5013-G

Getting started

Gather all the documents needed to complete your return. This includes your information slips (such as T3, T4, T4A, and T5 slips) and receipts for any deductions or credits you plan to claim. For more information, see "What do you include with your return and what records do you keep?"(see below).

As you complete your return, when you come to a line that applies to you, you can look it up in this guide, or see the back of your information slips for more instructions.

Mail or deliver your return in the envelope included in this guide. Use your mail-in label if you have one, and make note of the address for future reference. If you are preparing other people's returns, mail or deliver each person's return in a separate envelope.

Note
If you have a farming business and you are participating in the net income stabilization account (NISA) program, use the envelope contained in the Farming Income and NISA guide.

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

If you are filing a return, include one copy of each of your information slips. Make sure you attach your Schedule 1. Your return, the guide explanations, the forms, or the schedules will tell you when to attach other supporting documents, such as certificates, forms, schedules, or official receipts.

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

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

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

You should also keep a copy of your return for 2002, the related Notice of Assessment, and any Notice of Reassessment. These can help you complete your return for 2003. For example, your notice for 2002 will tell you:

• your RRSP deduction limit for 2003;
• your unused RRSP contributions for 2003;
• your capital and non-capital loss balances; and
• your tuition and education amounts carry-forward balance (see line 323).

Non-residents and non-residents electing under section 217 - You also need to include a completed Schedule A, Statement of World Income and Schedule C, Electing Under Section 217 of the Income Tax Act, if you are filing under section 217. You will find these schedules in the centre of this guide.

What if you are missing information?

If you have to file a return for 2002, make sure you file it on time even if some slips or receipts are missing. If you know that you will not be able to get a slip by the due date, attach to your return a note stating the payer's name and address, the type of income involved, and what you are doing to get the slip. To calculate the income to report, and any related deductions and credits you can claim, use any stubs you may have and attach them to your return.

Electing under section 217

What is a section 217 election?

Canadian payers have to withhold non-resident tax on certain types of income, including the types of income listed below, that they paid or credited to you as a non-resident of Canada. The tax withheld is usually your final tax obligation to Canada on this income.

Under section 217 of the Income Tax Act, you can choose to file a Canadian return and report the types of Canadian-source income listed on this page. By doing this, you will pay tax on this income using an alternative taxing method and may receive a refund of some or all of the non-resident tax withheld.

Choosing to report these types of income on a Canadian return is called "electing under section 217 of the Income Tax Act." The return on which you report the income is referred to as a "section 217 return."

Does section 217 apply to you?

You have to send us a section 217 return for 2002 if you submitted Form NR5, Application by a Non-Resident of Canada for a Reduction in the Amount of Non-Resident Tax Required to be Withheld, for 2002 and we approved it.

You have the option of sending us a section 217 return for 2002 if you did not submit Form NR5 to us for 2002 and you received any of the following types of Canadian-source income (referred to as section 217 income) in 2002 while you were a non-resident:

• Old Age Security pension;
• Canada Pension Plan and Quebec Pension Plan benefits;
• most superannuation and pension benefits;
• registered retirement savings plan payments;
• registered retirement income fund payments;
• death benefits;
• Employment Insurance benefits;
• certain retiring allowances;
• registered supplementary unemployment benefit plan payments;
• deferred profit-sharing plan payments;
• amounts received from a retirement compensation arrangement, or the purchase price of an interest in a retirement compensation arrangement;
• prescribed benefits under a government assistance program; and
• Auto Pact benefits.

When is your section 217 return due?

Your 2002 section 217 return has to be filed on or before June 30, 2003.

If you are late in sending us your section 217 return, your election is not valid. If the correct amount of non-resident tax was not withheld, we will send you a non-resident tax assessment.

You may also be reporting Canadian-source income, other than eligible Section 217 income, on the return. If you have a taxable capital gain from disposing of taxable Canadian property, or if you have to pay tax on employment income you are reporting, you have to file your return by April 30, 2003.

If you are reporting business income and you have to pay tax on that income, you have to file the return on or before June 15, 2003.

Note
If you owe tax for 2002 and do not file your return for 2002 within the dates we specified above, we will charge you a late-filing penalty. We will also charge compound daily interest starting May 1, 2003 on any unpaid amounts owing for 2002.

Completing your section 217 return

Before you start, gather all the documents you will need to complete your return. This includes your information slips (such as your NR4 slips), receipts for any deductions or credits you plan to claim, and the following (which you will find in the centre of this guide):

• Income Tax and Benefit Return for Non-Residents and Deemed Residents of Canada;
• Schedule A, Statement of World Income;
• Schedule B, Allowable Amount of Non-Refundable Tax Credits;
• Schedule C, Electing Under Section 217 of the Income Tax Act;
• Schedule 1, Federal Tax; and
• the Federal Worksheet.

Step 1 - Write "Section 217" at the top of page 1 of your return.

Step 2 - Complete the Identification area of the return.

Step 3 - Include the following income on your return:

• all eligible section 217 income that was paid or credited to you in 2002; and
• your 2002 Canadian-source employment and business income, and taxable capital gains from disposing of taxable Canadian property as described in the section called "Total income".

Complete Part 1 and Part 2 of Schedule C, Electing Under Section 217 of the Income Tax Act.

Step 4 - Claim only those deductions on lines 207 to 256 that apply to you.

Step 5 - Complete Schedule A, Statement of World Income, and attach it to your return.

Step 6 - Complete Schedule 1, Federal Tax, and attach it to your return. On Schedule 1:

• Make sure you enter the correct amount on line 1 when calculating your federal tax.
• Claim the federal non-refundable tax credits on lines 300 to 349 that apply to you.
• Complete Schedule B, Allowable Amount of Non-Refundable Tax Credits. Enter the allowable amount of non-refundable tax credits on line A on the back of Schedule 1.
• Calculate and enter the amount of surtax for non-residents and deemed residents of Canada on line B on the back of Schedule 1.
• If the amount you entered on line 1 of Schedule 1 was the amount from line 16 of your Schedule A, complete Part 3 of Schedule C to calculate the section 217 tax adjustment for line 445.

Step 7 - Complete lines 420 to 435 on the return, if they apply to you.

Step 8 - On line 437 of the return, enter the non-resident tax withheld on your section 217 income (from your NR4 information slip) plus any other amounts withheld on your information slips for any other Canadian-source income that you are reporting on this return. Complete the remainder of the return.

Note
Make sure you attach your information slips, and a completed Schedule 1, Schedule A, and Schedule C, to your return.

As long as you file your section 217 return on time, we will refund any taxes withheld that are more than the amounts you owe.

After you file

What happens to your return after we receive it?

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

When can you expect your refund?

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

To find out about your refund, use Telerefund, one of our T.I.P.S. services or contact the International Tax Services Office.

When will we pay interest?

We will pay you compound daily interest on your tax refund for 2002, starting on whichever of the following three dates is latest:

• June 15, 2003;
• the 46th day after you file your return; or
• the day after you overpaid your taxes.

Income tax problems?

Our Enquiries staff at the International Tax Services Office is committed to resolving your tax-related problems by giving you accurate, timely, courteous, fair, and confidential answers to your questions. However, if a problem cannot be resolved, you can contact the office's Problem Resolution Program. The telephone number is on the back cover of this guide.

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

What should you do if you disagree?

If you disagree with your assessment or reassessment, contact the International Tax Services Office for more information. If you still disagree, you can make a formal objection by sending a completed Form T400A, Objection - Income Tax Act , or a signed letter addressed to the Chief of Appeals, Ottawa Tax Services Office, 333 Laurier Avenue West, Ottawa ON K1A 0L9, CANADA, or to the Chief of Appeals at your tax services office or your tax centre on or before whichever of the following two dates is later:

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

How do you change a return?

If you need to make a change to any return you have sent us, do not file another return for that year. Instead, send both of the following to the International Tax Services Office:

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

Note
Send your Form T1-ADJ or letter separately from your return for 2002.

You can ask for a refund for years as far back as 1985. It usually takes eight weeks before we complete the adjustment and mail you a Notice of Reassessment.

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

If you have not already filed one, you can file a return (other than to make an election under section 217) to claim a refund for 1985 or any year after that. If you are filing a return for a year before 2002, make sure you attach receipts for all the deductions or credits you are claiming.

What is a voluntary disclosure?

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

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

For details, and to see if your disclosure qualifies for this program, get Information Circular 00-1, Voluntary Disclosures Program, or call the Voluntary Disclosures Program officer in the Appeals Division of your tax services office or the International Tax Services Office. If you wish, you can discuss your situation first on a no-name or hypothetical basis.

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

What should you do if you move?

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

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

You can tell us your new address by phone, in writing, in person, or on our www.ccra.gc.ca/newaddress Web page. If you are writing, send your letter to the International Tax Services Office. Make sure you sign it, and include your social insurance number or temporary taxation number, your new address, and the date of your move. If you are writing for other people, including your spouse or common-law partner, include their social insurance numbers or temporary taxation numbers, and have each of them sign the letter authorizing the change to his or her records.

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

Should you be paying your taxes by instalments?

You may have to pay your taxes by instalments if not enough income tax is withheld from your income. To find out if you have to pay your taxes for 2003 by instalments, estimate your taxes and credits for 2003 using your return for 2002. Enter those amounts in the chart on the Federal Worksheet in the centre of this guide. The chart contains the most common factors to consider. To find out all of the factors, or to calculate your payments, get Form T1033-WS, Worksheet for Calculating 2003 Instalment Payments .

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

You can authorize us to withdraw your instalment payments automatically from your account at a financial institution in Canada. To do so, or for more information, get Form T1162A, Pre-Authorized Payment Plan (Personal Quarterly Instalment Payments) .

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