ARCHIVED - Deductions (Net income and Taxable income)

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ARCHIVED - Deductions (Net income and Taxable income)


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Net income (lines 206 to 236)

Line 206 - Pension adjustment

Enter on line 206 the total of all amounts shown in box 52 of your T4 slips or box 034 of your T4A slips. Generally, this total represents the value of the benefits you earned in 2010 under a registered pension plan (RPP) or a deferred profit-sharing plan (DPSP).

Do not include the pension adjustment (PA) amount in your income, and do not deduct it on your return. Enter the amount on line 206. We will use it to calculate your registered retirement savings plan (RRSP) deduction limit for 2011, which we will show on your latest notice of assessment, notice of reassessment, or T1028, Your RRSP Information for 2010. For more information, see line 208.

If you have any questions about how your PA was calculated, ask your employer.

Notes
 If you live in Canada and participated in a foreign pension plan in 2010, you may have to enter an amount on this line. For more information, contact us.

If you contributed to a foreign employer-sponsored pension plan or to a Social Security Arrangement (other than a United States (U.S.) Arrangement), see Form RC269, Employee Contributions to a Foreign Pension Plan or Social Security Arrangement for 2010 - Non-US Plans or Arrangements.

If you were a U.S. resident working in Canada and contributed to a U.S. employer-sponsored retirement plan, see Form RC267, Employee Contributions to a US Retirement Plan for 2010 - Temporary Assignments.

If you were a commuter from Canada and contributed to a U.S. retirement plan, see Form RC268, Employee Contributions to a US Retirement Plan for 2010 - Cross-border Commuters.

You can get these forms by going to our Forms and publications page, or by contacting us.

Line 207 - Registered pension plan (RPP) deduction

Generally, you can deduct the total of all amounts shown in box 20 of your T4 slips, box 032 of your T4A slips, or on your union or RPP receipts. Contact us or see Guide T4040, RRSPs and Other Registered Plans for Retirement, to find out how much you can deduct if any of the following apply:

  • the total is more than $3,500 and your information slips show a past-service amount for service before 1990;
  • you contributed in a previous year and could not deduct part of the contributions; or
  • you made contributions to a pension plan in a foreign country.

Notes
If you contributed to a foreign employer-sponsored pension plan or to a Social Security Arrangement (other than a United States (U.S.) Arrangement), see Form RC269, Employee Contributions to a Foreign Pension Plan or Social Security Arrangement for 2010 - Non-US Plans or Arrangements.

If you were a U.S. resident working in Canada and contributed to a U.S. employer-sponsored retirement plan, see Form RC267, Employee Contributions to a US Retirement Plan for 2010 - Temporary Assignments.

If you were a commuter from Canada and contributed to a U.S. retirement plan, see Form RC268, Employee Contributions to a US Retirement Plan for 2010 - Cross-border Commuters.

You can get these forms by going to our Forms and publications page, or by contacting us.

Supporting documents - If you are filing electronically, keep all your documents in case we ask to see them at a later date. If you are filing a paper return, attach your T4 and T4A slips, but do not send your other documents. Keep all your documents in case we ask to see them at a later date.

Line 208 - RRSP deduction

This section gives general information on registered retirement savings plans (RRSPs). If you need more information after reading this section, see Guide T4040, RRSPs and Other Registered Plans for Retirement.

To find out if you have to complete Schedule 7, read the information at the top of the schedule. For more information, see Schedule 7. To view your RRSP information, go to our My Account page.

Supporting documents - If you are filing electronically, keep all your documents in case we ask to see them at a later date. If you are filing a paper return, attach your completed Schedule 7 (if applicable). Also send your official receipts for all amounts you contributed from March 2, 2010, to March 1, 2011, including those you are not deducting on your return for 2010 and those you are designating as Home Buyers’ Plan (HBP) or Lifelong Learning Plan (LLP) repayments. For more information about HBP and LLP repayments, see Lines 6 and 7.

If you contributed to your spouse’s or common-law partner's plan, the receipt must show your name as the contributor and your spouse’s or common-law partner’s name as the annuitant.

Maximum contributions you can deduct

The maximum you can deduct on line 208 is whichever of the following amounts is least:

  • the unused RRSP contributions identified as amount (B) of "Your 2010 RRSP Deduction Limit Statement" shown on your latest notice of assessment, notice of reassessment, or T1028, Your RRSP Information for 2010, plus the total of your RRSP contributions made from March 2, 2010, to March 1, 2011 (not including amounts you designate as HBP or LLP repayments, see Lines 6 and 7); or
  • your RRSP deduction limit for 2010 (see Line 10) plus amounts you transfer
    (see Line 11) to your RRSP on or before March 1, 2011.

Notes
After the end of the year you turn 71 years of age, you or your spouse or common-law partner cannot contribute to an RRSP under which you are the annuitant. However, you can still contribute to your spouse's or common-law partner's RRSP until the end of the year he or she turns 71 years of age, and you can deduct those contributions as long as you still have an unused RRSP deduction limit.

If you contribute more to an RRSP than you can deduct, you may have to pay a tax of 1% per month. To pay this tax you must file a T1-OVP, Individual Tax Return for RRSP Excess Contributions, for each applicable tax year. For more information, see the section called "Tax on RRSP excess contributions" in Guide T4040, RRSPs and Other Registered Plans for Retirement.

Schedule 7

You may not have to complete Schedule 7. To find out, read the information at the top of the schedule. If you do have to complete it, you will find information below about lines 1, 2, 3, 6, 7, 10, 11, and 15 to 18.

Line 1 - Unused RRSP contributions

These are amounts you contributed to your own RRSP or to an RRSP for your spouse or common-law partner after 1990 but did not deduct on line 208 of any previous return or designate as an HBP or an LLP repayment. The total of these amounts is identified as amount (B) of "Your 2010 RRSP Deduction Limit Statement" shown on your latest notice of assessment, notice of reassessment, or T1028, Your RRSP Information for 2010, if you showed them on a previous year’s Schedule 7.

If you do not have your notice, you can find out if you have unused RRSP contributions by using RRSP deduction limit, one of our TIPS services.

Notes
 If you have unused RRSP contributions that you made from March 3, 2009, to March 1, 2010, you should have filed a completed Schedule 7 with your 2009 paper return. If you did not, you should submit your receipts and a completed copy of a 2009 Schedule 7 to your tax centre, but do not include them with your return for 2010. For more information, see How do you change a return?

If you have unused contributions that you made from January 1, 1991, to March 2, 2009, but did not show on a Schedule 7 for 2008 or earlier, contact us.


Lines 2 and 3 - Total RRSP contributions

This total includes amounts you:

  • contributed to your own RRSP or an RRSP for your spouse or common-law partner from March 2, 2010, to March 1, 2011;
  • transferred to your own RRSP (see Line 11); and
  • designated as HBP or LLP repayments (see Lines 6 and 7).

Include on these lines all contributions you made from January 1, 2011, to March 1, 2011, even if you are not deducting or designating them on your return for 2010. Otherwise, we may reduce or disallow your claim for these contributions on your return for a future year.

Tax Tip

If you have made deductible RRSP contributions for 2010 (other than transfers) from March 2, 2010, to March 1, 2011, you do not have to claim the full amount on line 208 of your 2010 return. Depending on your federal and provincial or territorial rates of tax for 2010, and your expected rates of tax for future years, it may be more beneficial for you to claim, if applicable, only part of your contributions on line 10 of Schedule 7 and on line 208 of your 2010 return. The contributions you do not claim for 2010 will then be available for you to carry forward and claim for future years when your federal and provincial or territorial rates of tax are higher.

In all cases, you must record the total contributions you made from March 2, 2010, to March 1, 2011, on either line 2 or 3 and line 245 of your 2010 Schedule 7.

Do not include the following amounts:

  • Any unused RRSP contributions you made after March 1, 2010, that were refunded to you or your spouse or common- law partner in 2010. Report the refund on line 129 of your return for 2010. You may be able to claim a deduction on line 232.
  • Part or all of the contributions you made to your RRSP or an RRSP for your spouse or common-law partner less than 90 days before either of you withdrew funds from that RRSP under the HBP or the LLP. For more information, see Guide RC4135, Home Buyers' Plan (HBP) or Guide RC4112, Lifelong Learning Plan (LLP).
  • Any payment directly transferred to your RRSP if you did not receive an information slip for it or if it is shown in box 35 of your T4RSP or T4RIF slips.
  • The part of an RRSP withdrawal that you recontributed to your RRSP and deducted on line 232. This would have happened if, in error, you withdrew more RRSP funds than necessary to obtain past-service benefits under a registered pension plan (RPP).
  • 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 2010 and deducting on line 232.

Lines 6 and 7 - Repayments under the HBP and the LLP

If you withdrew funds from your RRSP under the Home Buyers’ Plan (HBP) before 2009, you have to make a repayment for 2010. If you withdrew funds from your RRSP under the Lifelong Learning Plan (LLP) before 2009, you may have to make a repayment for 2010. In either case, your 2010 minimum required repayment is indicated on your latest notice of assessment, notice of reassessment, or T1028, Your RRSP Information for 2010.

To make a repayment for 2010, contribute to your own RRSP from January 1, 2010, to March 1, 2011, and designate your contribution as a repayment on line 6 or 7 of Schedule 7. Do not include an amount you deducted or designated as a repayment on your 2009 return or that was refunded to you. Do not send your repayment to us. You cannot deduct any RRSP contribution you designate as an HBP or an LLP repayment on Schedule 7.

Note
 If you repay less than the minimum amount for 2010, you have to include the difference on line 129 of your return.

Line 10 - RRSP contributions you are deducting for 2010

Your RRSP deduction limit for 2010 is shown on line A of your latest notice of assessment, notice of reassessment, or T1028, Your RRSP Information for 2010, if we sent you one. You can carry forward indefinitely any part of your RRSP deduction limit accumulated after 1990 that you do not use.

If you do not have your notice or T1028, you can find out your limit for 2010 by using RRSP deduction limit, one of our TIPS services, or by contacting us.

If you would like to calculate your RRSP deduction limit for 2010, get Guide T4040, RRSPs and Other Registered Plans for Retirement.

Note
 In a previous year, you may have received income for which you could contribute to an RRSP, but you may not have filed a return for that year. If you want to keep your RRSP deduction limit up to date, you have to file a return for that year.

Line 11 - Transfers

You may have reported income on line 115, 129, or 130 of your return for 2010. If you contributed certain types of this income to your own RRSP on or before March 1, 2011, you can deduct this contribution, called a transfer, in addition to any RRSP contribution you make based on your "RRSP deduction limit for 2010".

For example, if you received a retiring allowance in 2010, you would report it on line 130 of your return. You can contribute to your RRSP up to the eligible part of that income (box 66 of your T4 slips, box 47 of your T3 slips, or box 026 of your T4A slips) and deduct it as a transfer. Include the amounts you transfer on lines 2 or 3 and 11 of Schedule 7.

For more information about amounts you can transfer, see Guide T4040, RRSPs and Other Registered Plans for Retirement.

Lines 15 to 18 - 2010 withdrawals under the HBP and the LLP

On line 15, enter the total of your HBP withdrawals for 2010 from box 27 of your T4RSP slips. In addition, tick the box at line 16 if the address of the home you acquired with these withdrawals is the same as the address on page 1 of your return.

On line 17, enter the total of your LLP withdrawals for 2010 from box 25 of your T4RSP slips. In addition, tick the box at line 18 to designate that your spouse or common-law partner was the student for whom the funds were withdrawn. If you do not tick the box, you will be considered to be the student for LLP purposes. You can change the person you designate as the student only on the return for the year you make your first withdrawal.

The guides RC4135, Home Buyers' Plan (HBP), and RC4112, Lifelong Learning Plan (LLP), include more information about:

  • when you have to make your repayments; and
  • the rules that apply when the person who made the withdrawal dies, turns 71 years of age, or becomes a non-resident.

Line 209 - Saskatchewan Pension Plan (SPP) deduction

You can deduct contributions to the SPP for 2010, up to whichever of the following three amounts is least:

  • $600;
  • your 2010 RRSP deduction limit minus your RRSP deduction from line 208 (not including transfers to your RRSP); or
  • the total amount you contributed to the SPP for yourself or your spouse or common-law partner from January 1, 2010, to March 1, 2011, not including any contributions that you deducted on your 2009 return.

Supporting documents - If you are filing electronically, keep all your documents in case we ask to see them at a later date. If you are filing a paper return, attach your documents.

Line 210 - Deduction for elected split-pension amount

If you and your spouse or common-law partner have jointly elected to split your eligible pension income by completing Form T1032, Joint Election to Split Pension Income, you (the pensioner) can deduct on this line the elected split-pension amount from line E of Form T1032.

Form T1032 is to be filed by your filing due date for the year (see What date is your return for 2010 due?). This form must be attached to both your and your spouse's or common-law partner's paper returns. The information provided on the forms must be the same. If you are filing electronically, keep your election form in case we ask to see it.

Note
Only one joint election can be made for a tax year. If both you and your spouse or common-law partner have eligible pension income, you will have to decide if you are splitting your pension income or your spouse's or common-law partner's pension income.


Line 212 - Annual union, professional, or like dues

Enter the total of the following amounts related to your employment that you paid (or that were paid for you and included in your income) in the year:

  • annual dues for membership in a trade union or an association of public servants;
  • professions board dues required under provincial or territorial law;
  • professional or malpractice liability insurance premiums or professional membership dues required to keep a professional status recognized by law; and
  • parity or advisory committee (or similar body) dues required under provincial or territorial law.

Annual membership dues do not include initiation fees, licences, special assessments, or charges for anything other than the organization's ordinary operating costs. You cannot claim charges for pension plans as membership dues, even if your receipts show them as dues. For more information, see Interpretation Bulletins IT-103, Dues paid to a union or to a parity or advisory committee, and IT-158, Employees' professional membership dues.

The amount shown in box 44 of your T4 slips, or on your receipts, includes any GST/HST you paid.

Tax Tip
You may be eligible for a rebate of any GST/HST you paid as part of your dues
(see line 457).

Supporting documents - If you are filing electronically, keep all your documents in case we ask to see them at a later date. If you are filing a paper return, attach your T4 slips but do not send your other documents. Keep all your documents in case we ask to see them at a later date.

Line 213 - Universal Child Care Benefit (UCCB) repayment

In 2010, you or your spouse or common-law partner may have repaid an amount that was included in your or your spouse's or common-law partner's income for a previous year.

The person who reported the UCCB income in the previous year may deduct the related repayment amount on line 213. The amount of the UCCB repayment to deduct is shown in box 12 of the RC62 slip.

Line 214 - Child care expenses

You or your spouse or common-law partner may have paid for someone to look after your child so one of you could earn income, go to school, or conduct research in 2010. The expenses are deductible only if, at some time in 2010, the child was under 16 years of age or had a mental or physical impairment. Generally, only the spouse or
common-law partner with the lower net income (even if it is zero) can claim these expenses.

Note
You may have paid an amount that would qualify to be claimed as child care expenses and the children's fitness amount (line 365 of Schedule 1). If this is the case, you must first claim this amount as child care expenses. Any unused part can be claimed for the children's fitness amount as long as the requirements are met.

For more information, and to make your claim, get Form T778, Child Care Expenses Deduction for 2010. If you claimed child care expenses on your 2009 return, the tax package we mailed to you should include this form.

Tax Tips
You may be able to claim payments you made to a boarding school, sports school, or camp. For more information, see Form T778.

If your child needs special attendant care or care in an establishment, see Guide RC4064, Medical and Disability Related Information, for more information about different amounts you may be able to claim.

Supporting documents - If you are filing electronically, keep all your documents in case we ask to see them at a later date. If you are filing a paper return, attach your completed form T778, but do not send your other documents. Keep all your documents in case we ask to see them at a later date.

Line 215 - Disability supports deduction

You can claim expenses you paid for personal attendant care and other disability supports expenses that allowed you to go to school or earn certain income. This includes income from employment or self-employment and a grant you received for conducting research.

Note
Only the person with the impairment can claim expenses for the disability supports deduction.

For a complete list of allowable expenses, see Form T929, Disability Supports Deduction. You cannot claim these expenses on this line if you or someone else will be claiming them as medical expenses on line 330 or 331 of Schedule 1.

To calculate your claim, complete Form T929. For more information, see Form T929, or use Info-Tax, one of our TIPS services.

Supporting documents - If you are filing electronically, or filing a paper return, do not send any documents. Keep all your documents in case we ask to see them at a later date.

Line 217 - Business investment loss

A business investment loss is a special type of capital loss. Such a loss can occur, for example, when you dispose of shares or certain debts of a small business corporation. For more information, and to find out how to complete lines 217 and 228 (to the left of line 217), see Guide T4037, Capital Gains.

If you have a tax shelter, see Tax shelters.

Line 219 - Moving expenses

Generally, you can deduct moving expenses you paid in 2010 if both of the following apply:

  • You moved to work or run a business or to study full-time at an educational institution that offers post-secondary courses.
  • You moved at least 40 kilometres closer to your new work or school.

Notes
 If you moved before 2010 but could not claim all your expenses on your return for that year or later, you may be able to claim the remaining expenses on your return for 2010.

In addition, if you pay expenses after the year of your move, you may be able to claim them on your return for the year you pay them. You may carry forward unused amounts until you have enough income to claim them.

Your deduction is limited to the amount of net eligible income you earned at the new location. Also, you cannot deduct moving expenses against certain non-taxable scholarship, fellowship, bursary, prize, and research grant income. For more information, see Scholarships, fellowships, bursaries, and artists' project grants.

For more information, and to calculate how much you can deduct, get Form T1-M, Moving Expenses Deduction. You can get this form by going to our Forms and publications page or by calling 1-800-959-2221 from 8:15 a.m. to 5:00 p.m. If you move, let us know your new address as soon as possible.

Supporting documents - If you are filing electronically, or filing a paper return, do not send any documents. Keep all your documents in case we ask to see them at a later date.

Line 220 - Support payments made

Enter on line 230 the total of all deductible and non-deductible support payments for a spouse or common-law partner, or for a child, that you made (or, if you are the payee, that you repaid under a court order) in 2010. Claim on line 220 only the deductible amount.

Note
Most child support payments paid according to a written agreement or court order dated after April 1997, are not deductible. For more information, see Guide P102, Support Payments.

To avoid your claim being delayed or disallowed, you should register your written agreement or court order (including any amendments) with us by completing and sending us Form T1158, Registration of Family Support Payments.

Supporting documents - If you are filing electronically, or filing a paper return, do not send any documents. Keep all your documents in case we ask to see them at a later date.

Line 221 - Carrying charges and interest expenses

You can claim the following carrying charges and interest you paid to earn income from investments:

  • fees to manage or take care of your investments (other than administration fees you paid for your registered retirement savings plan or registered retirement income fund), including safety deposit box charges;
  • fees for certain investment advice (see Interpretation Bulletin IT-238, Fees Paid to Investment Counsel) or for recording investment income;
  • fees to have someone complete your return, but only if you have income from a business or property, accounting is a usual part of the operations of your business or property, and you did not use the amounts claimed to reduce the business or property income you reported (see Interpretation Bulletin IT-99, Legal and Accounting Fees); and
  • most interest you pay on money you borrow for investment purposes, but generally only as long as you use it to try to earn investment income, including interest and dividends. However, if the only earnings your investment can produce are capital gains, you cannot claim the interest you paid. For more information, contact us.

You cannot deduct on line 221 any of the following amounts:

Policy loan interest - To claim interest paid during 2010 on a policy loan made to earn income, have your insurer complete Form T2210, Verification of Policy Loan Interest by the Insurer, on or before the date your return is due.

Refund interest - If we paid you interest on an income tax refund, report the interest in the year you receive it, as we explain at line 121 in this guide. If we then reassessed your return and you repaid any of the refund interest in 2010, you can deduct the amount you repaid, up to the amount you had included in your income.

Carrying charges for foreign income - If you have carrying charges for Canadian and foreign investment income, identify them separately on Schedule 4, according to the percentage that applies to each investment.

Supporting documents - If you are filing electronically, keep all your documents in case we ask to see them at a later date. If you are filing a paper return, attach your completed Part IV of Schedule 4, but do not send your Form T2210. Keep all your documents in case we ask to see them at a later date.

If you have a tax shelter, see Tax shelters.

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

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

You can claim contributions you:

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.

Note
Do not calculate CPP contributions on self employment for earnings identified as code 81 on the T4 slips you received from a placement agency.

Making additional CPP contributions

You may be able to make CPP contributions on certain employment income for which no contribution was made (for example, tips that were not shown on a T4 slip) or additional contributions on T4 income if you had more than one employer in the year and the total CPP contributions on all T4 slips is less than the required amount. For more information, see Making additional CPP contributions under line 308.

How to calculate your contributions

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

If you were not a resident of Quebec on December 31, 2010, enter on line 222 and also on line 310 of Schedule 1, 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 were a resident of Quebec on December 31, 2010, enter on line 222 and also on line 310 of Schedule 1, in dollars and cents, the amount from line 10 of Schedule 8. Line 421 does not apply to you.

Notes
 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 2010, you:

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

If you are filing a return for a person who died in 2010, we will also prorate the CPP or QPP.

Request for refund of CPP contributions

Under the Canada Pension Plan, all requests for a refund of CPP over-contributions must be made within four years after the end of the year for which the request is being made.

Line 223 - Deduction for provincial parental insurance plan (PPIP) premiums on self-employment income

If you were a resident of Quebec on December 31, 2010, you have to pay PPIP premiums if any of the following conditions apply:

  • your net self-employment income on lines 135 to 143 of your return is $2,000 or more; or
  • the total of your employment income (including employment income from outside Canada) and your net self-employment income is $2,000 or more.

Complete Schedule 10 to calculate your PPIP premiums, and attach it to your paper return. Under proposed changes, you can claim, on this line, 43.716% of the total of your PPIP premiums. Enter on this line, in dollars and cents, the amount from line 7 of Schedule 10. Also, enter the same amount on your provincial income tax return for Quebec.


Line 224 - Exploration and development expenses

If you invested in a petroleum, natural gas, or mining venture in 2010 but did not participate actively, you can deduct your expenses on this line. If you participated actively, follow the instructions for line 135.

How to claim

Complete Form T1229, Statement of Resource Expenses and Depletion Allowance, using the information that the principals of the venture give you, such as T5, T101, T5013 or T5013A slips. Read the instructions on the backs of these slips.

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

Attach Form T1229 and your T5, T101, T5013, and T5013A slips to your paper 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.

If you have any questions about these expenses, contact our Business enquiries service. See Contacting us.

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 if the following two conditions apply:

  • your employment contract required you to pay them; and
  • 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 clothing.

Attach to your paper 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 will 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 2010 or a previous year, if you repaid them in 2010. 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. It is not necessary for you to be successful; however, the amount sought must be for salary or wages owed. You must reduce your claim by any amount awarded to you in respect of those fees or any reimbursement you received for your legal expenses.

Under proposed changes, you can deduct legal fees you paid to collect or establish a right to collect other amounts that must be included in employment income even if they are not directly paid by your employer.

Supporting documents - If you are filing electronically, keep all your documents in case we ask to see them at a later date. If you are filing a paper return, attach your completed Form T777, but do not send your other documents. Keep all your documents in case we ask to see them at a later date.

Tax Tip
You may be eligible for a rebate of any GST/HST you paid as part of your expenses (see line 457).

Line 231 - Clergy residence deduction

If you are a member of the clergy, 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.

Supporting documents - If you are filing electronically, or filing a paper return, do not send any documents. Keep all your documents in case we ask to see them at a later date.

Line 232 - Other deductions

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

Supporting documents - If you are filing electronically, or filing a paper return, do not send any documents. Keep all your documents in case we ask to see them at a later date.

Note
 A child who was born in 1993 or later can claim a deduction for certain income he or she reports. For more information, see Split income of a child under 18.

If you have a tax shelter, see Tax shelters.

Income amounts paid back

In 2010, you may have paid back amounts that you received and included in income (other than salary or wages) for 2010 or a previous year. If this applies to you, you can deduct most of these amounts on line 232 of your return for 2010. However, if you repaid, under a court order, support payments that you included on line 128, deduct the repayment on line 220.

In 2010, you may have repaid an amount you received from a registered disability savings plan and declared as income in 2010 or a previous year. If so, you can deduct the amount on line 232. For more information, go to our Registered disability savings plan (RDSP) page, see Information Sheet RC4460, Registered Disability Savings Plan, or contact us.

In 2010, you may have had an amount recovered from your gross OAS pension (shown in box 20 of your T4A(OAS) slip) because of an overpayment you received in a previous period. If so, you can claim a deduction on line 232 for the amounts repaid.

Notes
 If you had an OAS repayment for 2009, tax may have been withheld from your OAS benefits for 2010. The amount deducted is shown in box 22 of your T4A(OAS) slip for 2010. Do not deduct it on line 232. Claim it on line 437. To calculate your OAS repayment, if any, for 2010, see line 235 and complete the chart for line 235 on the federal worksheet you will find in the forms book.

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.

Employment Insurance (EI) benefits - You may have received more benefits than you should have and already paid them back to the payer of your benefits. For example:

  • The payer of your benefits 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 excess benefits you received directly to the payer of your benefits. 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 under line 235.

Supporting documents - If you are filing electronically, keep all your documents in case we ask to see them at a later date. If you are filing a paper return, attach your documents showing the amounts you paid back.

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 Act, 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 paid fees to collect (or establish a right to) salary or wages. It is not necessary for you to be successful; however, the amount sought must be for salary or wages owed. You must reduce your claim by any amount awarded to you in respect of those fees or any reimbursement you received for your legal expenses. (These fees must be deducted on line 229.)

    Under proposed changes, you can deduct legal fees you paid to collect or establish a right to collect other amounts that must be included in employment income even if they are not directly paid by your employer. (These fees must be deducted on line 229.)
  • 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 to you. You cannot claim legal fees you incurred to get a separation or divorce or to establish custody or visitation arrangements of a child. For more information, see Guide 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 more information about other legal fees you may deduct, see Interpretation Bulletin IT-99, Legal and Accounting Fees.

Other deductible amounts

The following are examples of other amounts that can be deducted on line 232:

Line 235 - Social benefits repayment

Employment Insurance (EI) benefits

You have to repay part of the EI benefits (line 119) you received in 2010 if:

  • there is an amount shown in box 15 of your T4E slip;
  • the rate shown in box 7 is 30%; and
  • your net income before adjustments on line 234 of your return, minus any amounts on lines 117 and 125, plus any deduction on line 213 and/or the amount for a repayment of registered disability savings plans income included on line 232, is more than $54,000.

Complete the chart on your T4E slip to calculate how much of your EI benefits you have to repay. If you also have to repay Old Age Security (OAS) benefits you received (see the next section), enter the EI benefits that you have to repay on lines 7 and 20 of the chart for line 235 on the federal worksheet in the forms book.

Old Age Security (OAS) benefits

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 on line 234 of your return, minus the amounts on lines 117 and 125, plus any deduction on line 213 and/or the amount for a repayment of registered disability savings plans income included on line 232, is more than $66,733. Complete the chart for line 235 on the federal worksheet in the forms book to calculate how much you have to repay, even if tax was withheld by Service Canada.

Note
 If you had an OAS repayment for 2009, tax may have been withheld from your monthly OAS pension for 2010. The amount deducted is shown in box 22 of your T4A(OAS) slip for 2010. Claim it on line 437. Similarly, if you have an OAS repayment for 2010, tax may be withheld starting with your July 2011 OAS payment. For more information, contact us.

Line 236 - Net income

We use this amount for certain calculations such as the Canada Child Tax Benefit, the GST/HST credit, and certain tax credits.

Notes
 If it applies, enter your spouse's 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 2010, you may want to carry it back to your 2007, 2008, or 2009 return. To do this, attach a completed Form T1A to your paper 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.

Taxable income (lines 244 to 256)

Line 244 - Canadian Forces personnel and police deduction

Enter the total of the amounts shown in box 43 of all your T4 slips.

Line 248 - Employee home relocation loan deduction

Enter the total of the amounts shown in box 37 of your T4 slips.

Line 249 - Security options deductions

Enter the total of the amounts shown in boxes 39 and 41 of your T4 slips. In addition, if you disposed of securities for which you had previously deferred the taxable benefit (see Security option benefits), claim 50% of the amount from line 4 of Form T1212, Statement of Deferred Security Options Benefits.

You may be electing for the special relief in respect of gains from a disposition of eligible securities on which you elected in a previous year to defer the security option benefits. Under proposed changes, the amount you can claim on line 249 may be more than 50% of line 4 of Form T1212, Statement of Deferred Security Options Benefits. To calculate the additional amount to claim on line 249, complete Form RC310, Election for Special Relief for Tax Deferral Election on Employee Security Options.

You may be able to claim a deduction for donating securities you acquired through your employer's security options plan.

For more information, see "Gifts of securities acquired under a security option plan" in Pamphlet P113, Gifts and Income Tax.

Line 250 - Other payments deduction

Generally, you can deduct the amount from line 147 of your return. This is the total of the workers' compensation payments, social assistance payments, and net federal supplements you entered on lines 144, 145, and 146.

Note
If your net income before adjustments on line 234, minus the amounts on lines 117 and 125, plus any deduction on line 213 and/or the amount for a repayment of registered disability savings plans income included on line 232, is more than $66,733 and you reported net federal supplements on line 146, you may not be entitled to claim the whole amount from line 147. Contact us to determine how much you can deduct.

Line 251 - Limited partnership losses of other years

If you had limited partnership losses in previous years that you have not already deducted, you may be able to claim part of these losses this year. For more information, contact us.

You can carry forward limited partnership losses indefinitely. If you claim these losses, attach to your paper return a statement showing a breakdown of your total losses, the year of each loss, and the amounts deducted in previous years. You cannot use the amount shown in box 24 of your T5013 or T5013A slips for 2010 on your return for 2010.

Line 252 - Non-capital losses of other years

In 2010, enter the amount of the unapplied non-capital losses you reported on your 2003 to 2009 returns that you want to apply. For non-capital losses incurred in tax years ending after March 22, 2004, and before 2006, the loss carry-forward period is 10 years.

For non-capital losses incurred in tax years after 2005, the loss carry forward period is 20 years.

Also, enter any unapplied farming and fishing losses you reported on your 2000 to 2009 returns that you want to apply in 2010. Your available losses are shown on your notice of assessment or notice of reassessment for 2009.

There are restrictions on the amount of certain farm losses that you can deduct each year. If you have a farming or fishing business, see Guide T4003, Farming Income, Guide RC4060, Farming Income and the AgriStability and AgriInvest Programs Guide, Guide RC4408, Farming Income and the AgriStability and AgriInvest Programs Harmonized Guide, or Guide T4004, Fishing Income, for more information.

If you need more information on losses, see Interpretation Bulletin IT-232, Losses - Their Deductibility in the Loss Year or in Other Years.

Line 253 - Net capital losses of other years

Within certain limits, you can deduct your net capital losses of previous years that you have not already claimed. Your available losses are shown on your notice of assessment or notice of reassessment for 2009. You probably will have to adjust any losses you incurred after 1987 and before 2001. For more information, see Guide T4037, Capital Gains.

Line 254 - Capital gains deduction

You may be able to claim a capital gains deduction for gains realized on the disposition of qualified small business corporation shares, qualified farm property, and qualified fishing property.

For more information, see Guide T4037, Capital Gains.

Line 255 - Northern residents deductions

To make your claim, use Form T2222, Northern Residents Deductions. Residents of the Northwest Territories, Nunavut, and Yukon will find this form in their forms book. You can also get a copy by going to our Forms and publications page. For a list of the areas that qualify, see Publication T4039, Northern Residents Deductions - Places in Prescribed Zones.

Supporting documents - If you are filing electronically, keep all your documents in case we ask to see them at a later date. If you are filing a paper return, attach your completed Form T2222, but do not send your other documents. Keep all your documents in case we ask to see them at a later date.

Line 256 - Additional deductions

In the space to the left of line 256, 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 paper return.

Exempt foreign income

If you included foreign income on your return (such as support payments you received from a resident of another country and reported on line 128) that is tax-free in Canada because of a tax treaty, you can claim a deduction for it. If you do not know whether any part of the foreign income is tax-free, contact us.

Under the Canada-U.S. tax treaty, you can claim a deduction equal to 15% of the U.S. Social Security benefits, including U.S. Medicare premiums, you included in your income on line 115.

If you have been a resident of Canada and have received U.S. Social Security benefits continuously during the period starting before January 1, 1996, and ending in 2010, you can claim a deduction equal to 50% of the U.S. Social Security benefits, received in 2010.

This 50% deduction also applies to you if you are receiving benefits related to a deceased individual and if you meet all the following conditions:

  • the deceased person was your spouse or common-law partner immediately before their death;
  • the deceased person had, continuously during a period starting before 1996 and ending immediately before the person’s death, been a resident of Canada and received benefits to which paragraph 5 of Article XVIII of the Canada-U.S. Tax Treaty applied; and
  • you have, continuously during a period starting at the person’s time of death and ending in 2010, been a resident of Canada and received such benefits.

Vow of perpetual poverty

If you have taken a vow of perpetual poverty as a member of a religious order, you can deduct the amount of earned income and pension benefits that you have given to the order. Attach to your paper return a letter from your order or your employer stating that you have taken a vow of perpetual poverty. For more information, see Interpretation Bulletin IT-86, Vow of Perpetual Poverty.

Adult basic education tuition assistance

You may have received (and included in your income) assistance to cover all or part of the tuition fees you paid for courses at a primary or secondary school level. If so, you can claim a deduction for the amount of qualifying assistance shown in box 21 of your T4E slip.

Note
You may have received taxable tuition assistance shown in box 20 of the T4E slip for post-secondary level courses or courses that provide or improve skills in an occupation. If so, these amounts are not deducted on line 256, but you may be eligible for the tuition, education, and textbook amounts (see line 323).

Employees of prescribed international organizations

If, in 2010, you were employed by a prescribed international organization, such as the United Nations, you can claim a deduction for net employment income you report from that organization. Net employment income is your employment income minus the related employment expenses that you are claiming. If you do not know whether your employer is a prescribed international organization, contact us.

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Date modified:
2011-01-05