On this page…

• Amounts that are not taxed
• Retroactive lump-sum payments
• Loans and transfers of property
• Split income of a child under 18
  • How to report
  • Tax shelters
• Line 101 - Employment income
  • Emergency volunteers
  • Security option benefits
  • Commissions (box 42)
• Line 104 - Other employment income
• Line 113 - Old Age Security pension
• Line 114 - CPP or QPP benefits
  • CPP or QPP disability benefit (box 16)
  • CPP or QPP child benefit (box 17)
  • CPP or QPP death benefit (box 18)
• Line 115 - Other pensions or superannuation
  • Annuity and registered retirement income fund (including life income fund) payments
  • Pensions from a foreign country
• Line 119 - Employment Insurance and other benefits
• Line 120 - Taxable amount of dividends from taxable Canadian corporations
  • How to report
• Line 121 - Interest and other investment income
  • How to report
  • Bank accounts
  • Term deposits, guaranteed investment certificates (GICs), and other similar investments
  • Canada Savings Bonds (CSBs)
  • Treasury bills (T-bills)
  • Earnings on life insurance policies
• Line 122 - Net partnership income: limited or non-active partners only
  • How to report
  • Canadian certified feature films and productions

If you were a deemed resident of Canada in 2004, you have to include in income most amounts you received in 2004.

Amounts that are not taxed

Whether you were a deemed resident, a non-resident, or a non-resident electing under section 217, you do not have to include certain amounts in your income, including the following:

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

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

Retroactive lump-sum payments

If you received a lump-sum payment of eligible income in 2004, parts of which were for previous years after 1977, you have to include the whole payment on the appropriate line of your return for 2004.

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

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

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

Loans and transfers of property

If you were a deemed resident of Canada in 2004, you may have to report income, such as dividends (see line 120) or interest (see line 121) from property (including money and any replacement property) you loaned or transferred to your spouse or common-law partner, child, or other relative. You also may have to report capital gains (see line 127) or losses from property you loaned or transferred to your spouse or common-law partner.

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

Split income of a child under 18

Certain income of a child who was born in 1987 or later is treated differently. This income is not subject to the rules discussed under "Loans and transfers of property" in the previous section. It is subject to a special tax, but also qualifies for a deduction. This applies to the following amounts received either directly or through a trust (other than a mutual fund trust) or partnership:

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

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

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

The special tax and deduction do not apply if:

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

How to report

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

Tax shelters

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

Line 101 - Employment income

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

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

Non-residents electing under section 217 - If you are a former resident of Canada, you must report employment income from a Canadian resident for services performed outside Canada if, under a tax treaty or another agreement or convention, the income is exempt from tax in your new country of residence. For more information, contact the International Tax Services Office.

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

If you were a deemed resident of Canada in 2004 and you have employment income from another country, report it on line 104 of your return.

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

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

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

Emergency volunteers

In 2004, you may have received a payment from a government, municipality, or other public authority for your work as a volunteer ambulance technician, firefighter, or search, rescue, or other emergency worker. If so, the T4 slip issued by such an authority generally will show only the taxable part of the payment, which is the part that is more than $1,000. However, if that authority employed you (other than as a volunteer) for the same or similar duties, the whole payment will be taxable.

Security option benefits

You may have to report taxable benefits you received in (or carried forward to) 2004 on certain security options you exercised. If you report any taxable benefits, see line 249 for details. However, you may be able to choose to defer reporting these benefits if you have not yet disposed of those securities.

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

Commissions (box 42)

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

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

Line 104 - Other employment income

Report on this line the total of the following amounts:

• Employment income not reported on a T4 slip - Include amounts such as tips and occasional earnings.
• Net research grants - Subtract your expenses from the grant you received and include the net amount on this line. Your expenses cannot be more than your grant. Attach to your return a list of your expenses. For details, get Interpretation Bulletin IT-75, Scholarships, Fellowships, Bursaries, Prizes, Research Grants and Financial Assistance .
• Cleric's housing allowance - Include the amount shown on your T4 slip. You may be entitled to claim a deduction on line 231.
• Foreign employment income - If you were a deemed resident of Canada in 2004 and you had foreign employment income, report your earnings in Canadian dollars (see "How do you report foreign income and other amounts?"). The amount on your United States W-2 slip may have been reduced by such contributions to a "401(k), 457 or 403(b) plan, US Medicare and Federal Insurance Contributions Act (FICA)." These contributions are not deductible on your Canadian return. Therefore, you have to add these amounts into your income as well.
• Income-maintenance insurance plans (wage-loss replacement plans) - Box 28 of your T4A slip includes the payments you received from such a plan. There also should be a note on the slip identifying the amount. You may not have to report the full amount on your return. Report the amount you received, minus contributions you made to the plan after 1967, if you did not use them on a previous year's return to calculate the amount to report. For more information, get Interpretation Bulletin IT-428, Wage loss replacement plans .
• Certain GST/HST and QST (Quebec sales tax) rebates - If you are an employee who paid and deducted employment expenses in 2003 or earlier, you may have received a GST/HST or QST rebate in 2004 for those expenses. If so, include on line 104 the rebate you received. However, a rebate for a vehicle or musical instrument you bought, for which you can claim capital cost allowance, is treated differently. Guide T4044, Employment Expenses , contains instructions on how to report such rebates and information about capital cost allowance.
• Royalties - Include these amounts on this line if you received them for a work or invention of yours. Report other royalties (other than those included at line 135) on line 121.
• Amounts you received under a supplementary unemployment benefit plan (a guaranteed annual wage plan).
• Taxable benefit for premiums paid to cover you under a group term life-insurance plan - Include the amount in box 28 of your T4A slip.
• Employee profit-sharing plan - Include the amount in box 35 of your T4PS slip.

Line 113 - Old Age Security pension

Enter the amount in box 18 of your T4A(OAS) slip. For details on how to report the amount in box 21, see line 146. If you do not have your T4A(OAS) slip, contact the nearest Human Resources Centre of Canada office.

Non-residents electing under section 217 - Your Old Age Security benefits may be shown in box 16 of your NR4-OAS slip.

Notes
If your net income before adjustments (line 234) is more than $59,790, see line 235 for information about repaying OAS benefits.

If, at any time in 2004, you were a non-resident of Canada receiving OAS pension, you also may have to complete Form T1136, Old Age Security Return of Income. For more details, and to get this form and the related guide, visit our Web site at www.cra.gc.ca/forms or contact the International Tax Services Office.

Line 114 - CPP or QPP benefits

Enter the total Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) benefits shown in box 20 of your T4A(P) slip. This amount is the total of the amounts in boxes 14 to 18. If your T4A(P) slip has an amount in box 16, 17, or 18, read whichever of the following sections apply to you.

Non-residents electing under section 217 - Your CPP or QPP benefits may be shown in box 16 or 26 of your NR4 slip if the income code in box 14 or 24 of the NR4 slip contains one of these income codes: 46, 47, 48, 49, 50, or 51.

Lump-sum benefits - If you received a lump-sum CPP or QPP payment in 2004, parts of which were for previous years, you have to include the whole payment on line 114 of your return for 2004. We will not reassess the returns for the previous years to include this income. However, if you were a deemed resident for 2004, the total of the parts that relate to previous years is $300 or more, we will tax those parts as if you received them in those years if the result is better for you. Attach to your return the letter you received from Social Development Canada and we will tell you the results on your Notice of Assessment or Notice of Reassessment.

CPP or QPP disability benefit (box 16)

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

CPP or QPP child benefit (box 17)

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

CPP or QPP death benefit (box 18)

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

Line 115 - Other pensions or superannuation

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

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

Non-residents electing under section 217 - Your other pensions or superannuation may be shown in box 16 or 26 on your NR4 slip. Make sure the income code located in box 14 or 24 corresponds with the type of income reported. You will find a description of the income codes on the back of the NR4 slip.

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

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

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

• If you were 65 or older on December 31, 2004, include it on line 115.
• Regardless of your age, if you received it because your spouse or common-law partner died, include it on line 115.
• Otherwise, report on line 130 the amount in box 24 of your T4A slip, or box 16 or 20 of your T4RIF slip. Report on line 121 the amount in box 19 of your T5 slip.

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

Pensions from a foreign country

If you were a deemed resident in 2004, report in Canadian dollars the gross amount of your foreign pension income for 2004. See "How do you report foreign income and other amounts?". Attach a note to your return, identifying the type of pension you received and the country it came from. In some cases, amounts you receive may not be considered pension income, and you may have to report them elsewhere on your return.

United States individual retirement account (IRA) - If you were a deemed resident in 2004, and you received amounts from an IRA or converted the IRA to a "Roth" IRA, contact us.

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

United States social security - If you were a deemed resident in 2004, include on line 115 the full amount, in Canadian dollars, of your U.S. social security benefits. You can claim a deduction for part of this income. See line 256 for details.

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

Line 119 - Employment Insurance and other benefits

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

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

Non-residents electing under section 217 - Your Employment Insurance benefits may be shown in box 16 or 26 on your NR4 slip. Make sure the income code located in box 14 or 24 agrees with the type of income reported. You will find a description of the income codes on the back of the NR4 slip.

Line 120 - Taxable amount of dividends from taxable Canadian corporations

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

How to report

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

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

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

If a child who was born in 1987 or later is reporting certain dividends, see "Split income of a child under 18."

Line 121 - Interest and other investment income

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

The amounts to report include those shown in boxes 13, 14, and 15 on T5 slips, box 25 on T3 slips, and boxes 26 and 27 on T5013 slips. You also have to report the interest on any tax refund you received in 2004, which is shown on your Notice of Assessment or Notice of Reassessment.

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

If, as a shareholder in a foreign corporation, you received certain shares in another foreign corporation, you may not have to include any amount in income for receiving those shares. For details, contact us.

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

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

If a child who was born in 1987 or later is reporting certain investment income, see "Split income of a child under 18."

How to report

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

Example
Lise and Bob received a T5 slip from their joint bank account showing the $400 interest they earned in 2004. Lise had deposited $4,000 and Bob had deposited $1,000 into the account.

Lise reports $320 interest, calculated as follows:

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

Bob reports $80 interest, calculated as follows:

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

Bank accounts

Report interest paid or credited to you in 2004, even if you did not receive an information slip. You may not receive a T5 slip for amounts under $50.

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

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

The amount of income you report is based on the interest you earned during each complete investment year. For example, if you made a long-term investment on July 1, 2003, report on your return for 2004 the interest that accumulated to the end of June 2004, even if you do not receive a T5 slip. Report the interest from July 2004 to June 2005 on your 2005 return.

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

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

Canada Savings Bonds (CSBs)

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

Treasury bills (T-bills)

If you disposed of a T-bill at maturity in 2004, you have to report as interest the difference between the price you paid and the proceeds of disposition shown on your T5008 slip or account statement.

If you disposed of a T-bill before maturity in 2004, you may also have to report a capital gain or loss. For details, get guide T4037, Capital Gains .

Earnings on life insurance policies

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

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

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

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

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

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

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

If a child who was born in 1987 or later is reporting certain limited or non-active partnership income, see "Split income of a child under 18."

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

How to report

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

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

Canadian certified feature films and productions

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

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