5008-N

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Table of contents

• Step 1 - Saskatchewan tax on taxable income
• Step 2 - Saskatchewan non-refundable tax credits
  • Newcomers to Canada and emigrants
  • Line 5804 - Basic personal amount
  • Line 5808 - Age amount
  • Line 5812 - Spouse or common-law partner amount
  • Line 5816 - Amount for an eligible dependant
  • Line 5820 - Amount for infirm dependants age 18 or older
  • Line 5821 - Amount for dependent children born in 1987 or later
  • Line 5822 - Senior supplementary amount
  • Line 5824 - CPP or QPP contributions through employment
  • Line 5828 - CPP or QPP contributions on self-employment and other earnings
  • Line 5832 - Employment Insurance premiums
  • Line 5836 - Pension income amount
  • Line 5840 - Caregiver amount
  • Line 5844 - Disability amount
  • Line 5848 - Disability amount transferred from a dependant (other than your spouse or
    common-law partner)
  • Line 5852 - Interest paid on your student loans
  • Line 5856 - Your tuition and education amounts
  • Line 5860 - Tuition and education amounts transferred from a child
  • Line 5864 - Amounts transferred from your spouse or common-law partner
  • Line 5868 - Medical expenses
  • Line 5872 - Allowable amount of medical expenses for other dependants
  • Line 5896 - Donations and gifts
• Step 3 - Saskatchewan tax
  • Line 40 - Saskatchewan farm and small business capital gains tax credit
  • Line 42 - Saskatchewan tax on split income
  • Line 50 - Saskatchewan additional tax for minimum tax purposes
  • Line 52 - Provincial foreign tax credit
  • Line 54 - Royalty tax rebate
  • Lines 56 and 57 - Political contribution tax credit
  • Lines 59 to 61 - Labour-sponsored venture capital tax credit
  • Lines 63 to 65 - Saskatchewan post-secondary graduate tax credit
  • Line 67 to 69 - Saskatchewan mineral exploration tax credit

The information in this book will help you complete Form SK428, Saskatchewan Income Tax and Credits.

The terms spouse and common-law partner are defined in the General Income Tax and Benefit Guide.

The term end of the year means December 31, 2005, the date you left Canada if you emigrated in 2005, or the date of death for a person who died in 2005.

Tax Tip
A number of Saskatchewan tax measures are distinct from corresponding federal measures. However, many rules for calculating Saskatchewan tax are still based on the federal Income Tax Act. As a result, you may find it easier to calculate your federal tax first. Your total taxes payable will be the same, no matter which tax you calculate first.

Form SK428, Saskatchewan Income Tax and Credits

Complete Form SK428 if you were a resident of Saskatchewan at the end of the year.

If you had income from a business with a permanent establishment outside Saskatchewan, complete Form T2203, Provincial and Territorial Taxes for 2005 - Multiple Jurisdictions, instead of completing Form SK428.

You also have to complete Form SK428 if you were a non-resident of Canada in 2005 and you earned income from employment in Saskatchewan or received income from a business with a permanent establishment only in Saskatchewan.

Step 1 - Saskatchewan tax on taxable income

Enter on line 1 your taxable income from line 260 of your return. Use this amount to determine which one of the three columns you have to complete. Enter this amount on line 2 of the applicable column and complete the calculation.

Step 2 - Saskatchewan non-refundable tax credits

The eligibility criteria and rules for claiming most of the Saskatchewan non-refundable tax credits are the same as for the federal non-refundable tax credits. However, the value and calculation of some Saskatchewan non-refundable tax credits are different from the corresponding federal credits.

To calculate some of the provincial non-refundable tax credits, you will need to use the Provincial Worksheet.

Newcomers to Canada and emigrants

If you prorated any of the amounts you claimed on lines 300 to 306, 315, 316, 318, 324, and 326 of your federal Schedule 1, you have to prorate the corresponding provincial amounts at lines 5804 to 5820, 5840, 5844, 5848, 5860, and 5864. Also, you may have to prorate the amounts on lines 5821 and 5822.

Line 5804 - Basic personal amount

Claim the basic personal amount of $8,404.

Line 5808 - Age amount

You can claim this amount if you met the rules for claiming the corresponding federal amount on line 301 of your federal Schedule 1. Enter on line 5808 the same amount that you entered on line 301.

Note
You may be able to transfer all or part of your age amount to your spouse or common-law partner. Similarly, you may be able to claim all or part of his or her age amount. See line 5864 for details.

Line 5812 - Spouse or common-law partner amount

You can claim this amount if the rules are met for claiming the amount on line 303 of federal Schedule 1. You still may be able to claim the provincial amount if your spouse or common-law partner's net income (line 236 of his or her return, or the amount that it would be if he or she filed a return) is less than $9,244.

If your spouse or common-law partner's net income is:

• $840 or less, enter $8,404 on line 5812; or
• more than $840 but less than $9,244, complete the calculation on Form SK428 to determine your claim, and enter the result on line 5812.

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

Line 5816 - Amount for an eligible dependant

You can claim this amount if the rules are met for claiming the amount on line 305 of federal Schedule 1. You still may be able to claim the provincial amount if your dependant's net income (line 236 of his or her return, or the amount that it would be if he or she filed a return) is less than $9,244.

If your dependant's net income is:

• $840 or less, enter $8,404 on line 5816; or
• more than $840 but less than $9,244, complete the calculation for line 5816 on the Provincial Worksheet to determine your claim.

If you have not already completed federal Schedule 5, complete and attach it to your return.

Line 5820 - Amount for infirm dependants age 18 or older

You can claim this amount if the rules are met for claiming the amount on line 306 of federal Schedule 1.

Complete the calculation for line 5820 on the Provincial Worksheet to determine your claim.

Line 5821 - Amount for dependent children born in 1987 or later

You can claim this amount if you lived in Saskatchewan at the end of the year and you had a dependent child for whom all of the following conditions apply:

• the child was less than 18 years of age at any time in 2005;
• the child lived with you at the end of the year (or on the date of death for a child who died in 2005); and
• a special allowance under the Children's Special Allowances Act was not received by anyone for that child.

You cannot claim this credit if anyone made a claim for the child as an eligible dependant on line 5816 or as a spouse or common-law partner on line 5812.

If you have a spouse or common-law partner, only one of you can claim this credit. Where both are eligible to make this claim, the person with the lower taxable income must make the initial claim. The other person may claim any unused amount by completing Schedule SK(S2), Provincial Amounts Transferred From Your Spouse or Common-law Partner, and filing it with his or her return.

Enter beside box 6370 the number of dependent children you have. Claim $2,626 on line 5821 for each dependent child. Please give details of your dependent children in the chart on Form SK428.

Line 5822 - Senior supplementary amount

You can claim this amount if you were 65 or older in 2005 and you lived in Saskatchewan at the end of the year. You can claim it regardless of your net income.

Claim $1,051 on line 5822.

If you are completing a return for a person who died in 2005, you can claim this amount if the person was 65 before the date of death and he or she lived in Saskatchewan on the date of death.

Note
You may be able to transfer all or part of your senior supplementary amount to your spouse or common-law partner. Similarly, you may be able to claim all or part of his or her senior supplementary amount. See line 5864 for details.

Line 5824 - CPP or QPP contributions through employment

Enter on this line the same amount that you claimed on line 308 of your federal Schedule 1.

Line 5828 - CPP or QPP contributions on self-employment and other earnings

Enter on this line the same amount that you claimed on line 310 of your federal Schedule 1.

Line 5832 - Employment Insurance premiums

Enter on this line the same amount that you claimed on line 312 of your federal Schedule 1.

Line 5836 - Pension income amount

You can claim this amount if you met the rules for claiming the corresponding federal amount on line 314 of your federal Schedule 1. Enter on line 5836 the same amount that you entered on line 314.

Note
Only residents of Saskatchewan are eligible for this amount. If you are not a resident of Saskatchewan, you cannot claim this tax credit in calculating your Saskatchewan tax even though you may have received income from a source inside Saskatchewan in 2005.

Line 5840 - Caregiver amount

You can claim this amount if the rules are met for claiming the amount on line 315 of federal Schedule 1.

Complete the calculation for line 5840 on the Provincial Worksheet to determine your claim.

Line 5844 - Disability amount

You can claim this amount if you met the rules for claiming the corresponding federal amount on line 316 of federal Schedule 1.

• If you were 18 or over at the end of the year, enter $6,596 on line 5844.
• If you were under 18 at the end of the year, you may be eligible to claim a supplement up to a maximum of $3,848 in addition to the disability amount of $6,596. Complete the calculation for line 5844 on the Provincial Worksheet to determine your claim.

Line 5848 - Disability amount transferred from a dependant (other than your spouse or common-law partner)

You can claim this amount if the rules are met for claiming the amount on line 318 of federal Schedule 1. Complete the calculation for line 5848 on the Provincial Worksheet to determine your claim.

Line 5852 - Interest paid on your student loans

Enter on this line the same amount that you claimed on line 319 of your federal Schedule 1.

Line 5856 - Your tuition and education amounts

The tuition and education amounts that you claimed on line 323 of your federal Schedule 1 may be different from the provincial amounts you calculate.

Complete Schedule SK(S11), Provincial Tuition and Education Amounts, to calculate your claim.

Receipts - If you are filing a paper return, attach the completed Schedule SK(S11). Whether you are filing a paper return or electronically, keep your forms and official tuition fees receipts in case we ask to see them.

Transferring and carrying forward amounts

You may not need all of your 2005 tuition and education amounts to reduce your provincial income tax to zero. In this case, you may transfer all or part of the unused portion to one person, either your spouse or common-law partner (who would claim it on line 5864), your parent or grandparent, or your spouse or common-law partner's parent or grandparent (who would claim it on line 5860).

You can only transfer an amount to your parent or grandparent, or your spouse or common-law partner's parent or grandparent, if your spouse or common-law partner does not claim an amount for you on line 5812 or 5864.

Complete the "Transfer/Carry forward of unused amount" section of Schedule SK(S11) to calculate the provincial amount available to transfer, as well as Form T2202, Education Amount Certificate, T2202A, Tuition and Education Amounts Certificate, TL11A, Tuition and Education Amounts Certificate - University Outside Canada, or TL11C, Tuition and Education Amounts Certificate - Commuter to the United States, to designate who can claim it and the amount the person can claim. This amount may be different from the amount calculated for the same person on your federal Schedule 11. You must enter the provincial amount you are transferring on line 20 of your Schedule SK(S11).

Tax Tip
If you are transferring an amount to a designated person, do not transfer more than the person can use. That way, you can carry forward as much as possible to use in a future year.

Complete the "Transfer/Carry forward of unused amount" section of Schedule SK(S11) to calculate the amount you can carry forward to a future year. This amount corresponds to the part of your tuition and education amounts you do not need to use (and do not transfer) for the year.

Line 5860 - Tuition and education amounts transferred from a child

You can claim this amount if the rules are met for claiming the amount on line 324 of your federal Schedule 1.

Enter on line 5860 the total of all provincial amounts transferred to you that each student designated on his or her Form T2202, T2202A, TL11A, or TL11C.

Notes
The student must have entered this amount on line 20 of his or her Schedule SK(S11). He or she may have chosen to transfer an amount that is less than the available provincial amount. The student cannot transfer to you any unused tuition and education amounts carried forward from a previous year.

If the student was a resident of another province or territory on December 31, 2005, special rules may apply. Call us to determine the amount you can claim on line 5860.

Other rules may apply if the student has a spouse or a common-law partner. See line 324 in the General Income Tax and Benefit Guide.

Receipts - If you are filing a paper return, do not include the student's Schedule SK(S11) , forms, or official tuition fees receipts. Whether you are filing a paper return or electronically, keep all of your documents in case we ask to see them.

Line 5864 - Amounts transferred from your spouse or common-law partner

You can claim these amounts if the rules are met for claiming the amount on line 326 of your federal Schedule 1.

As a resident of Saskatchewan, you can also transfer the amount for dependant children born in 1987 or later, and the Senior supplementary amount.

Complete Schedule SK(S2), Provincial Amounts Transferred From Your Spouse or Common-law Partner, to calculate your claim. Attach this schedule to your return.

Line 5868 - Medical expenses

The medical expenses you can claim on line 5868 are the same as those you can claim on line 330 of your federal Schedule 1. They have to cover the same 12-month period ending in 2005, but must not have been claimed on a 2004 return.

Line 5872 - Allowable amount of medical expenses for other dependants

In addition to the medical expenses claimed on line 5868, you can also claim medical expenses for other dependants.

The medical expenses you use to calculate your claim on line 5872 are the same as those used to calculate your federal claim on line 331 of federal Schedule 1. They have to cover the same 12-month period ending in 2005 and must not have been claimed on a 2004 return.

The maximum amount you can claim is $10,000 for each dependant.

Complete the calculation for line 5872 on the Provincial Worksheet to determine your claim.

Line 5896 - Donations and gifts

To calculate your claim for line 5896, enter the amounts from lines 345 and 347 of federal Schedule 9 and multiply them by the rates on lines 35 and 36 on Form SK428.

Step 3 - Saskatchewan tax

Line 40 - Saskatchewan farm and small business capital gains tax credit

If, in 2005, you reported capital gains from the disposition of qualified farm property or qualified small business corporation shares, you may qualify for this tax credit.

To claim the credit, get Form T1237, Saskatchewan Farm and Small Business Capital Gains Tax Credit, from the CRA's Web site or by contacting us (see the section called "If you have questions…").

Enter, on line 40 of Form SK428, the tax credit calculated on line 32 of Form T1237.

Receipts - If you are filing a paper return, attach Form T1237. If you are filing electronically, keep all your documents in case we ask to see them.

Line 42 - Saskatchewan tax on split income

If you have to pay federal tax on split income on line 424 of your federal Schedule 1, complete Part 2 of Form T1206, Tax on Split Income, to calculate the provincial tax that applies to this income. Form T1206 also contains a special rule that applies to the amount you enter on line 428 of your return. You can find more information on tax on split income in the General Income Tax and Benefit Guide.

Line 50 - Saskatchewan additional tax for minimum tax purposes

If you have to pay federal minimum tax as calculated on Form T691, Alternative Minimum Tax, you will also have to determine your Saskatchewan additional tax for minimum tax purposes.

To do this, complete the calculation on line 50 of Form SK428. You can find information about minimum tax in the General Income Tax and Benefit Guide.

Line 52 - Provincial foreign tax credit

If your federal foreign tax credit on non-business income is less than the related tax you paid to a foreign country, you may be eligible to claim a provincial foreign tax credit.

To claim the credit, get Form T2036, Provincial or Territorial Foreign Tax Credit, from the CRA's Web site or by contacting us (see the section called "If you have questions…").

Enter, on line 52 of Form SK428, the tax credit amount calculated on line 5 of Form T2036.

Receipts - Attach Form T2036 to your paper return. If you are filing electronically, keep all your documents in case we ask to see them.

Line 54 - Royalty tax rebate

If, in 2005, you had attributed Canadian royalties and taxes as a result of transactions with any of the provinces or territories, you may qualify for the Saskatchewan royalty tax rebate.

To claim the rebate, get Form T82, Saskatchewan Royalty Tax Rebate, from the CRA's Web site or contact us (see the section called "If you have questions…").

Enter, on line 54 of Form SK428, the rebate shown on line 26 of Form T82, Saskatchewan Royalty Tax Rebate.

Receipts - Attach Form T82 to your return.

Lines 56 and 57 - Political contribution tax credit

You can claim this credit if you contributed to a registered Saskatchewan political party or to an independent candidate in a Saskatchewan provincial election. Only claim amounts from your official receipts for 2005. Official receipts can be issued only for contributions of at least $25.

How to claim

Enter the total of your official receipts for Saskatchewan political contributions on line 56 of Form SK428, and determine the amount to enter on line 57 as follows:

• If the total of your official receipts is not more than $1,275, complete the calculation for line 57 on the Provincial Worksheet.
• If the total of your official receipts is more than $1,275, enter $650 on line 57 of Form SK428.

Receipts - Attach to your paper return official receipts signed by an official agent of the political party or independent candidate. If you are filing electronically, keep all your documents in case we ask to see them.

Lines 59 to 61 - Labour-sponsored venture capital tax credit

You can claim this credit if you were a resident of Saskatchewan at the end of the year and you made an eligible investment in a labour-sponsored venture capital corporation that invests in small and medium-size businesses.

You can claim a credit for investments made in 2005 (that you did not claim on your 2004 return) or in the first 60 days of 2006. If an RRSP for a spouse or common-law partner became the first registered holder of the share, either the RRSP contributor or annuitant may claim this credit for that share.

If you invested in a labour-sponsored venture capital corporation that is registered in Saskatchewan, enter the credit shown on Slip T2C (SASK.), Saskatchewan Tax Incentive (issued by the Saskatchewan Department of Industry and Resources), to a maximum of $1,000, on line 59 of Form SK428.

If you invested in a labour-sponsored venture capital corporation that is registered federally, enter the credit shown on Slip T2C (SASK.), Saskatchewan Tax Incentive (issued by the Saskatchewan Department of Industry and Resources), to a maximum of $525, on line 60 of Form SK428.

The maximum labour-sponsored venture capital tax credit you can claim on line 61 of Form SK428 is $1,000.

Receipts - Attach Slip T2C (SASK.) to your paper return. If you are filing electronically, keep it in case we ask to see it.

Lines 63 to 65 - Saskatchewan post-secondary graduate tax credit

You can claim a credit of $675 on line 63 of Form SK428 if you meet all of the following conditions:

• you were a resident of Saskatchewan at the end of the year;
• you are claiming this credit for the first time;
• you completed an eligible program of post-secondary studies and you met the necessary qualifications for graduation; and
• you applied for and obtained a tax credit certificate from the Saskatchewan Department of Learning, certifying your entitlement to and the amount of the credit.

You can carry forward any unused amount of Saskatchewan post-secondary graduate tax credit for four years. Any unused post-secondary graduate tax credit will be shown on your Notice of Assessment or Notice of Reassessment. Enter any unused amount from a previous year on line 64 of Form SK428.

If you did not claim the credit in previous years, and a certificate had been issued for a previous year, you have to request an adjustment to the return the credit relates to. See the section called " How do you change a return?" in the General Income Tax and Benefit Guide.

Receipts - Attach to your paper return the tax credit certificate the Saskatchewan government sent you. If you are filing electronically, keep all your documents in case we ask to see them.

Line 67 to 69 - Saskatchewan mineral exploration tax credit

To encourage mineral exploration, Saskatchewan introduced the mineral exploration tax credit for individuals who purchase shares from a mining exploration corporation after October 17, 2000. The company's exploration expense must be in Saskatchewan.

The credit is 10% of the eligible expenses, and it will be used first to reduce Saskatchewan tax in the year. Any unused amounts can be carried forward for 10 years or carried back for 3 years.

Enter, on line 67 of Form SK428, the total of the credits shown on each Slip SK-METC, Mineral Exploration Tax Credit Certificate for 2005, you received from mining exploration corporations that incurred qualifying expenses in Saskatchewan. If you received a Form T5013, Statement of Partnership Income, with an amount in Box 143, use only the amounts shown on your SK-METC slips to make this claim.

If your 2004 Notice of Assessment or Notice of Reassessment indicates an unused mineral exploration tax credit, enter this amount on line 68 of Form SK428.

Unused mineral exploration tax credit

If you cannot use all of your tax credit and you want to carry back the unused amount to previous years, use the chart for lines 71 to 73 on the Provincial Worksheet to calculate the available amount.

Enter, on line 71 of Form SK428, any part of this amount you want to carry back to reduce your 2004 Saskatchewan tax. Enter on line 72 any amount you want to carry back to 2003 and on line 73 any amount you want to carry back to 2002.

If any unused amount is not carried back to a previous year on lines 71, 72, or 73, it will be shown on your 2005 Notice of Assessment or Notice of Reassessment.

Receipts - If you are filing a paper return, attach a copy of your SK-METC slips. If you are filing electronically, keep all your documents in case we ask to see them.