Non-refundable tax credits

Non-refundable tax credits reduce the amount of income tax you owe. However, if the total of these credits is more than the amount you owe, you will not get a refund for the difference.

The information at lines 300 to 307 and 315 explains, in general, how to claim personal amounts. For more details, get Interpretation Bulletin IT-513, Personal Tax Credits.

Newcomers to Canada and emigrants

If you immigrated to or emigrated from Canada in 1998, you may have to reduce your claim for personal amounts (lines 300 to 307 and 315). For details, get either the pamphlet called Newcomers to Canada or the pamphlet called Emigrants and Income Tax. Be sure to enter the date of your move in the Identification area on page 1 of your return.

Amounts for non-resident dependants (lines 303 and 306)

You may be able to claim a personal amount for certain dependants who live outside Canada, if they depended on you for support. You may be able to make this claim for your spouse (line 303), or for your or your spouse's children and grandchildren who were born in 1980 or earlier and who were mentally or physically infirm (line 306). You cannot claim an amount for any other relatives who lived outside Canada for all of 1998.

If your spouse, or your or your spouse's children or grandchildren already have enough income or assistance for a reasonable standard of living in the country in which they live, we do not consider them to depend on you for support. Also, we do not consider gifts you send them to be support.

How to claim

• Follow the instructions at lines 303 and 306 to calculate your spousal amount, and amounts for infirm dependants age 18 or older.
• Attach proof of your support payments to your paper return. The proof of payment has to show your name, the amount, the date of the payment, and the dependant's name and address. If you sent the funds to a guardian, the guardian's name and address also have to appear on the proof of payment.

Line 300 - Basic personal amount

Claim the basic personal amount of $6,456.

Under proposed changes, you may be able to claim an additional amount on line 307.

Line 301 - Age amount

If you were 65 or older on December 31, 1998, and your net income (line 236 of your return) is:

• $25,921 or less, enter $3,482 on line 301;
• more than $25,921, but less than $49,134, use the chart that follows to calculate your claim; or
• $49,134 or more, you cannot claim an amount on line 301.

Age amount

Maximum claim			$	3,482.00	1
Your net income from line236	$		2
Base amount	-	25,921.00	3
Line 2 minus line 3	$		4
	×	15%	5
Multiply line4 by 15% and enter the result on this line			-		6
Line1 minus line6 (if negative, enter "0")			$		7
Enter the amount from line 7 on line 301 of your return.

Date of birth - Be sure to enter your date of birth in the Identification area on page 1 of your return.

Tax Tip
If you do not need all of your age amount to reduce your federal income tax to zero, you can transfer the unused part to your spouse. See line 326 for details.

You may be able to claim all or part of your spouse's age amount. See line 326 for details.

Line 303 - Spousal amount

You may be able to claim a spousal amount if you lived with and supported your spouse (as defined on page 14) in 1998. If your spouse's net income (see the next section) is:

• $538 or less, claim $5,380;
• more than $538, but less than $5,918, complete the calculation on line 303 of your return; or
• $5,918 or more, you cannot claim a spousal amount.

Under proposed changes, you may be able to claim an additional amount on line 307.

Net income of spouse

This is the amount on line 236 of your spouse's return, or the amount that it would be if he or she filed a return. If you were living with your spouse on December 31, 1998, use your spouse's net income for the whole year. This applies even if you got married in 1998, or if you separated and got back together in 1998.

If you separated in 1998 because of a breakdown in your relationship, and were not back together on December 31, 1998, reduce your claim only by your spouse's net income before the separation. For a common-law spouse, you also have to be separated for at least 90 days.

There are exceptions to the above rules if you were required to make support payments to your spouse or former spouse. Get the pamphlet called Support Payments to help you prepare your return correctly.

Tax Tip
If you cannot claim the spousal amount (or you have to reduce your claim) because of dividends your spouse received from taxable Canadian corporations, you may be able to reduce your tax if you report all of your spouse's dividends. See line 120 for details.

Line 305 - Equivalent-to-spouse amount

You may be able to claim an equivalent-to-spouse amount if, at any time in the year, you were single, divorced, separated, or widowed and, at that time, you supported a dependant to whom all of the following applied. The dependant:

• was under 18, your parent or grandparent, or mentally or physically infirm;
• was related to you by blood, marriage, or adoption;
• lived with you in a home that you maintained; and
• lived in Canada. If the dependant is your child, the child is not required to have lived in Canada, but still must have lived with you. This would be possible, for example, if you were a deemed resident (as defined on page 11) living in another country with your child.

Your dependant may live away from home while attending school. If the dependant ordinarily lived with you when not in school, we consider that dependant to live with you for the purposes of this credit.

You cannot claim an equivalent-to-spouse amount if any of the following applies:

• The 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 $5,918 or more.
• You are claiming a spousal amount (see line 303).
• The claim is for your common-law spouse. However, you may be able to claim the spousal amount on line 303.
• Someone else in your household is making this claim. Each household is allowed only one claim for the equivalent-to-spouse amount, even if there is more than one dependant in the household.
• The claim is for a child for whom you can deduct support payments, or for whom you are required to make non-deductible support payments. However, if you separated in 1998, due to a breakdown in your relationship, some special rules apply. For details, get the pamphlet called Support Payments.

Note
If you were separated, but reconciled during the year, you can claim the equivalent-to-spouse amount if you otherwise qualify for it and do not claim the spousal amount (line 303) for the year.

Under proposed changes, you may be able to claim an additional amount on line 307.

How to claim

• Calculate your dependant's net income. Net income is the amount on line 236 of your dependant's return, or the amount that it would be if he or she filed a return.
• Complete Schedule 5 to calculate your claim, and attach it to your paper return.

Notes
You cannot split this amount with another person. Once you claim this amount for a dependant, no one else can claim this amount or an amount on line 306 for that dependant.

If you and another person both can claim this amount for the same dependant, but cannot agree who will claim it, neither of you is allowed to claim the amount.

If the dependant is infirm and age 18 or older, you also may be able to claim an amount on line 306 for that dependant. Under proposed changes, you may be able to claim an amount on line 315 instead of line 306.

Line 306 - Amount for infirm dependants age 18 or older

You can claim an amount for your or your spouse's dependent child or grandchild only if that child or grandchild was mentally or physically infirm and wasborn in 1980 or earlier.

You can also claim an amount for a person who meets all of the following conditions. The person must have been:

• your or your spouse's parent, grandparent, brother, sister, aunt, uncle, niece, or nephew;
• born in 1980 or earlier;
• mentally or physically infirm;
• dependent on you, or on you and others for support; and
• living in Canada at any time in the year.

Notes
A parent includes someone on whom you were completely dependent and who had custody and control of you when you were under 19 years of age.

A child can include anyone who has become dependent on you, even if he or she is older than you.

If someone else is claiming an amount on line 305 for a dependant, you cannot claim an amount on line 306 for that dependant. If you are claiming an amount on line 305 for a dependant who is infirm and age 18 or older, you may also be able to claim an amount on line 306 for that dependant. You can claim an amount only if the 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 $6,456.

If you can deduct support payments you made for your child, or you are required to make non-deductible child support payments for that child, you cannot claim an amount on line 306 for that child. However, if you separated in 1998 due to a breakdown in your relationship, some special rules apply. For details, get the pamphlet called Support Payments.

How to claim

• Calculate the net income of each of your dependants. Net income is the amount on line 236 of your dependant's return, or the amount that it would be if he or she filed a return.
• Complete Schedule 6 and attach it to your paper return. You also should have a signed statement from a doctor that gives the nature, commencement, and duration of the dependant's infirmity. Keep the statement in case we ask to see it.

Claims made by more than one person - If you and another person support the same dependant, you can split the claim for that dependant. However, the total of your claim and the other person's claim cannot be more than the maximum amount allowed for that dependant.

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 more than $4,103, it may be better for you to claim the proposed new amount at line 315.

Tax Tip
If your dependant qualifies for the disability amount, you may be able to claim all or part of that amount. See line 318 for details.

Line 307 - Personal amount supplement

Under proposed changes, you may be able to claim an amount for 1998 in addition to your basic personal amount (line 300). You also may be able to claim an amount if you had a spouse (as defined on page 14) or lived with a person described at line 305. However, in any case, you will not be able to claim an amount if your net income (line 236 of your return) was more than $38,911.

You can claim an amount if your net income was more than $6,456 but less than $19,456, and one of the following applies:

• You neither had a spouse, nor lived with a person described at line 305.
• You had a spouse, or lived with a person described at line 305, but his or her net income was more than $6,955.

If the above situation does not apply, you can claim an amount if all of the following apply:

• You had a spouse, or lived with a person described at line 305.
• Your spouse, or the person described at line 305, had a net income of less than $6,956.
• The total of your net income and the net income of your spouse (or the person described at line 305) was less than $38,912.

In that case, enter on line 393 of Schedule 13 your spouse's net income, or enter on line 397 the net income of the person described at line 305.

Tax tip
If your spouse, or the person described at line 305, had a net income of more than $6,456, but less than $6,956, he or she also should claim an amount on line 307 of his or her own return.

Complete Schedule 13 to make your claim.

Line 308 - Canada or Quebec Pension Plan contributions through employment

Enter the total, in dollars and cents, of the amounts shown in boxes 16 and 17 of your T4 slips. Do not enter more than $1,068.80. If you contributed to the QPP in 1998 but lived outside Quebec on December 31, 1998, attach to your paper return the RL-1 slip your employer sent you.

If you contributed more than $1,068.80, enter the excess amount on line 448 of your return. We will refund this overpayment to you, or use it to reduce your balance owing. However, if you lived in Quebec on December 31, 1998, and contributed more than $1,068.80, claim the overpayment on your Quebec provincial return.

In some cases, you may have an overpayment, even if you contributed less than $1,068.80. For example, we will prorate your CPP or QPP contribution, and show the correct amount on your Notice of Assessment if, in 1998, either of the following situations applied to you:

• You were a CPP participant and you turned 18 or 70, or received a CPP retirement or disability pension.

• You were a QPP participant and you turned 18 or received a QPP disability pension.

If you would like to calculate your CPP overpayment, get Form T2204, Calculation of Employee Overpayment of 1998 Canada Pension Plan Contributions and 1998 Employment Insurance Premiums.

You may be able to make CPP contributions on certain employment income for which no contributions (or less than the maximum) were made. For more information, see "Making additional CPP contributions" on this page.

Tax-exempt employment income earned by a registered Indian - If you are a registered Indian with tax-exempt employment income, and there is no amount shown in box 16 of your T4 slip, you may be able to contribute to the CPP on this income. See "Making additional CPP contributions" under line 310 for details.

Line 310 - Canada or Quebec Pension Plan contributions payable on self-employment and other earnings

You can claim an amount for the Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) contributions that you have to make on self-employment earnings and on limited or non-active partnership income.

If you have both employment and self-employment earnings, the amount of CPP or QPP contributions that you have to make on your self-employment earnings will depend on how much you have already contributed to the CPP or QPP as an employee. You cannot use your self-employment losses to reduce the CPP or QPP contributions that you paid on your employment earnings.

Making additional CPP contributions

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

• had more than one employer in 1998;
• had income, such as tips, from which your employer did not have to withhold contributions; or
• were in a type of employment that was not covered under CPP rules, such as casual employment.

To make additional CPP contributions for 1998, get Form CPT20, Election to Pay Canada Pension Plan Contributions. Attach a completed copy to your paper return, or send it to us separately before May 1, 2000. This form lists the eligible employment income on which you can make additional CPP contributions.

If the amount on line 308 is less than $1,068.80, you can contribute 6.4% on any part of the income on which you have not already made contributions. The 1998 income limit for which you can contribute to the CPP is $36,900. Making additional contributions may increase the pension you receive later.

Complete Schedule 8 to calculate your additional CPP contributions. Include them on lines 310 and 421.

Making optional QPP contributions

Include on line 310 any optional QPP contributions you made on your Quebec provincial return, if you filed one. Also, attach a completed Schedule 8 to show how you calculated the amount.

How to calculate your contributions

Complete Schedule 8 to calculate your CPP or QPP contributions payable, and attach it to your paper return. If you were a member of a partnership, make sure you include only your share of the net profit or loss.

If you were not a resident of Quebec, use the amounts on lines 135 to 143 and line 122 of your return. Enter on line 310 and line 421 the required contribution in dollars and cents.

If you were a resident of Quebec, use the amount on line 164 of your Quebec provincial return. Enter on line 310 the amount of the contribution in dollars and cents.

Note
We will prorate your CPP or QPP contribution, and show the correct amount on your Notice of Assessment in certain situations, such as if, in 1998, you:

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

• were a QPP participant and you turned 18 or received a QPP disability pension.

Line 312 - Employment Insurance premiums

Enter the total, in dollars and cents, of the amounts shown in box 18 of all your T4 and T4F slips. Do not enter more than $1,053.00.

If you contributed more than $1,053.00, enter the excess amount on line 450 of your return. We will refund this overpayment to you, or use it to reduce your balance owing.

In some cases, you may have an overpayment even if you contributed less than $1,053.00. If so, we will calculate your overpayment and show it on your Notice of Assessment. If you would like to calculate your overpayment, get Form T2204, Calculation of Employee Overpayment of 1998 Canada Pension Plan Contributions and 1998 Employment Insurance Premiums.

If the total of the Employment Insurance (EI) insurable earnings shown in box 24 of all your T4 slips (or box 14 if box 24 is blank) and box 16 of your T4F slips is $2,000 or less, we will refund your total EI premiums to you or use the amount to reduce your balance owing. In this case, do not enter your total EI premiums on line 312. Instead, enter the amount on line 450.

If your total EI insurable earnings are more than $2,000 and less than $2,059, we will refund a part of your EI premiums to you or use the amount to reduce your balance owing. In this case, enter your total EI premiums on line 312. We will calculate your refund and show it on your Notice of Assessment. If you would like to calculate your refund yourself, get Form T2204.

Line 314 - Pension income amount

You may be able to claim up to $1,000 if you reported pension or annuity income on line 115 or line 129 of your return. Therefore, make sure you have reported your pension or annuity income correctly.

Note
Only pension or annuity income you report on line 115 or 129 qualifies for the pension income amount. Therefore, amounts such as Old Age Security benefits, Canada Pension Plan benefits, Quebec Pension Plan benefits, Saskatchewan Pension Plan payments, death benefits, and retiring allowances do not qualify.

Use the following chart to calculate your claim.

Pension income amount

Amount from line115 of your return			$		1
Annuity payments from line129 of your return (box16 of your T4RSPslip) only if you were 65 or older on December 31,1998, or you received the payments because of the death of your spouse			+		2
Line 1 plus line 2			$		3
Foreign pension income included on line 115 and deducted on line256	$		4
Income from a U.S. individual retirement account included on line 115	+		5
Line 4 plus line 5			-		6
Line 3 minus line 6			$		7
Enter on line314 of your return, $1,000 or the amount from line7, whichever is less.

Tax Tip
If you do not need all of your pension income amount to reduce your federal income tax to zero, you can transfer the unused part to your spouse.

You may be able to claim all or part of your spouse's pension income amount. See line 326 for details.

Line 316 - Disability amount

You may be able to claim a disability amount of $4,233 if your doctor, optometrist, or audiologist certifies both of the following:

• You had a severe mental or physical impairment in 1998, which caused you to be markedly restricted in any of the basic activities of daily living.
• Your impairment was prolonged, which means it has lasted, or is expected to last, for a continuous period of at least 12 months.

You may be markedly restricted in a basic activity of daily living if either:

• you are blind; or
• you are unable to feed and dress yourself, control bowel and bladder functions, walk, speak, hear, or perceive, think, and remember. You may also be markedly restricted if it takes you an extremely long time to perform any of these activities, even with therapy and the use of appropriate aids and medication.

Note
If you receive a disability benefit (such as CPP or QPP disability benefits) it does not necessarily mean that you are eligible to claim this credit. To qualify for the disability amount, your ability to perform an activity of daily living has to be markedly restricted all or almost all of the time.

Under proposed changes, after February 24, 1998, a psychologist can certify your impairment regarding your ability to perceive, think, and remember. An occupational therapist can certify your impairment regarding your ability to dress and feed yourself or to walk.

Tax Tip
If you or anyone else paid for an attendant or for care in a nursing home or other establishment because of your impairment, it may be more beneficial to claim the amounts paid as medical expenses instead of the disability amount. In some circumstances, both amounts may be claimed. See "Care by an attendant, or care in a nursing home, school, institution, or other establishment" on page 39 for more information.

How to claim

• If you are making a new application for this amount, you have to submit a completed and certified Form T2201, Disability Tax Credit Certificate. We will review your claim before we assess your return to determine if you qualify. Once we approve your claim, you will be able to claim this amount for future years, as long as your circumstances do not change.
• If you were allowed the disability amount in 1997 and you still met the eligibility requirements in 1998, you can claim the disability amount in 1998 without sending us another Form T2201. However, you have to send us a new one if the period stated on the certificate ended in 1997 or earlier.

We will accept a photocopy of your Form T2201 only if the signature of the person authorized to sign it is an original, not a photocopy. For more information, get the guide called Information Concerning People with Disabilities. The guide also contains Form T2201.

Tax Tip
If you do not need all of your disability amount to reduce your federal income tax to zero, you can transfer the unused part to your spouse (see line 326) or another supporting person (see line 318).

You may be able to claim all or part of your spouse's (see line 326) or other dependant's (see line 318) disability amount.

Line 318 - Disability amount transferred from a dependant other than your spouse

If you have a dependant who can claim the disability amount (see line 316) you may be able to claim all or part of this amount. You can claim the unused part of the disability amount for your dependant who lived in Canada at any time in 1998 if any of the following applies:

• you claimed an equivalent-to-spouse amount on line 305 for that dependant;
• the dependant was your or your spouse's child, grandchild, parent, or grandparent, and you could have claimed an equivalent-to-spouse amount on line 305 for that dependant if you did not have a spouse and if the dependant did not have any income;
• the dependant was your or your spouse's child or grandchild, and you made a claim on line 306, "Amount for infirm dependants age 18 or older," for that dependant;
• the dependant was your or your spouse's child or grandchild, and you could have made a claim on line 306, "Amount for infirm dependants age 18 or older," for that dependant if he or she had no income and had been 18 years of age or older in 1998; or
• the dependant was your or your spouse's parent or grandparent, and you could have made a claim on line 306, "Amount for infirm dependants age 18 or older," for that dependant if he or she had no income. In addition, the individual must have been dependent on you because of his or her mental or physical infirmity.

If you can deduct support payments you made for your child, or you are required to make non-deductible child support payments for that child, you cannot claim a disability amount for your child. However, if you separated in 1998 due to a breakdown in your relationship, some special rules apply. For details, get the pamphlet called Support Payments.

Tax Tip
If you or anyone else paid for an attendant or for care in a nursing home or other establishment because of your dependant's impairment, it may be more beneficial to claim the amounts paid as medical expenses instead of the disability amount. In some circumstances, both amounts may be claimed. See "Care by an attendant, or care in a nursing home, school, institution, or other establishment" on page 39 for more information.

How to claim

• Use the chart on page 37 to calculate how much of each dependant's disability amount you can claim.
• Attach to your paper return a properly completed and certified Form T2201, Disability Tax Credit Certificate, for each dependant. If you were allowed a disability amount in a previous year and the dependant still met the eligibility requirements in 1998, you can claim the disability amount in 1998 without sending us another Form T2201. However, you have to send us a new one if the period stated on the certificate ended in 1997 or earlier. If you are not attaching Form T2201 for a dependant, attach a note stating the dependant's name, social insurance number, and relationship to you.

Unused part of dependant's disability amount

Dependant's disability amount	$	4,233.00	1
Total of amounts your dependant can claim on lines300 to 315	+		2
Line 1 plus line 2	$		3
Dependant's taxable income (line260)	-		4
Line 3 minus line 4 (if negative, enter "0")	$		5
Enter on line 318 of your return $4,233 or the amount from line 5, whichever is less.

If more than one person is making a claim for the same dependant, attach a note to your paper return including the name and social insurance number of anyone else making a claim. The total claimed for that dependant cannot be more than the amount on line 5 or $4,233, whichever is less.

You can claim this credit only if the spouse of the person with a disability is not already claiming the disability tax credit or any other non-refundable tax credit (other than medical expenses) for the person with a disability, and you supported that person.

Line 319 - Interest paid on student loans

Under proposed changes, you can claim an amount for the interest you, or a person related to you, paid in 1998 on loans for post-secondary education made to you under the Canada Student Loans Act, the Canada Student Financial Assistance Act, or similar provincial or territorial government laws. Enter the total of the amounts shown on the receipts. If you do not wish to claim these amounts on your 1998 return, you can carry them forward and apply them on any one of the next five years' returns.

Receipts - Attach the receipts to your paper return. If you are using EFILE (see "Filing your return" on page 11) show all your receipts to your EFILE service provider, and keep them in case we ask to see them.

Line 323 - Tuition and education amounts

Claim your eligible tuition and education amounts on this line. Attach to your paper return a completed Schedule 11, Tuition and Education Amounts, which includes lines for your tuition and education amounts carry-forward balance from 1997, your eligible tuition fees paid (line 320), and your education amount (lines 321 and 322) for 1998.

Eligible tuition fees

Claim the tuition fees paid for courses you took in 1998. You cannot claim other expenses, such as books, or board and lodging. Most courses at the post-secondary level or that develop or improve skills in an occupation qualify. However, more than $100 for the year must have been paid to each educational institution whose fees you claim. For more information about what kinds of institutions and fees qualify, get the pamphlet called Students and Income Tax.

Forms

• If you are claiming tuition fees paid to an institution in Canada, you must have either an official tax receipt or Form T2202A, Tuition and Education Amounts Certificate.
• If you are claiming tuition fees paid to an educational institution outside Canada, you must have your educational institution complete either Form TL11A, Tuition Fees Certificate - University Outside Canada, or Form TL11C, Tuition Fees Certificate - Commuters to the United States, whichever applies.
• If you are claiming tuition fees paid to a flying school or club in Canada, you must have your school or club complete Form TL11B, Tuition Fees Certificate - Flying School or Club.

You can get these forms from us. You can also get Form TL11B from your flying school or club.

Education amount

You can claim $200 for each whole or part month in 1998 that you were enrolled in a qualifying educational program. In most cases, you have to be enrolled as a full-time student. Your educational institution must complete Form T2202, Education Amount Certificate, or Form T2202A, Tuition and Education Amounts Certificate, for you to confirm the period you were enrolled in a qualifying program.

If you were enrolled in a qualifying program but could attend only part-time because of a mental or physical impairment, you still can claim the above amount. You have to complete Form T2202, Education Amount Certificate, to make your claim.

Under proposed changes, you can claim a $60-per-month education amount if you are studying in a part-time program that qualifies. Your educational institution must complete Form T2202 or Form T2202A for you.

You cannot claim more than one education amount for a particular month. Generally, you cannot claim the education amount for a program for which you received a reimbursement, benefit, grant, or allowance, or for a program related to your job if you received a salary or wages while studying. For more details, get the pamphlet called Students and Income Tax.

How to claim

Complete Schedule 11, Tuition and Education Amounts, to make your claim, and enter the result on line 323 of your return. You have to claim your tuition and education amounts, even if someone else paid your fees.

Tax Tip
If you do not need all of your tuition and education amounts to reduce your federal income tax to zero, you can transfer the unused part to your spouse (see line 326) or to your or your spouse's parent or grandparent (see line 324).

You may be able to claim all or part of your spouse's (see line 326) or other dependant's (see line 324) tuition and education amounts.

If you do not need all of your tuition and education amounts (and you do not transfer them to your spouse or to your or your spouse's parent or grandparent) in the year, you can carry forward the unused part and claim it in a future year. However, if you carry forward an amount, you will not be able to transfer it to anyone. Complete Schedule 11 to calculate the carry-forward amount.

Tax Tip
If you are transferring an amount to another person, do not transfer more than the person needs to reduce his or her federal income tax to zero, so you can carry forward more of your amounts to use in a future year.

Receipts - Do not include your receipts or forms (other than Schedule 11) with your paper return. If you are using EFILE (see "Filing your return" on page 11) show them to your EFILE service provider. In either case, keep them in case we ask to see them.

Line 324 - Tuition and education amounts transferred from a child

A student who does not need all of his or her 1998 tuition and education amounts to reduce his or her federal income tax to zero may be able to transfer the unused part to you if you are a parent or grandparent of the student or of the student's spouse. The maximum amount that can be transferred by each student is $5,000 minus the amount the student needs, even if there is still an unused part.

How to claim

The student has to complete Form T2202, Education Amount Certificate, or Form T2202A, Tuition and Education Amounts Certificate, to calculate the transfer amount and to designate you as the parent or grandparent who can claim it. If the tuition fees being transferred to you are not shown on the student's Form T2202 or T2202A, you should have a copy of the student's official tuition fees receipt.

Amounts claimed by student's spouse - If a student's spouse claims amounts on line 303 or 326 for the student, you cannot claim the tuition and education amounts transfer. However, the student can designate that the spouse claim the transfer on line 326.

No amounts claimed by student's spouse - If no amounts are claimed for the student by the student's spouse, or if the student does not have a spouse, the student can choose which parent or grandparent will claim the tuition and education amounts transfer. Only one person can claim the transfer from the student.

A change to the rules for this claim was made public after the 1997 guide went to print. Under this change, for 1997 and later years, the student can transfer an amount to a parent or grandparent, even if a different parent or grandparent claims the student as a dependant on line 305 or 306. If this change affects how you would have filed your 1997 return, you can ask us to correct it. See "How do you change a return?" on page 13 for details.

Receipts - Do not include the student's Schedule 11, forms, or official tuition fees receipt with your paper return. If you are using EFILE (see "Filing your return" on page 11) show them to your EFILE service provider. In either case, keep them in case we ask to see them.

Line 326 - Amounts transferred from your spouse

Your spouse (as defined on page 14) can transfer to you any part of the following amounts that he or she qualifies for but does not need to reduce his or her federal income tax to zero:

• the age amount (line 301) if your spouse was 65 or older;
• the pension income amount (line 314);
• the disability amount (line 316); and
• 1998 tuition and education amounts as designated by the student. The limit on the total of these amounts that can be transferred is $5,000 minus the amount your spouse needs, even if there is still an unused part.

Note
Your spouse cannot transfer any unused amounts to you if you were separated because of a breakdown in your relationship for a period of 90 days or more that included December 31, 1998.

Use Schedule 2 to calculate your claim. Attach a completed copy to your paper return. In the Identification area on page 1 of your return, be sure to show your marital status and your spouse's name and social insurance number.

Receipts - Attach to your paper return your spouse's Form T2201, Disability Tax Credit Certificate. If you were (or your spouse was) allowed a disability amount in a previous year for your spouse's condition, and your spouse still met the eligibility requirements in 1998, you can claim the disability amount without sending us another Form T2201. However, you have to send us a new one if the period stated on the certificate ended in 1997 or earlier.

Do not include with your paper return any receipts or forms (other than your own Schedule 2) for your spouse's tuition or education amounts. If you are using EFILE (see "Filing your return" on page 11) show them to your EFILE service provider. In either case, keep them in case we ask to see them.

Line 330 - Medical expenses

You can claim medical expenses that were paid for any of the following persons:

• yourself;
• your spouse;
• your or your spouse's child or grandchild who was dependent on you for support; and
• your or your spouse's parent, grandparent, brother, sister, uncle, aunt, niece, or nephew who lived in Canada at any time in the year and depended on you for support.

Notes
Under proposed changes, if you claim medical expenses for a dependant (other than your spouse) whose net income is more than $6,956, you have to reduce your claim. See line 331 for details.

In addition, there is a refundable tax credit for working individuals with low incomes and high medical expenses. See line 452 for details.

You can claim medical expenses paid in any 12-month period ending in 1998 and not claimed in 1997. Generally, you can claim all amounts paid, even if they were not paid in Canada. Your total expenses have to be more than either $1,614 or 3% of your net income (line 236) whichever is less.

For more information on medical expenses, get Interpretation Bulletin IT-519, Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction.

Allowable medical expenses

The most common medical expenses you can claim are:

• payments to a doctor, dentist, nurse, or public or licensed private hospital;
• payments for artificial limbs, wheelchairs, crutches, hearing aids, prescription eyeglasses or contact lenses, dentures, pacemakers, prescription drugs, and certain prescription medical devices;
• expenses for guide and hearing-ear dogs; and
• premiums paid under the Quebec Medical Insurance Plan, and most premiums paid to private health services plans.

Under proposed changes, you can claim amounts paid for you or a relative to learn to care for a relative who has a mental or physical infirmity and who is in your household or is dependent on you for support.

For more examples of allowable medical expenses, call our T.I.P.S. (Info-Tax) service. See the T.I.P.S. information on page 7.

Travel expenses - If medical treatment is not available locally, you may be able to claim the cost of travelling to get the treatment somewhere else.

Reimbursement of an allowable expense - You cannot claim the part of an expense for which you have been or can be reimbursed. However, you can claim all of the expense if the reimbursement is included in your income, such as a benefit shown on a T4 slip, and you did not deduct the reimbursement anywhere else on your return.

Example
Guy was in the hospital while on a business trip to Mexico. He paid $2,800 in Canadian dollars for allowable medical expenses, which are generally not limited to those paid in Canada. He was reimbursed for $1,500 of these expenses by his employer's health care plan. This was included on his T4 slip. Therefore, Guy can claim the full $2,800.

Care by an attendant, or care in a nursing home, school, institution, or other establishment

You may have paid for care by an attendant or care in an establishment for a person (including yourself) for whom you are claiming medical expenses. If so, you can make one of the following claims:

• If the person has a letter from a doctor or other medical practitioner certifying the person's dependence on others for care due to long-term mental or physical infirmity, you can claim amounts paid for full-time care at home by an attendant who was not your spouse and was 18 years of age or older when the amounts were paid.
• If the person has a letter from a doctor or other medical practitioner certifying the person's dependence on others for care due to lack of normal mental capacity, you can claim amounts paid for full-time care in a nursing home.
• If the person has a letter from a doctor or other appropriately qualified individual certifying the person's need, due to a physical or mental handicap (including any resulting behavioural problems and learning disabilities) for the equipment, facilities, or personnel available in a nursing home, school, institution, or other establishment operated for persons with that handicap, you can claim amounts paid for full- or part-time care (including training) in that establishment.

Note
If the person qualifies for the disability amount (see line 316) Form T2201, Disability Tax Credit Certificate, can be used in place of a letter for any of the above claims.

Persons who qualify for the disability amount (line 316)

A doctor, an optometrist (for sight impairments) or an audiologist (for hearing impairments) may certify that a person has a severe and prolonged mental or physical impairment that markedly restricts any of the person's basic activities of daily living. If the doctor, optometrist, or audiologist has completed Form T2201, Disability Tax Credit Certificate, for the person, and the form has been submitted to us, you can make one of the following claims, but not both (compare them to find out which is better):

• You can claim all amounts you or your spouse paid for the person for full-time care by an attendant who was not your spouse and was 18 years of age or older when the amounts were paid, or for full-time care in a nursing home. If anyone makes this claim for that person, neither you nor anyone else can claim the disability amount (line 316 or 318) for that person.
• You can claim $10,000 ($20,000 in the year of death) or less that you or your spouse paid for the person for full- or part-time care by an attendant in Canada who was not your spouse and was 18 years of age or older when the amounts were paid, and also claim the disability amount (line 316 or 318) for that person. You cannot make this claim if anyone claims child care expenses (line 214), attendant care expenses (line 215), or any amount for care by an attendant, or care in a nursing home, school, institution, or other establishment as a medical expense (line 330) for that person.

Under proposed changes, after February 24, 1998, a psychologist can certify an impairment regarding the ability to perceive, think, and remember. An occupational therapist can certify an individual's impairment regarding the ability to dress and feed himself or herself, or to walk.

How to claim

Calculate your allowable medical expenses as follows:

• Choose the 12-month period ending in 1998 for which you will claim medical expenses. You cannot include any expenses you deducted on your 1997 return.
• Add up your allowable medical expenses for that period, and enter the total on line 330.
• Subtract $1,614 or 3% of your net income (line 236) whichever is less.
• Compare your credit with the credit your spouse would be allowed. It may be better for the spouse with the lower income to claim the allowable medical expenses. You can make whichever claim you prefer.

The following example shows how to calculate your claim.

Example
Carol and her husband have no dependants. She has reviewed their medical bills and decided that the 12-month period ending in 1998 for which she will calculate their claim is July 1, 1997, through June 30, 1998. The total of their allowable expenses for that period is $1,842, which she enters on line 330.

Her net income on line 236 of her return is $32,000. She calculates 3% of that amount as $960. Because the result is less than $1,614, she enters $960 on the line below line 330, and subtracts it from $1,842. The difference is $882, which is the amount of the credit she could claim at line 332.

Carol's husband's net income is $48,000. When she calculates the credit that he would be allowed if he made the claim instead, she finds that he would be allowed only $402. In this case, Carol has found that it is better for her to claim the expenses.

Receipts - Attach your receipts to your paper return. Keep your health services plan premium receipts in case we ask to see them. Receipts for attendant care paid to an individual should show the individual's name and social insurance number. If you are using EFILE (see "Filing your return" on page 11) show all your receipts to your EFILE service provider, and keep them in case we ask to see them.

For claims where it is required, also attach a properly completed and certified Form T2201, unless a disability amount was allowed for the person in a previous year and the person still met the eligibility requirements in 1998.

Line 331 - Medical expenses adjustment

If you claimed medical expenses for a dependant, other than your spouse, whose net income was more than $6,956, you have to reduce your medical expenses.

Under proposed changes, to calculate the adjustment, subtract $6,956 from the 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. Multiply the result by 4. Complete this calculation for each such dependant. Enter on line 331 of your return the total of the amounts you calculated.

Tax Tip
If the medical expenses adjustment you calculate for a dependant is more than the medical expenses you claimed for that dependant, it is not to your benefit to claim the medical expenses for that dependant.

Line 335

If the amount on line 335 equals, or is more than, the amount on line 260, and is less than $29,591, enter "0" on line 420, and complete the rest of your return. In any other case, see line 338.

Line 338

To calculate your non-refundable tax credits, multiply the amount on line 335 by 17%. If you are not claiming charitable donations or cultural or ecological gifts, enter the amount from line 338 on line 350 and go to "Federal tax calculation" on page 42.

Line 349 - Donations and gifts

Enter your claim from the calculation on Schedule 9, which includes lines 340 (Allowable charitable donations and government gifts) and 342 (Cultural and ecological gifts).

Your federal tax credit is 17% of the first $200 of your donations and gifts, and 29% of the balance. A credit for these donations and gifts can also reduce your provincial or territorial tax, as well as any federal, provincial, or territorial surtaxes. Quebec residents claim provincial tax credits on their provincial returns.

Allowable charitable donations and government gifts

Maximum you can claim

You can claim whichever of the following is less:

• You can claim the total donations made in 1998 of cash or other property (see the pamphlet called Gifts and Income Tax for details) plus any donations made in any of the previous five years that you did not claim before. Remember to report any capital gain or loss on the donated property, as well as any recapture of capital cost allowance that may apply.
• The above amount includes unclaimed gifts to Canada, a province, or a territory made after February 18, 1997, other than those agreed to in writing before February 19, 1997. Include unclaimed gifts to Canada, a province, or a territory made before February 19, 1997, (or agreed to in writing before then if they were made after February 18, 1997) with your claim for "Cultural and ecological gifts" (see page 41).

Note
Gifts to Canada, a province, or a territory do not include contributions to political parties. See lines 409 and 410 for information about donations to federal political parties. See the provincial or territorial forms in your forms booklet to find out if you can claim a credit for contributions to a provincial or territorial political party.

• You can claim 75% of your net income (line 236). If you donated capital property (including depreciable property) you may be able to increase this limit. For more information, get the pamphlet called Gifts and Income Tax. For the year a person dies and the year before that, this limit is 100% of the person's net income.

Tax Tip
You can claim donations that your spouse made as long as your spouse does not claim them.

Notes
If you have taken a vow of perpetual poverty as a member of a religious order, claim your deduction on line 256 of your return.

Be sure not to claim, on your 1998 return, donations you made in January of 1998 that you claimed on your 1997 return.

Qualified donees

You can claim only amounts you gave to Canadian registered charities and other qualified donees. For a list of the types of donees that qualify, get the pamphlet called Gifts and Income Tax, or call our T.I.P.S. (Info-Tax) service. See the T.I.P.S. information on page 7.

Note
You may want to make a monetary gift directly to the federal Debt Servicing and Reduction Account. If so, make it payable to the Receiver General and send it to: Place du Portage, Phase III, 11 Laurier Street, Hull QC K1A 0S5, with a note asking that we apply it to this account. Public Works and Government Services Canada will send you a tax receipt. All such gifts will be used only to service the public debt.

Donations of non-qualifying securities

If you made a charitable donation of a non-qualifying security, you may not be able to claim a credit for the donation. For details, get the pamphlet called Gifts and Income Tax.

Donations to U.S. charities

If you have U.S. income, you can claim any donations to U.S. charities that would be allowed on a U.S. return. You can claim up to 75% of the net U.S. income you report on your Canadian return. However, if you lived near the border in Canada throughout the year and commuted to a workplace or business in the U.S. that was your main source of income for the year, you can include your U.S. donations up to the same limits discussed under "Maximum you can claim" on page 41.

Carrying forward donations

You do not have to claim on your 1998 return the charitable donations you made in 1998. You can carry them forward for up to five years, as long as you claim them only once.

Cultural and ecological gifts

Enter the total of the following three amounts:

• unclaimed gifts to Canada, a province, or a territory made before February 19, 1997, or agreed to in writing before then if they were made after February 18, 1997;
• the value of cultural property, certified by the Canadian Cultural Property Export Review Board, that you gave to a designated institution in Canada. Attach to your paper return both the official receipt and Form T871, Cultural Property Income Tax Certificate, for each gift; and
• the value of land you donated after February 27, 1995, to Canada, a province or a Canadian municipality, or to a registered charity the Minister of the Environment has approved. The Minister of the Environment has to certify the land to be important to the preservation of Canada's environmental heritage, and issue a Certificate for Donation of Ecologically Sensitive Land. Attach to your paper return both the official receipt and the certificate.
• If you donated a restriction (servitude, easement, or covenant) in respect of such land, the amount of the donation will be either the fair market value (FMV) of the restriction, or the reduction of the land's FMV caused by the restriction, whichever is more.

You have to report any capital gain or loss on property that you donated. For details, see the guide called Capital Gains.

Unlike other donations, your claim for these types of gifts is not limited to the percentage specified for charitable donations and government gifts. You can choose the part of your donations you want to claim in 1998, and carry forward any unused part for up to five years. For more information, get the pamphlet called Gifts and Income Tax.

How to claim

Complete Schedule 9, Donations and Gifts, to make your claim. Enter the result on line 349.

Receipts - Attach to your paper return Schedule 9 and your official receipts, showing either your name or your spouse's name. You do not have to attach receipts for amounts shown in box 46 of your T4 or T4A slips, in box 36 of your T3 slips, in box 34 of your T5013 slips, or on financial statements showing an amount a partnership allocated to you. If you are using EFILE (see "Filing your return" on page 11) show your documents to your EFILE service provider, and keep them in case we ask to see them.

You may have included with a previous return a receipt for a donation you are claiming for 1998. If so, attach a note indicating the return with which you submitted the receipt.

We will not accept as proof of payment cancelled cheques, photocopies (unless the issuer certifies them to be true copies), credit card slips, pledge forms, or stubs. If you need more details on donations and gifts, get Interpretation Bulletin IT-110, Gifts and Official Donation Receipts.