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ARCHIVED - 1997 General Income Tax Guide

Identification

It is important that you complete the entire identification area of your return. We need this information to calculate your goods and services tax/harmonized sales tax (GST/HST) credit, and any benefit to which you may be entitled under the Child Tax Benefit Program. If you provide incomplete or incorrect information, the processing of your return, and any refund, credit, or benefit to which you may be entitled, will be delayed.

Label - If you have a personalized label, attach it to your return. If your name, your address, your social insurance number (SIN), or your spouse's SIN is incorrect, put a line through the wrong information, and print your changes clearly on the label.

We work closely with Canada Post to keep our postage costs down, while still making sure you get the mail that we send you as quickly as possible. As a result, when we process your income tax return, we may have to modify part of your address to meet Canada Post's requirements. Therefore, the address on your tax package, Notice of Assessment, or any other correspondence we send you may be different from the one you indicated on your return.

Spouse - The term spouse used throughout this guide applies to a legally married spouse and a common-law spouse. A common-law spouse is a person of the opposite sex who, at that particular time in 1997, lived with you in a common-law relationship, and either:

• had been living with you in such a relationship for at least 12 continuous months, or had previously lived with you in such a relationship for at least 12 continuous months (when you calculate the 12 continuous months, include any period of separation of less than 90 days); or
• is the natural or adoptive parent (legal or in fact) of your child.

Once either of these two situations applies, we consider you to have a common-law spouse, except for any period that you were separated for 90 days or more because of a breakdown in the relationship.

Example 1
On May 1, 1994, Bruce and Brenda, who have no children, began to live together in a common-law relationship. On July 15, 1996, they separated because of a breakdown in their relationship. On February 27, 1997, they began to live together again. We consider Bruce and Brenda to be spouses as of February 27, 1997, the date they reconciled. This is because they once lived together in a common-law relationship for 12 continuous months.

Example 2
Hans and Sandra, who have no children, have been living together in a common-law relationship since April 13, 1996. However, for the months of July 1996 and October 1996, they lived apart because of a breakdown in their relationship. We consider Hans and Sandra to be spouses as of April 13, 1997. When calculating the 12 continuous months requirement, they have to include the two months they lived apart because each period of separation was less than 90 days.

Province or territory of residence - Enter the province or territory where you lived or of which you were considered to be a factual resident on December 31, 1997. For details, see "Which tax package should you use?" on page 6.

Self-employed - If you were self-employed in 1997, enter the province or territory where you had a permanent business establishment.

Elections Canada

On page 1 of your return, you can authorize us to give certain information to Elections Canada to help maintain the National Register of Electors. See page 4 of this guide for more information.

Goods and services tax/harmonized sales tax (GST/HST) credit application

In Newfoundland, Nova Scotia, and New Brunswick, provincial sales taxes have been harmonized with the GST, resulting in the HST. You can only receive the GST/HST credit if you apply for it each year, even if you received it in the previous year. To apply for the payments, you have to complete this area on page 1 of your 1997 tax return. Your credit is based on the information provided on your return and, if applicable, your spouse's return (see the definition of "spouse" on page 10). If you qualify, you will receive the payments in July and October of 1998, and January and April of 1999.

Before you complete this area on your return, be sure to read all of the information in this section. If you apply, we will let you know in July of 1998 the amount to which you are entitled, if any, and how we calculated your credit.

Note
To be eligible to receive a GST/HST credit for a particular month, you have to be resident in Canada at the beginning of that month.

Who can apply?

You can apply for the GST/HST credit if, at the end of 1997, you were a resident of Canada and you:

• were 19 years of age or older;
• had a spouse; or
• were a parent.

Note
If you have a spouse, only one of you can apply for the credit. No matter which one of you applies, the credit will be the same.

Who cannot apply?

You cannot apply for the GST/HST credit if, at the end of 1997, you either:

• were confined to a prison or a similar institution, and had been there for more than six months during 1997; or
• did not have to pay tax in Canada because you were an officer or servant of another country, such as a diplomat, or a family member or an employee of that diplomat.

Note
You cannot claim the credit for your spouse or child who met either of these conditions at the end of 1997.

Number of children

You can claim a GST/HST credit for each of your children who, at the end of 1997:

• was under 19 years of age;
• did not have a spouse;
• was not a parent; and
• either lived with you, or was claimed as a dependant (line 305 or 306) only by you or your spouse.

Only one person can claim a GST/HST credit for a particular child.

Net income of spouse

Your spouse's net income is the amount from line 236 of your spouse's return, or the amount that would be your spouse's net income if your spouse completed a return.

Income limit

In the chart that follows, look up the number of children you have. If your net family income is less than the income limit shown across from the number of your children, you may be entitled to receive the credit. Your net family income is the total of your net income and, if applicable, your spouse's net income.

Note
These income limits are only guidelines to help you decide if you should apply for the credit. If you apply, we will send you a notice by the end of July 1998 to let you know the amount to which you are entitled, if any.

Calculating your GST/HST credit

To find out how to calculate your GST/HST credit, call our T.I.P.S. ( Info-Tax ) service. See the T.I.P.S. information in the forms booklet.

We may apply your GST/HST credit against certain outstanding government debts, such as Canada Student Loans, Employment Insurance benefit overpayments, Immigration loans, and training allowance overpayments. We may also apply it to satisfy a garnishment order under the Family Orders and Agreements Enforcement Assistance Act.

Reporting foreign income

As a Canadian resident, you have to report your income from all sources, both inside and outside Canada.

You have to report in 1998 certain dealings you had with non-resident trusts in 1996 or 1997.

Loans and transfers to non-resident trusts

Special Notice

After 1995, you may have loaned or transferred funds or property to a non-resident trust. If so, you have to complete and file Form T1141, Information Return in Respect of Transfers or Loans to a Non-resident Trust. For more information, see Form T1141. You do not have to file this form for the year you immigrated to Canada.

Due dates for Form T1141 - For non-resident trusts to which you loaned or transferred funds or property in 1996, you have to file Form T1141 on or before April 30, 1998. For 1997, the deadline for filing it is the same as for your 1997 tax return (see "What date is your 1997 return due?" on page 8). File it separately from your tax return.

Penalties - There are substantial penalties for failing to complete and file Form T1141 by the due date.

Beneficiaries of non-resident trusts

After 1995, you may have received funds or property from, or been indebted to, a non-resident trust in which you had or will have absolute or conditional rights as a beneficiary, either directly or indirectly. If so, you have to complete and file Form T1142, Information Return in Respect of Distributions From and Indebtedness to a Non-resident Trust. For more information, see Form T1142. You do not have to file this form for the year you immigrated to Canada.

Due dates for Form T1142 - For non-resident trusts from which you received funds or property (or to which you were indebted) in 1996, you have to file Form T1142 on or before April 30, 1998. For 1997, the deadline for filing it is the same as for your 1997 tax return (see "What date is your 1997 return due?" on page 8). File it separately from your tax return.

Penalties - There are substantial penalties for failing to complete and file Form T1142 by the due date.

Ownership of foreign property

Under proposed changes, you will only have to begin reporting in 1999 certain foreign property you owned in 1998. You will not have to report any foreign property you owned in 1996 or 1997.

Date modified:

2002-02-04