On this page…

• Line 222 - Deduction for CPP or QPP contributions on self-employment and other earnings
• Making additional CPP contributions
• How to calculate your contributions
• Line 224 - Exploration and development expenses
• How to claim
• Line 229 - Other employment expenses
• Line 231 - Clergy residence deduction
• Line 232 - Other deductions Income amounts paid back
• Legal fees
• Other deductible amounts
• Line 235 - Social benefits repayment
• Employment Insurance (EI) benefits
• Old Age Security (OAS) benefits
• Line 236 - Net income

Line 222 - Deduction for CPP or QPP contributions on self-employment and other earnings

You can claim, on this line, halfof the total of your Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) contributions, if any, from Schedule 8. You also can claim, on line 310 on Schedule 1, an amount for the other half. You can claim contributions you:

• have to make on self-employment and limited or non-active partnership income;
• choose to make on certain employment income (see "Making additional CPP contributions"); and
• choose to make on your provincial income tax return for Quebec on certain employment income (see your Quebec provincial guide).

The amount of CPP or QPP contributions that you have to make, or choose to make, will depend on how much you have already contributed to the CPP or QPP as an employee, as shown in boxes 16 and 17 of your T4 slips.

Making additional CPP contributions

You may not have contributed to the CPP for certain income you earned through employment, or you may have contributed less than you were allowed. This can happen if any of the following applies:

• You had more than one employer in 2003.
• You had income, such as tips, from which your employer did not have to withhold contributions.
• You were in a type of employment that was not covered under CPP rules, such as casual employment.

Generally, if the total of your CPP and QPP contributions through employment, as shown in boxes 16 and 17 of your T4 slips, is less than $1,801.80, you can contribute 9.9% on any part of the income on which you have not already made contributions. The maximum income for 2003 for which you can contribute to the CPP is $39,900. Making additional contributions may increase the pension you receive later.

To make additional CPP contributions for 2003, complete Form CPT20, Election to Pay Canada Pension Plan Contributions , and attach a copy to your return, or send it to us separately on or before June 15, 2005. This form lists the eligible employment income on which you can make additional CPP contributions.

How to calculate your contributions

Complete Schedule 8 to calculate your CPP or QPP contributions, and attach it to your return. If you were a member of a partnership, make sure you include on line 1 of Schedule 8 only your share of the net profit or loss. You cannot use self-employment or partnership losses to reduce the CPP or QPP contributions that you paid on your employment earnings.

If you do not have to file a return for the Province of Quebec, enter on lines 222 and 310, in dollars and cents, the amount from line 11 of Schedule 8. Enter on line 421 the amount from line 10 of Schedule 8.

If you do have to file a return for the Province of Quebec, enter on lines 222 and 310, in dollars and cents, the amount from line 10 of Schedule 8. Line 421 does not apply to you.

Note
We will prorate your CPP or QPP contribution and show the correct amount on your Notice of Assessment in certain situations, such as if, in 2003, you:

• were a CPP participant and either turned 18 or 70, or received a CPP retirement or disability pension; or
• were a QPP participant and either turned 18 or received a QPP disability pension.

Line 224 - Exploration and development expenses

If you invested in a petroleum, natural gas, or mining venture in 2003, but did not participate actively, you can deduct your expenses on this line. If you participated actively, follow the instructions at line 135.

How to claim

Complete Form T1229, Statement of Exploration and Development Expenses and Depletion Allowance , using the information that the principals of the venture give you, such as T5, T101, or T5013 slips. Make sure you read the instructions on the back of these slips.

Claim your exploration and development expenses (including renounced resource expenses) and your resource allowances on line 224. Claim your depletion allowances on line 232.

Attach Form T1229 and your T5, T101, and T5013 slips to your return. If you do not have these slips, attach a statement that identifies you as a participant in the venture. The statement has to show your allocation (the number of units you own, the percentage assigned to you, or the ratio of your units to those of the whole partnership) and give the name and address of the fund.

For more information, 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.

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

Line 229 - Other employment expenses

You can deduct certain expenses (including any GST/HST) you paid to earn employment income. You can claim the expenses only if your employment contract required you to pay them, and either you did not receive an allowance for the expenses, or the allowance you received is included in your income.

Note
Most employees cannot claim employment expenses. You cannot deduct the cost of travel to and from work, or other expenses such as most tools and clothing.

Attach to your return a completed Form T777, Statement of Employment Expenses , to give us details of your expenses and to calculate how much you can deduct. Guide T4044, Employment Expenses , contains Form T777 and other forms you may need. The guide also explains the limits and conditions that apply when you claim these expenses.

Repayment of salary or wages - You can deduct salary or wages you included in income for 2003 or a previous year, if you repaid them in 2003. This includes amounts you repaid for a period when you were entitled to receive wage-loss replacement benefits or workers' compensation benefits. However, you cannot deduct more than the income you received when you did not perform the duties of your employment.

Legal fees - You can deduct legal fees you paid to collect or establish a right to salary or wages. However, you have to reduce your claim by any award or reimbursement you received for your legal expenses.

Under proposed changes, you can only deduct these fees if the salary or wages are taxable.

Receipts - If you are filing a return, include Form T777, but not your receipts or other forms. Keep them in case we ask to see them.

Line 231 - Clergy residence deduction

If you are a cleric, use this line to claim a deduction for your residence. Your employer has to certify that you qualify for this deduction. Complete Form T1223, Clergy Residence Deduction , to find out what you can deduct.

Receipts - If you are filing a return, do not include Form T1223, but keep it in case we ask to see it.

Line 232 - Other deductions

Use this line to claim allowable amounts not deducted anywhere else on this return. In the space to the left of line 232, specify the deduction you are claiming. If you have more than one amount, or you want to explain your deduction more fully, attach a note to your return.

Receipts - If you are filing a return, keep all supporting documents for amounts you claim on this line in case we ask to see them.

Note
A child who was born in 1986 or later can claim a deduction for certain income he or she reports. For more details, see "Split income of a child under 18".

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

Income amounts paid back

In 2003, you may have paid back amounts that you received and included in income for 2003 or a previous year. If this applies to you, you can deduct most of these amounts on line 232 of your return for 2003. However, if you repaid, under a court order, support payments that you included on line 128, deduct the repayment on line 220.

Attach to your return receipts or other documents showing the amounts you paid back, such as a T4A (OAS) slip that shows in box 20 any Old Age Security benefits you repaid.

Notes
Deemed residents - If you had an OAS repayment for 2002, tax may have been withheld from your OAS benefits for 2003. The amount deducted is included in box 22 of your T4A(OAS) slip for 2003. Do not deduct it on line 232. Claim it on line 437. To make sure the correct amount has been withheld, see line 235 and complete the chart for line 235 on the Federal Worksheet you will find in the centre of this guide.

If you paid back employment income, see "Repayment of salary or wages" under line 229. If you paid back income tax refund interest, see "Refund interest" under line 221.

EI benefits - You may have received more benefits than you should have, and already paid them back to Human Resources Development Canada (HRDC). For example:

• HRDC may have reduced your EI benefits after discovering the mistake. In this case, your T4E slip will show only the net amount you received, so you cannot claim a deduction.
• You may have repaid HRDC. If so, box 30 of your T4E slip will show the amount you paid back. Include this amount on line 232. This is not the same as repaying a social benefit as explained at line 235.

Legal fees

You can deduct your expenses in any of the following situations:

• You paid fees (including any related accounting fees) for advice or assistance in responding to us when we reviewed your income, deductions, or credits for a year, or in objecting to or appealing an assessment or decision under the Income Tax Act, the Unemployment Insurance Act, the Employment Insurance Act, the Canada Pension Plan, or the Quebec Pension Plan.
• You paid fees to collect (or establish a right to) a retiring allowance or pension benefit. However, you can only claim up to the amount of retiring allowance or pension income you received in the year, minus any part of these amounts transferred to a registered retirement savings plan or registered pension plan. You can carry forward, for up to seven years, legal fees that you cannot claim in the year.
• You incurred certain fees relating to support payments that your current or former spouse or common-law partner, or the natural parent of your child, will have to pay. For more information, get pamphlet P102, Support Payments .

You have to reduce your claim by any award or reimbursements you received for these expenses. If you are awarded the cost of your deductible legal fees in a future year, you will have to include that amount in your income for that year.

For details of other legal fees you may be able to deduct, get Interpretation Bulletin IT-99, Legal and Accounting Fees .

Other deductible amounts

Here are some examples of other amounts that can be deducted on this line:

• depletion allowances (attach to your return a completed Form T1229, Statement of Exploration and Development Expenses and Depletion Allowance );
• certain unused RRSP contributions you made after 1990 that were refunded to you or your spouse or common-law partner in 2003 (attach to your return an approved Form T3012A, Tax Deduction Waiver on the Refund of Your Unused RRSP Contributions , or Form T746, Calculating Your Deduction for Refund of Unused RRSP Contributions );
• the excess part of a direct transfer of a lump-sum payment from your RPP to an RRSP or registered retirement income fund (RRIF) that you withdrew and are including on line 129 or 130 of your return for 2003 (you can use Form T1043, Deduction for Excess Registered Pension Plan Transfers You Withdrew From an RRSP or RRIF , to calculate the deductible amount); and
• capital cost allowance on a Canadian certified feature film or production. You have to file with your return information slip T1-CP, Statement of Certified Productions , which the producer issues. Otherwise, we may disallow your claim. Use the back of the T1-CP slip to calculate your allowable claim. If you are a limited partner of a partnership, make your claim on line 122.

Line 235 - Social benefits repayment

Employment Insurance (EI) benefits

You have to repay part of the EI benefits (line 119) you received in 2003 if there is an amount in box 15 of your T4E slip, the rate in box 7 is 30%, and your net income before adjustments (line 234) is more than $48,750.

Complete the chart on your T4E slip to calculate how much of your EI benefits you have to repay.

Deemed residents - If you also have to repay Old Age Security (OAS) benefits you received (see below), enter the EI benefits that you have to repay on lines 7 and 13 of the chart for line 235 on the Federal Worksheet in the centre of this guide.

Old Age Security (OAS) benefits

Deemed residents - You may have to repay all or a part of your OAS pension (line 113) or net federal supplements (line 146) if your net income before adjustments (line 234) is more than $57,879. Complete the chart for line 235 on the Federal Worksheet in the centre of this guide to calculate how much you have to repay, even if tax was withheld by Human Resources Development Canada.

Non-residents and non-residents electing under section 217 - If you received OAS pension or net federal supplements in 2003 and you are required to file an Old Age Security Return of Income, do not complete the chart for line 235 on the Federal Worksheet. Instead, enter on this line the amount of recovery tax from line 235 of your Old Age Security Return of Income.

Notes
Deemed residents - If you had an OAS repayment for 2002, tax may have been withheld from your monthly OAS pension for 2003. The amount deducted is included in box 22 of your T4A(OAS) slip for 2003. Claim it on line 437. Similarly, if you have an OAS repayment for 2003, tax may be withheld starting with your July 2004 OAS payment. For more details, contact us.

Non-residents and non-residents electing under section 217 - Do not claim on line 437 of this return any recovery tax deducted from your OAS benefits. Instead, you should claim it on line 437 of your Old Age Security Return of Income. For more details, contact us.

Line 236 - Net income

We use this information to calculate amounts such as the Canada Child Tax Benefit, the GST/HST credit, the social benefits repayment, and certain non-refundable tax credits.

Notes
Make sure you enter, if it applies, your spouse or common-law partner's net income in the "Information about your spouse or common-law partner" area on page 1 of your return. Enter this amount even if it is zero.

If the amount you calculate for line 236 is negative, you may have a non-capital loss. To find out, use Form T1A, Request for Loss Carryback . If you have a loss for 2003, you may want to carry it back to your 2000, 2001, or 2002 return. To do this, attach a completed Form T1A to your 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.

Non-residents and non-residents electing under section 217 - Contact us for the special rules regarding loss carrybacks that apply to you.

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