Description of items

• Items 1 to 3
• Income items
• Deduction items

Items 1 to 3

• Item 1: Number of taxable returns
  This item refers to the number of returns filed for the 2004 tax year with at least $2 in federal or provincial tax payable.
  
  
• Item 2: Number of non-taxable returns
  This item refers to returns with federal or provincial tax payable of less than $2.
  
  
• Item 3: Total number of returns
  This item is the total of Items 1 and 2.

Income items

• Employment income
• Pension income
• Income from other sources
• Income from self-employment
• Miscellaneous income
• Total income assessed, non-taxable components, and other comments

Employment income

• Item 4: Employment income before deductions - Line 101 of the return, less commissions
  This item refers to income from wages and salaries, taxable allowances and benefits, and bonuses and directors' fees.
  
  
• Item 5: Commissions - Line 102 of the return
  This item refers to income an employee received based on a percentage of sales. Some people may be paid by commission only, while others may receive a fixed salary as well as a percentage of sales.
  
  
• Item 6: Other employment income - Line 104 of the return
  This item includes tips and gratuities, shareholders' loans, amounts received under a supplementary unemployment benefit plan, and benefits received from income-maintenance insurance plans. Net research grants may also be included either here or on Line 130 of the return.

Pension income

• Item 7: Old Age Security - Line 113 of the return
  This amount comes from the Old Age Security pension plan. People 65 years of age or over receive an annual total of $5,375.76.
  
  
• Item 8: Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) benefits - Line 114 of the return
  This item includes death and disability benefits.
  
  
• Item 9: Other pensions or superannuation - Line 115 of the return
  In addition to income from registered pension plans, this item includes income from registered retirement income funds, deferred profit-sharing plans, and foreign pensions.

Income from other sources

• Item 10: Employment Insurance benefits - Line 119 of the return
  This amount comes from the Employment Insurance Plan.
  
  
• Item 11: Taxable amount of dividends from taxable Canadian corporations - Line 120 of the return
  This amount is the total dividend value, plus a 25% gross-up. A dividend tax credit is also available. Please see Item 60 for more information.
  
  
• Item 12: Investment income - Line 121 of the return
  This is the total of: bond, bank, and mortgage interest; income from trusts; and foreign income.
  
  
• Item 13: Annuity income
  This item includes the taxable portion of annuity income as well as annuity payments from a registered retirement savings plan (RRSP).
  
  
• Item 14: Net rental income - Line 126 of the return
  This item is the rental income after expenses. Income from multiple-unit residential buildings (MURBS) is included in Item 23: Other income.
  
  
• Item 15: Taxable capital gains - Line 127 of the return
  This amount represents line 199 of Schedule 3, which is 50% of the gains realized in 2004 as reported on line 127 of the return.
  
  
• Item 16: RRSP income - Line 129 of the return
  This item refers to income from an RRSP (registered retirement savings plan), less annuity payments.

Income from self-employment

Self-employment income presented here corresponds to net income, i.e., the gross income, less any adjustments and expenses incurred.

• Item 17: Net business income - Line 135 of the return
  This item is the income from privately owned businesses and partnerships.
  
  
• Item 18: Net professional income - Line 137 of the return
  Item 18 refers only to income from independent practice, such as earnings by self-employed accountants, doctors, dentists, and lawyers. However, when a professionally qualified person is employed by a company, government, or institution, this individual's income is included in Item 4: Employment income before deductions.
  
  
• Item 19: Net commission income - Line 139 of the return
  This item shows net commission income for self-employed people -- such as real estate agents -- who are working in sales and earning commissions.
  
  
• Item 20: Net farming income - Line 141 of the return
  Self-employed beekeepers and farmers, including tree farmers, report their income on this line.
  
  
• Item 21: Net fishing income - Line 143 of the return
  This item shows the income of boat owners and boat renters who generate income from fishing.
  
  
• Item 22: Tax-exempt income - Line 147 of the return
  This refers to the total of the following types of income:
  • workers' compensation payments (line 144 of the return)
  • social assistance payments (line 145)
  • net federal supplements (line 146).

Note: A deduction may be claimed for the sum of these items at line 250 of the return.

Miscellaneous income

• Item 23: Other income - Line 130 of the return
  This item contains the following incomes reported on line 130 of the return:
  • supplementary employment plan benefits
  • annuities from income-averaging annuity contracts
  • training allowances
  • scholarships (less $500)
  • fellowships (less $500)
  • artists' project grants (less $500)
  • net research grants (can also be reported on line 104)
  • bursaries and prizes for achievement, except prizes recognized by the general public and awarded for meritorious achievement in the arts, sciences or service to the public (less $500)
  • disability income or benefits
  • miscellaneous fees
  • wage-loss replacement plans (can also be reported on line 104)
  • retiring allowances
  • lump-sum payments from pensions and deferred profit-sharing plans
  • registered education savings plan income
  • resources income, net of Canadian exploration or development expenses
  • death benefits other than CPP or QPP death benefits
  • other income not reported elsewhere.

For our purposes, we also add the following incomes:

• net partnership income (limited or non-active partners) (line 122 of the return)
• support payments received (alimony, separation allowances, or child support (line 128).

Total income assessed, non-taxable components, and other comments

• Item 24: Total income assessed - Line 150 of the return or the total of Items 4 to 23
  This item contains the amount reported on line 150 of the return or the total of Items 4 to 23. However, this item doesn't include non-taxable income from the following:
  • War Veterans' Allowance
  • veterans' disability pension payments
  • dependants' pension
  • spouse's allowance
  • mother's allowance
  • lottery winnings
  • Canada Child Tax Benefit
  • goods and services tax credit
  • property bequeathed on death
  • payments from the Société de l'assurance-automobile du Québec
  • student loans
  • Quebec work income supplement.

  Some parts of total income assessed are in gross amounts, while others are in net amounts.

  For example, dividend income is grossed-up to represent 125% of such income. Interest and investment income are also gross figures since carrying charges are not deducted (i.e., netted out).

  On the other hand, taxable capital gains are net amounts because only 50% of the gains realized in 2004 is reported.

Deduction items

• Deductions from total income assessed
• Deductions from net income
• Non-refundable tax credits
• Summary of tax and credit items

Deductions from total income assessed

• Item 25: Registered pension plan (RPP) deduction - Line 207 of the return
  This item indicates deductions from salaries for registered pension plans.
  
  
• Item 26:RRSP contributions - Line 208 of the return
  This item indicates registered retirement savings plan (RRSP) contributions as reported on line 208 of the return. The deduction for an employee is 18% of earned income -- up to a maximum of $13,500 -- plus the unused portion from 1993 to 2003.
  
  
• Item 27: Annual union, professional, or like dues - Line 212 of the return
  This item includes membership dues, dues paid to a parity or advisory committee, malpractice liability insurance premiums, and professional membership dues if the taxfiler needs them to maintain a professional status recognized by law.
  
  Excluded are initiation fees and special assessments or charges for any purpose other than the organization's ordinary operating costs.
  
  
• Item 28: Child care expenses - Line 214 of the return
  In 2004, the limit for child care expenses was $7,000 for each child under age 7 for which the disability amount cannot be claimed. The amount of $10,000 applied for a child of any age if the taxfiler can claim the disability amount for the child. For children aged 7 to 16, the limit was $4,000 for each child.

  The maximum that a taxfiler could claim was the lesser of:

  • Part A - the child care expense payment
  • Part B - two-thirds of the taxfiler's earned income
  • Part C - $7,000 for each child under 7 and for which the disability amount cannot be claimed; $10,000 for each child for who the disability amount can be claimed and $4,000 for each child aged 7 to 16.

  
  
  

• Item 29: Carrying charges and interest expenses - Line 221 of the return or according to the Schedule 4 calculation
  This item includes:
  • carrying charges and interest expenses paid on money borrowed to earn investment income
  • fees for management or safe custody of investments
  • safety deposit box charges
  • accounting fees for recording investment income
  • investment counsel fees.
    
    
• Item 30: CPP or QPP contributions on self-employment or other earnings - line 222.
  This item represents half of the total of your Canada Pension Plan or Quebec Pension Plan contributions, if any, from Schedule 8. You also can claim on line 310 on Schedule 1, an amount for the other half.
  
  
• Item 31: Other employment expenses - Line 229 of the return
  This item includes deductions for certain expenses incurred by the taxfiler to earn employment income, such as:
  • travel expenses
  • cost of an office or wages to assistants
  • expenses paid to earn commission income
  • costs of meals, up to 50%
  • lodging while employed away from home
  • power-saw expenses
  • cost of supplies
  • expenses paid to earn income from artistic activities
  • motor vehicle costs.
    
    
• Item 32: Clergy residence deduction - Line 231 of the return
  This item indicates the amount of deduction for a cleric's residence.
  
  
• Item 33: Other deductions - Line 232 of the return
  For our purposes, these include:
  • repayments of income amounts
  • legal and accounting fees
  • capital cost allowance claims for Canadian motion picture films and videotapes
  • depletion allowances
  • Saskatchewan provincial pension plan contributions (line 209 of the return)
  • capital loss on disposition of particular Canadian business equities
  • moving expenses (line 219)
  • support payments (line 220)
  • Canadian exploration and development expenses (line 224)
  • attendant care expense (line 215)
  • business investment losses (line 217).
  • 
    
• Item 34: Total Deductions before Adjustment - Line 233 of the return
  This item is the total for Items 25 to 33.
  
  
• Item 35: Net Income before Adjustment - Line 234 of the return
  This item is the subtraction of Item 34 from Item 24.
  
  
• Item 36: Social benefits repayment - Line 422 of the return
  Taxfilers have to repay Employment Insurance premiums in whole or in part if their "net income before adjustments" is more than $48,750.
  Old Age Security benefits have to be repaid when the "net income before adjustments" is more than $59,790.
  
  
• Item 37: Net income after Adjustment - Line 236 of the return
  This item is the subtraction of Item 35 from Item 36.

Deductions from net income

• Item 38: Capital gains deduction - Line 254 of the return
  The following limits apply to capital gains deductions:
  • $500,000 of gains realized on the disposition of agricultural property
  • $500,000 on qualifying small business corporation shares.
    
    

  Cumulative net investment losses may reduce the amount of net taxable capital gains that are otherwise eligible for the capital gains deduction.
  
  

• Item 39: Additional deductions - Line 256 of the return
  These include:
  • the vow of perpetual poverty deduction;
  • part of the benefits from U.S. social security income;
  • other years' restricted farm losses;
  • income exempt under a tax treaty;
    
  • all the items in lines 248 to 256 of the return.
  • 
    
• Item 40: Total deductions
  This item is the total of Items 37 to 38.
  
  
• Item 41: Taxable income assessed - Line 260 of the return
  This is the amount on which we calculate income tax. For example:

Non-refundable tax credits

Non-refundable tax credits have the same value for all Canadians, regardless of their income. These credits reduce their federal income tax payable. However, we do not refund the excess. The amounts are the full amounts before the credit.

The non-refundable tax credit is 16% of the total credit amount. We calculate credits for charitable donations and for cultural, ecological, and government gifts of more than $200 at a rate of 29%.

• Item 42: Basic personal amount - Line 300 of the return
  This is $8,012 for all residents and for non-residents who carried on a business in Canada.
  
  
• Item 43: Age amount - Line 301 of the return
  Taxfilers who were 65 years or older in 2004 and whose income was less than $55,204 may be allowed to claim an age amount up to a maximum of $3,912.
  
  
• Item 44: Spousal or Common-law partner amount - Lines 303 and 305 of the return
  This is $6,803, which can be claimed by a taxfiler whose spouse's net income was not more than $681. The term "spouse" applies to both legally married spouses and common-law spouses.
  
  People without a spouse can claim this if they supported a relative with a net income of $7,484 or less who:
  • resided in Canada;
  • resided with the taxfiler;
  • was related by blood, marriage, or adoption;
  • was under 18 (unless the dependant was his or her parent or grandparent, or was mentally or physically infirm).

  A reduced amount can be claimed if the net income of the spouse or relative was more than $681 but less than $7,484. The reduced amount is calculated by subtracting the net income of the spouse or relative from $7,484.

• Item 45: CPP or QPP contributions - Lines 308 and 310 of the return
  This is the amount up to a maximun of $1,831.50, paid into the Canada Pension Plan or Quebec Pension Plan by employees and self-employed taxfilers. It does not include taxfilers aged 71 and over because they don't contribute.
  
  
• Item 46: Employment Insurance premiums - Line 312 of the return
  This is the amount, up to $772.20, deducted as Employment Insurance premiums and withheld by the employer, less any overpayment.
  
  
• Item 47: Pension income amount - Line 314 of the return
  This amount is equal to $1,000 or the total of payments received from certain types of pension income, whichever amount is less.
  
  "Eligible pension income" refers to any of the following:
  • a life annuity;
  • payments from an RRSP;
  • payments from a registered retirement income fund;
  • the taxable part of general annuity payments.
    
    
• Item 48: Caregiver amount - Line 315 of the return
  Taxfilers may be allowed to claim a caregiver amount up to a maximum of $3,784 for each dependant for which the net income is less than $16,172.
  
  172
• Item 49: Disability amount - Lines 316 and 318 of the return
  This is an amount that a taxfiler with a disability claims or that a taxfiler claims for a disabled person who isn't the taxfiler's spouse. The maximum claim allowed is $6,486 per disabled individual.
  
  
• Item 50: Tuition and education amount - Lines 323 and 324 of the return
  This is the amount of tuition fees (minimum $100) and the education amount. This item also includes the tuition fees and education amounts transferred from a student, to a maximum of $5,000 per student.
  
  Students who are enrolled full-time in a distance education program or correspondence course may be eligible for the education amount.
  
  
• Item 51: Interest paid on student loans - Line 319 of the return
  This item includes the interest paid on student loans in 2004 and/or the preceding 5 years.
  
  
• Item 52: Amounts transferred from your spouse - Line 326 of the return
  When a taxfiler is entitled to certain credits that aren't required to reduce his or her federal income tax to zero, these amounts can be transferred to the return of his or her spouse. The taxfiler can transfer the following:
  • age amount;
  • pension income amount;
  • disability amount;
  • tuition fees and education amount.
    
    
• Item 53: Allowable portion of medical expenses - Line 332 of the return
  This item is medical expenses, minus either 3% of net income or $1,813, whichever amount is less.
  
  
• Item 54: Total tax credits - Line 338 of Schedule 1 of the return
  This is 16% of the total credit amounts from Items 42 through 53. It also includes line 306 of Schedule 1 of the return. Amount for infirm dependants age 18 or over", which is not shown in this 64-item list.
  
  
• Item 55: Charitable donations and government gifts - Line 340 of Schedule 9
  For this item, the taxfiler can claim a maximum amount of 75% of net income. He or she can carry forward charitable donations for up to five years after the year in which they were made.
  • This includes government gifts that were made after February 18, 1997.
    
    
• Item 56: Cultural and ecological gifts - Line 342 of Schedule 9
  These types of donations are not limited to a percentage of net income. The value of gifts can be carried forward for up to five years after the year in which they were made.
  • This includes government gifts that were made or that were agreed to in writing before February 19, 1997.
    
    
• Item 57: Total tax credits on donations - Lines 346 and 348 of Schedule 1 of the return
  We calculate this credit as 16% on the first $200, and 29% on the balance.
  
  
• Item 58: Total non-refundable tax credits - Line 350 of Schedule 1 of the return
  This item is the sum of Item 54, "Total tax credits", and Item 57, "Total tax credits on donations".

Summary of tax and credit items

• Item 59: Basic federal tax - Line 429 of the return
  This amount refers to the total of federal income tax with tax adjustments, less the following:
  • non-refundable tax credits;
  • federal dividend tax credit;
  • minimum tax carryover.
    
    
• Item 60: Federal dividend tax credit - Line 425 of Schedule 1 of the return
  This is a tax credit of 13.33% of the amount on line 120 of the return, "Dividends from Canadian corporations".
  
  
• Item 61: Federal tax
  This item is the subtraction of the federal foreign tax credit from the basic federal tax.
  
  
• Item 62: Net federal tax - Line 420 of the return
  This item consists of basic federal tax, less any federal foreign tax credit, federal political contribution tax credit, investment tax credit and labour-sponsored funds tax credit, plus the additional tax on RESP accumulated income payments.
  
  
• Item 63: Net provincial or territorial tax - Line 428 of the return
  This item includes provincial or territorial surtax, flat tax (where it applies), and minimum tax, less provincial or territorial foreign tax credits and any provincial or territorial tax reduction.
  
  With the exception of Quebec, which collects its own income tax, the federal government collects provincial income taxes for the provinces. In 2004, the basic provincial and territorial rates as a percentage of basic federal tax were as follows:
  
  

The following provinces levy a surtax on provincial tax payable:

• Item 64: Total tax payable
  This item is the total of the amounts of net federal (Item 62) and provincial tax payable (Item 63), the Canada Pension Plan contributions payable on self-employment earnings (divided by 50%) (Item 45) and the repayment of social benefits (Item 36).

Date modified:

2006-09-14