Table of Contents

• Form NS428, Nova Scotia Tax
• Step 1 - Nova Scotia tax on taxable income
• Step 2 - Nova Scotia non-refundable tax credits
• Step 3 - Nova Scotia tax
• Step 4 - Nova Scotia low-income tax reduction
• Form NS479, Nova Scotia Credits

The information in this section will help you complete Form NS428, Nova Scotia Tax, and Form NS479, Nova Scotia Credits.

The terms spouse and common-law partner are defined on page 12 in the General Income Tax and Benefit Guide.

The term end of the year means December 31, 2001, the date you left Canada if you emigrated in 2001, or the date of death for a person who died in 2001.

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

Form NS428, Nova Scotia Tax

Complete Form NS428 if you were a resident of Nova Scotia at the end of the year.

If you had income from a business with a permanent establishment outside Nova Scotia, complete Form T2203, Provincial and Territorial Taxes for 2001 - Multiple Jurisdictions, before you complete Form NS428.

You also have to complete Form NS428 if you were a non-resident of Canada in 2001 and you earned income from employment in Nova Scotia, or received income from a business with a permanent establishment only in Nova Scotia.

Step 1 - Nova Scotia tax on taxable income

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

Step 2 - Nova Scotia non-refundable tax credits

Nova Scotia now has its own non-refundable tax credits. These credits reduce the amount of provincial tax you owe. However, if the total of these credits is more than the amount of provincial tax you owe, you will not get a refund for the difference.

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

To calculate many of the non-refundable tax credits, you will need to use the new Provincial Worksheet in this book.

Newcomers to Canada and emigrants

If you prorated any of the amounts you claimed on lines 300 to 306, 315, and line 316 of your federal Schedule 1, you are required to perform the same pro-ration on the corresponding provincial amounts at lines 5804 to 5820, 5840, and line 5844.

Line 5804 - Basic personal amount

Claim the basic personal amount of $7,231.

Line 5808 - Age amount

You can claim this amount if you were 65 or older on December 31, 2001, and your net income (line 236 of your return) is less than $49,824.

If your net income is:

• $26,284 or less, enter $3,531 on line 5808; or
• more than $26,284 but less than $49,824, complete the chart for line 5808 on the Provincial Worksheet in this book to calculate your claim.

Line 5812 - Spouse or common-law partner amount

You can claim this amount if you met the rules for claiming it on line 303 of federal Schedule 1 and your spouse or common-law partner's net income (line 236 of his or her return, or the amount that it would be if he or she filed a return) is less than $6,754.

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

• $614 or less, enter $6,140 on line 5812; or
• more than $614 but less than $6,754, complete the calculation to determine your claim and enter the result on line 5812.

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

Line 5816 - Amount for an eligible dependant

You can claim this amount if you met the rules for claiming it on line 305 of federal Schedule 1, and your dependant's net income (line 236 of his or her return, or the amount that it would be if he or she filed a return) is less than $6,754.

If your dependant's net income is:

• $614 or less, enter $6,140 on line 5816; or
• more than $614 but less than $6,754, complete the chart for line 5816 on the Provincial Worksheet in this book to calculate your claim.

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

Line 5820 - Amount for infirm dependants age 18 or older

You can claim this amount if you met the rules for claiming it on line 306 of federal Schedule 1 and your dependant's net income (line 236 of his or her return, or the amount that it would be if he or she filed a return) is less than $7,231.

Complete the chart for line 5820 on the Provincial Worksheet in this book to calculate your claim.

Line 5824 - Canada Pension Plan or Quebec Pension Plan contributions through employment

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

Line 5828 - Canada Pension Plan or Quebec Pension Plan contributions on self-employment and other earnings

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

Line 5832 - Employment Insurance premiums

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

Line 5836 - Pension income amount

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

Line 5840 - Caregiver amount

You can claim this amount if you met the rules for claiming it on line 315 of federal Schedule 1 and your dependant's net income (line 236 of his or her return, or the amount that it would be if he or she filed a return) is less than $14,047.

Complete the chart for line 5840 on the Provincial Worksheet in this book to calculate your claim.

Line 5844 - Disability amount

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

• If you were 18 or over at the end of the year, enter $4,293 on line 5844.
• If you were under 18 at the end of the year, complete the chart for line 5844 on the Provincial Worksheet in this book to calculate your claim.

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

You can claim this amount if you met the rules for claiming it on line 318 of federal Schedule 1. Complete the chart for line 5848 on the Provincial Worksheet in this book to calculate your claim.

Line 5852 - Interest paid on your student loans

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

Line 5856 - Tuition and education amounts

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

Complete Part 1 of Schedule NS(S11), Provincial Tuition and Education Amounts, to calculate your claim.

Receipts - If you are filing a paper return, attach the completed Schedule NS(S11), but not your receipts or other forms. Keep them in case we ask to see them. If you are filing electronically, keep all of your documents.

Transferring and carrying forward amounts

You may not need all of your 2001 tuition and education amounts to reduce your provincial income tax to zero. In this case, you may transfer all or part of the unused portion to one person, either your spouse or common-law partner (who would claim it on line 5864), your parent or grandparent, or your spouse or common-law partner's parent or grandparent (who would claim it on line 5860).

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

Complete Part 2 of Schedule NS(S11) to calculate the provincial amount available to transfer, as well as the back of Form T2202, Education Amount Certificate, or T2202A, Tuition and Education Amounts Certificate, to designate who can claim it and the amount the person can claim. This amount may be different from the amount claimed federally by that same person.

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

You can carry forward and claim in a future year the part of your tuition and education amounts you do not need to use (and do not transfer) for the year. Complete Part 3 of Schedule NS(S11) to calculate the amount you can carry forward.

Line 5860 - Tuition and education amounts transferred from a child

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

Enter, on line 5860, the total of all provincial amounts transferred to you that each student designated on the back of his or her Form T2202 or T2202A and on line 20 of his or her Schedule NS(S11). The student may choose to transfer an amount that is less than the provincial amount allowable calculated in Part 2 of his or her Schedule NS(S11).

Note
The student cannot transfer to you any unused tuition and education amounts carried forward from a previous year, but only those from 2001.

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

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

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

You can claim these amounts if you met the rules for claiming them on line 326 of federal Schedule 1. Complete Schedule NS(S2), Provincial Amounts Transferred From Your Spouse or Common-law Partner, to calculate your claim.

Receipts - Do not include any receipts or forms [other than your own Schedule NS(S2)] for your spouse or common-law partner, but keep them in case we ask to see them. If you are filing electronically, keep all of your documents.

Line 5868 - Medical expenses

The allowable medical expenses you can claim on line 5868 are the same as those you can claim on line 330 of your federal Schedule 1. The medical expenses you claim have to cover the same 12-month period ending in 2001, and have not been claimed in 2000. They have to be more than either 3% of your net income (line 236 of your return) or $1,637, whichever is less.

Note
If the total of expenses claimed is more than $1,637 but less than $1,678, it is important that you enter the amount on line 5868 and on line 330 of your federal Schedule 1.

Line 5872 - Medical expenses adjustment

If you claimed, on line 5868, medical expenses for a dependant, other than your spouse or common-law partner, whose 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 $7,231, complete the chart for line 5872 on the Provincial Worksheet in this book to calculate your adjustment.

Tax Tip
Provincially, the medical expenses adjustment that you calculate will be less than the amount you calculated federally. If that is the case, and the adjustment you calculate is less than the medical expenses for that dependant, it will be to your benefit to include these expenses at line 5868.

Line 5896 - Donations and gifts

To calculate your claim for line 5896, enter the amounts from lines 345 and 347 of federal Schedule 9 and multiply them by the rates on lines 33 and 34 of Form NS428.

Step 3 - Nova Scotia tax

Line 38 - Nova Scotia tax on split income

If you have to pay federal tax on split income on line 424 of your federal Schedule 1, complete Part 2 of Form T1206, Tax on Split Income, to calculate the provincial tax that applies to this income. Form T1206 also contains a special rule that applies to the amount you enter on line 428 of your return. You can find information about tax on split income on page 14 of the General Income Tax and Benefit Guide.

Line 46 - Nova Scotia additional tax for minimum tax purposes

If you have to pay minimum tax as calculated on Form T691, Alternative Minimum Tax, you will also have to determine your Nova Scotia additional tax for minimum tax purposes. To do this, complete Form T1219, Provincial Alternative Minimum Tax, and enter the calculated amount on line 46 of Form NS428. You can find information about minimum tax on page 30 of the General Income Tax and Benefit Guide.

Step 4 - Nova Scotia low-income tax reduction

You can claim this tax reduction if you were a resident of Nova Scotia on December 31, 2001, and any of the following conditions applied to you:

• you were 19 years of age or older;
• you had a spouse or common-law partner; or
• you were a parent.

If you had a spouse or common-law partner on December 31, 2001, you and your spouse or common-law partner must decide who will claim the tax reduction. Only one of you can make this claim for your family.

You cannot claim the tax reduction if, on December 31, 2001, you were confined to a prison or a similar institution and had been there for a total of more than six months during 2001.

Do not claim the tax reduction for a person who died
in 2001.

Line 52 - Basic reduction

Claim $300 for yourself.

Line 53 - Reduction for spouse or common-law partner

Claim $300 if you had a spouse or common-law partner on December 31, 2001.

Line 54 - Reduction for an eligible dependant

Claim $300 if you claimed an amount on line 305 of federal Schedule 1 or line 5816 on Form NS428.

Line 55 - Reduction for dependent children born in 1983 or later

Enter at box 6099 the number of dependent children you have who were born in 1983 or later.

Do not include a child for whom you claimed the reduction for an eligible dependant on line 54 of the form.

Claim $165 for each of these dependants.

Only one person can claim the tax reduction for a child.

Who is a dependent child?

A dependent child is one who, on December 31, 2001, met all of the following conditions:

• was 18 years of age or younger;
• did not have a spouse or common-law partner;
• was not a parent; and
• either lived with you, or was claimed as a dependant only by you or your spouse or common-law partner.

Line 59 - Net family income

Your net family income is the total of your net income (line 236 of your return) and, if you had a spouse or common-law partner on December 31, 2001, your spouse or common-law partner's income (line 236 of his or her return).

Your spouse or common-law partner's net income is the amount from line 236 of his or her return, or the amount that would appear on line 236 if he or she completed a return.

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

Form NS479, Nova Scotia Credits

Lines 1 and 2 - Nova Scotia political contribution tax credit

You can deduct part of the contributions you made in 2001 to recognized Nova Scotia political parties, or to candidates seeking election in the Nova Scotia House of Assembly.

How to claim

Enter your total contributions on line 1 of Form NS479.

Determine the amount to enter on line 2 as follows:

• For contributions of less than $1,150, complete the chart for line 2 on the Provincial Worksheet in this book.
• For contributions of more than $1,150, enter $500 on line 2 of Form NS479.

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

Line 3 - Labour-sponsored venture-capital tax credit

You can claim a credit equal to 15% of your investment in eligible shares you acquired in 2001 (that you did not claim on your 2000 return), or in the first 60 days of 2002. If an RRSP for spouse or common-law partner became the first registered holder of the share, either the RRSP contributor or the annuitant may claim this credit for that share.

Enter on Form NS479, the cost of your shares shown on Form NSLSV, Nova Scotia Labour-Sponsored Venture-Capital Tax Credit, issued by the relevant labour-sponsored venture-capital corporation.

On line 3 of Form NS479, calculate and enter your credit to a maximum of $525.

Receipts - Attach Form NSLSV to your paper return. If you are filing electronically, keep it in case we ask to see it.

Lines 7 to 13 - Equity tax credit

You can claim this credit for investments in eligible shares you acquired in 2001 (that you did not claim on your 2000 return) or in the first 60 days of 2002.

Enter on line 7 of Form NS479 the credit shown on Form NSETC-1, Nova Scotia Equity Tax Credit, issued by the Nova Scotia Department of Finance.

You can carry forward unused Nova Scotia equity tax credits for seven years, or back three years. Any unused equity tax credit is shown on your most recent Notice of Assessment or Notice of Reassessment.

On line 8 of Form NS479, enter any unused credit from previous years that you want to use to reduce your Nova Scotia tax for 2001.

Complete the chart for lines 14 to 16 on the Provincial Worksheet to calculate any unused credit available to carry back to previous years. Enter the amount you want to apply against your prior-year Nova Scotia tax on lines 14, 15, and 16, whichever applies, on Form NS479.

Receipts - Attach Form NSETC-1 to your paper return. If you are filing electronically, keep it in case we ask to see it.

Lines 17 to 20 - Nova Scotia home ownership savings plan (NSHOSP) tax credit

To claim this credit, you must have been a resident of Nova Scotia on December 31, 2001.

Eligible contributions are amounts you deposited in 2001 (that you did not claim on your 2000 return), or in the first 60 days of 2002, into a Nova Scotia Home Ownership Savings Plan that was opened before January 1, 2001, with an approved financial institution. If you had a spouse or common-law partner on December 31, 2001, you and your spouse or common-law partner must decide who will claim this credit, since only one of you can make the claim.

For more information on the Nova Scotia Home Ownership Savings Plan, contact your financial institution.

Receipts - Attach official receipts from your financial institution to your paper return. If you are filing electronically, keep all of your documents in case we ask to see them.

Table of NSHOSP tax credit rates

Look up the amount on line 17 of Form NS479, Nova Scotia Credits, to determine your NSHOSP tax credit rate below.