tax Benefit Statement of Income, instead of filing a return for purposes of the CCTB.

Once you have applied for these benefits, you have to advise us immediately of any of the following changes (as well as the date it happened or will happen):

• the child is no longer in your care, stops living with you, or dies;
• you move (if we do not have your new address, your payments may stop, whether you receive them by direct deposit or by cheque);
• your marital status changes (but if you separate due to a breakdown in your relationship, wait until you are separated for at least 90 days before submitting Form RC65, Marital Status Change);
• you receive your payments by direct deposit (see Direct deposit) and your banking information changes; or
• your or your spouse or common-law partner's immigration or residency status changes.

Certain changes could mean you have to pay back some benefits if you wait to notify us of any of these changes.

For more information, get Pamphlet T4114, Your Canada Child Tax Benefit, or call us at 1-800-387-1193. If you are outside of Canada, call the International Tax Services Office.

Universal Child Care Benefit (UCCB)

Since July 2006, if you are an eligible individual responsible for the care of a child under 6 years of age, you are eligible to receive $100 per month for each qualified dependant.

You do not need to apply for the UCCB if either of the following situations applies to you. The benefit will be sent to you automatically if:

• you already receive the CCTB or CDB (if applicable) for your children under six years of age; or
• you have applied for the CCTB or CDB (if applicable) for your children under six years of age, and do not receive it (perhaps because your family income is too high).

If neither of these situations applies to you, then you will have to apply for the UCCB by completing Form RC66, Canada Child Tax Benefit Application.

While the UCCB is taxable (on line 117 of the return) in the hands of the spouse or common-law partner with the lower net world income, it will not be taken into account in calculating your GST/HST credit, your CCTB payments, social benefits repayment (line 235), and the refundable medical expense supplement (line 452).

For more information, visit our Universal Child Care benefit page.

Is this tax and benefit package for you?

Use this package if any of the following applies to you:

You were a deemed resident of Canada on December 31, 2006. For exceptions, see “What tax and benefit package should you use if this one is not for you?” below.

You were a non-resident of Canada throughout 2006 and you are filing a return to elect under section 217 or section 216.1.

You were a non-resident of Canada throughout 2006 and you are reporting Canadian-source income other than from employment in Canada, from a business with a permanent establishment in Canada, from rental income from real property located in Canada, or from timber royalties on a timber resource property or a timber limit in Canada. For more information get Guide T4058, Non-Residents and Income Tax.

What tax and benefit package should you use if this one is not for you?

• If you were a deemed resident of Canada on December 31, 2006, and you are reporting only income from a business with a permanent establishment in a province or territory of Canada, use the package for that province or territory.
• If you were a deemed resident of Canada and you returned to Canada to live in 2006, use the package for the province or territory where you lived on December 31, 2006.
• If you were a non-resident of Canada throughout 2006 and you are reporting only income from employmentin Canada, or from a business with a permanent establishment in Canada, use the package for the province or territory where you earned the income. You should also get Guide T4058, Non-Residents and Income Tax, for the special rules that apply.
  
  If you are also reporting other types of Canadian-source income (such as scholarships, fellowships, bursaries, research grants, or capital gains from disposing of taxable Canadian property), you will need Form T2203, Provincial and Territorial Taxes for 2006 - Multiple Jurisdictions, to calculate your tax payable.
• If you were a non-resident of Canada during 2006 and you received rental income from real property located in Canada or timber royalties on a timber resource property or a timber limit in Canada, get Guide T4144, Income Tax Guide for Electing Under Section 216.
• If you resided outside Canada on December 31, 2006, but you maintained significant residential ties in Canada, generally we consider you to be a factual resident of Canada. Use the package for the province or territory where you kept your significant residential ties. However, this may not apply if you were a factual resident who, under a tax treaty, is considered to be a resident of another country. For details, see the section called “Were you a deemed non-resident of Canada in 2006?”.
• If you were a newcomer to Canada in 2006, use the package for the province or territory where you resided on December 31, 2006. You should also get Pamphlet T4055, Newcomers to Canada, for the special rules that apply.
• If you emigrated from Canada during 2006, use the package for the province or territory where you resided on the day you left Canada. You should also get Guide T4056, Emigrants and Income Tax, for the special rules that apply.

How can you get the tax and benefit package you need?

You should have received the package you need based on our records. However, if, after reading the above information, you cannot use this package, see "Publications" to find out how you can get the one you need.

Regardless of which tax package you use, send your return to the International Tax Services Office. If you provide services in the film and television industry, send your income tax return to the Film Services Unit that serves the province or territory where the services were rendered.

Getting started

Gather all the documents needed to complete your return. This includes your information slips (such as NR4, T3, T4, T4A, T4A-NR and T5 slips) and receipts for any deductions or credits you plan to claim. As you complete your return, when you come to a line that applies to you, you can look it up in this guide, or see the back of your information slips for more instructions. For more information, see the following section "What do you include with your return and what records do you keep?".

Send your return to the International Tax Services Office. If you are preparing other people's returns, mail or deliver each person's return in a separate envelope. However, if you are filing returns for more than one year for the same person, put them all in one envelope.

Note
If you have a farming business and you are participating in the Canadian Agricultural Income Stabilization Program (CAIS Program), use the envelope contained in Guide RC4060, Farming Income and the CAIS Program, or Guide RC4408, Farming Income and the CAIS Program Harmonized Guide.

What do you include with your return and what records do you keep?

Include one copy of each of your information slips with your return. Make sure you attach to your return your Schedule 1. The explanations in the guide and the return, schedules, or forms will tell you when to attach other supporting documents, such as certificates, forms, schedules, or official receipts.

If a tax professional will be preparing your return, show him or her your label sheet and all of your supporting documents, such as your information slips, receipts, Notice of Assessment from last year, and instalment payments summary (on Form INNS1 or Form INNS2).

If you make a claim without the required receipt, certificate, schedule, or form, we may disallow your claim. It could also delay the processing of your return.

Even if you do not have to attach certain supporting documents to your return, keep them in case we select your return for review. You should keep your supporting documents for six years.

You should also keep a copy of your return for 2006, the related Notice of Assessment, and any Notice of Reassessment. These can help you complete your return for 2007. For example, your notice for 2006 will tell you:

• your RRSP deduction limit for 2007;
• your unused RRSP contributions for 2007;
• your capital and non-capital loss balances; and
• your tuition, education, and textbook amounts carry-forward balance (see line 323).

Non-residents and non-residents electing under section 217 - You also need to include a completed Schedule A, Statement of World Income and Schedule B, Allowable Amount of Non-Refundable Tax Credits . If you are filing under section 217, you also need to include Schedule C, Electing Under Section 217 of the Income Tax Act.

What if you are missing information?

If you have to file a return for 2006, make sure you file it on time even if some slips or receipts are missing. If you know that you will not be able to get a slip by the due date, attach to your return a note stating the payer's name and address, the type of income involved, and what you are doing to get the slip. To calculate the income to report, and any related deductions and credits you can claim, use any stubs you may have, and attach them to your return.

Electing under section 217

Information concerning this election can be found in the chapter called "Electing under section 217".

Electing under section 216.1

Information concerning this election can be found in the chapter called "Electing under section 216.1".

After you file

What happens to your return after we receive it?

Each year we conduct a number of review activities that promote awareness of and compliance with the laws we administer. These reviews are an important part of the compliance activities we undertake to maintain the integrity of, and Canadians' confidence in, the Canadian tax system.

Our various examination programs take place at different periods during the year. Therefore, if you move, it is very important to make your change of address with us as soon as possible to allow us to communicate with you. If you plan to be away temporarily, you should complete Form T1013, Authorizing or Cancelling a Representative, to authorize a representative to act on your behalf.

When we receive your return, we usually review it based on the information you provided and send you a Notice of Assessment based on that review. However, we may select your return for a more detailed review before we assess it. If so, and we ask you to give us documents to verify the deductions or credits you claimed, your assessment may be delayed. We can also carry out a more detailed review after your return has been assessed to verify the income reported and the deductions or credits claimed.

When can you expect your refund?

We usually process returns in four to six weeks. However, we start to process returns in mid-February, so do not call before mid-March, even if you filed your return in January. If you filed your return on or before April 15, wait four weeks before you call. If you filed your return after April 15, wait six weeks before you call.

To find out about your 2006 refund, visit My Account or use Telerefund, one of our T.I.P.S. services.

When will we pay interest?

We will pay you compound daily interest on your tax refund for 2006. The calculation will start on whichever of the following three dates is latest:

• May 31, 2007;
• the 31st day after you file your return; or
• the day after you overpaid your taxes.

Income tax problems?

Our Enquiries staff is committed to resolving your tax-related problems by giving you accurate, timely, courteous, fair, and confidential answers to your questions. However, if a problem cannot be resolved, you can contact the Problem Resolution Program of the International Tax Services Office.

Our goal under this program is to resolve the problem within 15 working days. If we cannot do so (for example, if your situation is complex), a representative will contact you to confirm that we are working on the problem, to discuss it further (if necessary), and let you know when we expect to resolve it.

What should you do if you disagree?

If you disagree with your assessment or reassessment, contact the International Tax Services Office for more information. If you still disagree, you can make a formal objection by visiting My Account, or by sending a completed Form T400A, Objection - Income Tax Act, or a signed letter to the:

Chief of Appeals
Sudbury Tax Centre
1050 Notre Dame Avenue
Sudbury ON P3A 5C1
CANADA

Send your form or letter on or before whichever of the following two dates is later:

• one year after the due date for the return; or
• 90 days after the date of the Notice of Assessment or Notice of Reassessment.

How do you change a return?

If you need to make a change to any return you have sent us, do not file another return for that year. You should wait until you receive your Notice of Assessment before requesting any change to a return that has not been processed. Make your request by sending the following to the International Tax Services Office:

• a completed Form T1-ADJ, T1 Adjustment Request, or a signed letter providing the details of your request (including the years of the returns you want us to change), your social insurance number, temporary taxation number, or you individual tax number, your address, and a telephone number where we can reach you during the day; and
• supporting documents for the changes you want to make and, if you have not sent them to us before, supporting documents for your original claim.

Note
Send your Form T1-ADJ or letter separately from your return for 2006.

Only requests relating to tax years ending in any of the 10 calendar years before the year you make the request will be considered. For example, a request made in 2007 must relate to the 1997 or a subsequent tax year to be considered.

It usually takes eight weeks before we complete the adjustment and mail you a Notice of Reassessment.

Can you file a return to claim a refund for a previous year?

We will only consider a request relating to a refund for a previous tax year return that you are filing late (other than to make an election under section 217 and 216.1) if the return is for a tax year ending in any of the 10 calendar years before the year you make the request. For example, a request made in 2007 must relate to the 1997 or a subsequent tax year to be considered.

If you are filing a return for a year before 2006, make sure you attach receipts for all the deductions or credits you are claiming.

What is a voluntary disclosure?

Maybe you should have filed a return for a previous year (see "Do you have to file a return?") but you did not, or you sent us an incorrect return. If so, you can voluntarily file or correct that return under the Voluntary Disclosures Program, and pay only the taxes owing (plus interest) without penalty.

Note
This program does not apply to any return for which we have started a review.

For more details, and to see if your disclosure qualifies for this program, get Information Circular IC00-1R2, Voluntary Disclosures Program, or call the Voluntary Disclosures Program officer in the Enforcement and Disclosures Directorate of your tax services office or the International Tax Services Office. If you wish, you can discuss your situation first on a no-name basis.

Be sure to indicate clearly, on any disclosure you make, that you are submitting information under the Voluntary Disclosures Program.

What should you do if you move?

If you move, let us know your new address as soon as possible. If you use direct deposit, you also have to advise us if you change your account at your financial institution.

Keeping us informed will ensure that you keep getting any GST/HST credit, Universal Child Care Benefit payments and Canada Child Tax Benefit payments to which you may be entitled. Otherwise, your payments may stop, whether you receive them by cheque or by direct deposit. We also need to know your new address to mail you your return package for next year.

If you have a User ID and password to access the My Account online services, you can change your address by visiting My Account. If you do not have a User ID and password, you have to tell us your new address by phone, or in writing. If you are writing, send your letter to the International Tax Services Office. Make sure you sign it, and include your social insurance number, temporary taxation number, or individual tax number, your new address, and the date of your move. If you are writing for other people, including your spouse or common-law partner, include their social insurance numbers, temporary taxation number, or individual tax number, and have each of them sign the letter authorizing the change to his or her records.

Note
Because an individual's personal information is confidential, generally we will not provide a change of address to other government departments or Crown corporations, such as Canada Post. Similarly, they do not provide such information to us.

Should you be paying your taxes by instalments?

You may have to pay your taxes by instalments if not enough income tax is withheld from your income. To find out if you have to pay your taxes for 2007 by instalments, estimate your taxes and credits for 2007 using your return for 2006. Enter those amounts in the chart on the Federal Worksheet. The chart contains the most common factors to consider.

If our records show that you may have to pay your taxes by instalments, we will send you an Instalment Reminder in advance, showing the amount we suggest you pay and the date the payment is due.

For more information about instalment payments or instalment interest charges, get Pamphlet P110, Paying Your Income Tax by Instalments.

Identification

Follow the instructions on the return to complete this area. Incomplete or incorrect information may delay the processing of your return and any refund, credit, or benefit, such as any GST/HST credit and Canada Child Tax Benefit payments you may be entitled to receive.

Non-residents electing under section 217 - At the top of page 1 of your return, write “Section 217”.

Non-residents electing under section 216.1 - At the top of page 1 of your return, write “Actor’s Election”.

Personal label

If you have a personal label, attach it to your return. If your name, address, or social insurance number (SIN), temporary taxation number (TTN), or individual tax number (ITN), or your spouse or common-law partner's SIN, TTN, or ITN, is incorrect, put a line through the wrong information, and print your changes clearly on the label.

We may modify part of your address to meet Canada Post's requirements. Therefore, the address on your package, your Notice of Assessment, or other correspondence we send you may be different from the one you indicate on your return.

Information about your residence

On the first line, “Other” has already been entered for you as your province or territory of residence on December 31, 2006.

On the second line, if you were self-employed in 2006, enter the province or territory where you had a permanent business establishment. If you had a permanent business establishment outside Canada, enter “other”.

Marital status

Check the box that applied to your status on December 31, 2006. Check "Married" if you had a spouse (see below), or "Living common law" if you had a common-law partner (see below). You still have a spouse or common-law partner if you were living apart for reasons other than a breakdown in your relationship. Check one of the other boxes only if neither of the first two applied.

Spouse

This applies only to a person to whom you are legally married.

Common-law partner

This applies to a person who is not your spouse, with whom you are living in a conjugal relationship, and to whom at least one of the following situations applies. He or she:

In addition, an individual immediately becomes your common-law partner if you previously lived together in a conjugal relationship for at least 12 continuous months and you have resumed living together in such a relationship. Under proposed changes, this condition will no longer exist. The effect of this proposed change is that a person (other than a person described in b) or c) above) will be your common-law partner only after your current relationship with that person has lasted at least 12 continuous months. This proposed change will apply to 2001 and later years.

Reference to "12 continuous months" in this definition includes any period that you were separated for less than 90 days because of a breakdown in the relationship.

Your spouse or common-law partner's net world income

If your spouse or common-law partner was a deemed resident of Canada in 2006, your spouse or common-law partner’s net world income is the amount on line 236 of your spouse or common-law partner's return, or the amount that it would be if he or she filed a return.

If your spouse or common-law partner was a non-resident of Canada in 2006, your spouse or common-law partner’s net world income is his or her net income for 2006 from all sources both inside and outside Canada.

Enter this amount even if it is zero. We use this information to calculate the GST/HST credit and certain other credits and benefits.

Note
Even though you show this amount on your return, your spouse or common-law partner still may have to file a return for 2006.

Your spouse or common-law partner's Universal Child Care Benefit

This is the amount on line 117 of your spouse or common-law partner's return, or the amount that it would be if he or she filed a return. Although this amount is included in your spouse or common-law partner's net world income, we will subtract this amount in the calculation of certain credits and benefits.

Goods and services tax/harmonized sales tax (GST/HST) credit application

Deemed residents of Canada only - To receive this credit, you have to apply for it, even if you received it last year. Complete the application area on page 1 of your return for 2006. Your credit is based on your net world income added to the net world income of your spouse or common-law partner, if you have one, minus any amount you or your spouse or common-law partner reported for the Universal Child Care Benefit (on line 117), as well as the number of children you have. Net world income is the amount on line 236 of a person's return, or the amount that it would be if the person filed a return.

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 world income, even if it is zero). Otherwise, your application may be delayed. Either you or your spouse or common-law partner can receive the credit, but not both. No matter which one of you applies, the credit will be the same.

If you apply for this credit, we will let you know in July 2007 how much you will receive, if any, and how we calculated it. Generally, we will make payments in July and October 2007, and in January and April 2008.

Note
We may apply your credit against certain amounts you owe the Government of Canada or a province or territory. We list these amounts under line 484.

Are you eligible for the GST/HST credit?

You are eligible for this credit if, at the beginning of the month in which we make a payment, you are deemed resident of Canada and at least one of the following applies. You:

• are 19 years of age or older;
• have (or previously had) a spouse or common-law partner; or
• are (or previously were) a parent and live (or previously lived) with your child.

Note
If you will turn 19 before April 1, 2008, you can apply for this credit on your return for 2006. That way, you can receive it starting with the first payment after the month of your 19th birthday.

You are not eligible for this credit if, at the beginning of the month in which we make a payment, you:

• are a non-resident of Canada;
• are confined to a prison or a similar institution for a period of 90 days or more; or
• do not have to pay tax in Canada because you are an officer or servant of another country, such as a diplomat, or a family member or employee of such a person.

Note
You cannot receive the credit for your spouse or common-law partner or your child who, at the beginning of the month in which we make a payment, meets any of the conditions above.

Receiving the credit for your children

We will base the GST/HST credit you receive for your children on Canada Child Tax Benefit (CCTB) information. If your children are not registered for the CCTB, call 1-800-387-1193 for more information. If you chose not to receive the CCTB, or you do not yet qualify, you still may be able to receive the GST/HST credit for your children. For details, call 1-800-959-1953.

Do you need to contact us?

Once you have applied for this credit, you have to advise us immediately of any of the following changes (as well as the date it happened or will happen):

• you move (if we do not have your new address, your payments may stop, whether you receive them by direct deposit or by cheque);
• your marital status changes (if you separate due to a breakdown in your relationship, wait until you are separated for at least 90 days before submitting Form RC65, Marital Status Change);
• you have a child or a child starts to live with you;
• a child for whom you were receiving the credit is no longer in your care, stops living with you, becomes a spouse or common-law partner or a parent, or dies;
• you receive your payments by direct deposit and your banking information changes;
• you or your spouse or common-law partner become a resident of Canada; or
• you or your spouse or common-law partner is no longer resident in Canada.

For more information, get Pamphlet RC4210, GST/HST Credit, or call 1-800-959-1953. If you are outside Canada, call the International Tax Services Office.

Information about your residency status

Complete this area on page 1 of your return. Check the box that best describes your residency status as of December 31, 2006. For more information on residency status, see "Determining your residency status".

Previous page | Table of contents | Next page