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 2006 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 $5,846.19.
  
  
• 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: Universal Child Care Benefit (UCCB) - Line 117 of the return
  Since July 2006, if you are an eligible individual responsible for the care of a child under 6 years of age, you are eligible to receive $100 per month for each qualified dependant.
• Income from other sources
• Item 11: Employment Insurance & other benefits - Line 119 of the return
• This comes from the Employment Insurance Plan.
• Item 12: Taxable amount of dividends from taxable Canadian corporations - Line 120 of the return
• This is the total dividend value, plus a 25% gross-up. A dividend tax credit is also available. For more information, please see item 60.
• Item 13: Interest & other investment income - Line 121 of the return
  This item is the total of bond, bank, and mortgage interest, and income from trusts, and foreign income.
  

• Item 14: Net rental income - Line 126 of the return
  This is retnal income after expenses.
• 
  
• 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 2006, 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).

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
  This 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
  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
  This item contains the following incomes reported on line 130 of the return:
  • supplementary unemployment 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 limited partnership income (line 122 of the return)
  • 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 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 2006 are 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) contributions - 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 $18,000 -- plus any unused part from 1991 to 2005. Eligible earned income is from employment, business and real estate rentals and does not include income from investments.
  
  
• 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.
  
  Not included 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 2006, the limit for child care expenses was $7,000 for each child under age 7 for which the disability amount could not be claimed. The amount of $10,000 applied for a child of any age if the taxfiler could 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 whom the disability amount could not be claimed; $10,000 for each child for whom the disability amount could 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: Deduction for CPP or QPP contributions on self-employment & other earnings - line 222 of the return
  This item represents half of the total of your Canada Pension Plan or Quebec Pension Plan contributions, if any, from Schedule 8. The taxfiler can claim an amount for the other half on line 310 on Schedule 1.
  
  
• 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: Other deductions
  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)
  • clergy residence deduction

  
  
  

• Item 33: Total Deductions before adjustment
  This item is the total for Items 25 to 32.
  
  
• Item 34: Social benefits repayment - Line 422 of the return
  Employment Insurance premiums have to be repaid in whole or in part if the "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 $62,144.

• Item 35: Net income after Adjustment
  This item is the result of substracting social benefits repayment from net income..
  
  

Deductions from net income

• Item 36: 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. Losses for deceased taxfilers are reported here.
  
  

• Item 37: Losses of other years
  This item includes lines 251, 252 and 253, of the return, which represents limited partnership, non-capital, net-capital and restricted farm losses of other years.
  
• Item 38: Additional deductions
  These include:
  • the vow of perpetual poverty deduction
  • 15% of the benefits from U.S. social security income
  • lines 244, 248, 249, 250, 255, and 256 of the return
  • net employment income from a prescribed international organization
  • income exempt under a tax treaty
  • adult basic education tuition assistance
    
    
• Item 39: Total deductions (from net income)
  This item is the total of Item 37, 38 and Item 39.
  
  
• Item 40: 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 15% 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 41: Basic personal amount - Line 300 of Schedule 1 of the return.
  This is $8,839 for all residents and for non-residents who carried on a business in Canada.
  
  
• Item 42: Age amount - Line 301 of the Schedule 1 of the return.
  Taxfilers who were 65 years or older in 2006 and whose income was less than $57,377 may be allowed to claim an age amount up to a maximum of $4,066.
  
  
• Item 43: Spouse or common-law partner and eligible dependant amounts, and adoption expenses - Lines 303, 305 and 313 of Schedule 1 of the return.
  This is $7,505, which can be claimed by a taxfiler whose spouse's net income was not more than $751. 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 $8,256 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 $751 but less than $8,256. The reduced amount is calculated by subtracting the net income of the spouse or relative from $8,256.

• A maximum credit of $10,000 can be claimed for eligible adoption expenses for any child under the age of 18 years.
• Item 44: CPP or QPP contributions - Lines 308 and 310 of Schedule 1 of the return.
  This is the amount, up to a maximum of $1,910.70, 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 45: Employment Insurance premiums - Line 312 of Schedule 1 of the return.
  This is the amount, up to a maximun of $729.30, deducted as Employment Insurance premiums and withheld by the employer, less any overpayment.
  
• 
  
• Item 46: Canada Employment Amount - Line 361 of
• Schedule 1 of the return.
  Employees are eligible to claim an employment amount. This amount is the lesser of:
• $250; and
• The total of the income reported on lines 101 and 104 of the return.
  
• 
  
• Item 47: Public transit passes amount - Line 364 of Schedule 1 of the return.
  An amount can be claimed for the cost of monthly public transit passes or passes of longer duration. Public transit inludes local bus, streetcar, subway, commuter train or bus, and local ferry.
  
  
• Item 48: Pension income amount - Line 314 of the of the Schedule 1 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 49: Caregiver amount - Lines 315 of the Schedule 1 of the return.
  Taxfilers may be allowed to claim a caregiver amount up to a maximum of $3,933 for each dependant for which the net income is less than $17,363.
  
  
• Item 50: Disability amount - Lines 316 and 318 of the of the Schedule 1 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 $6,741 for each person.
  
  
• Item 51: Tuition, education and textbook amounts - Lines 323 and 324 of the Schedule 1 of the return.
  This is the amount of tuition fees (minimum $100) and the education amount. This amount 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 52: Interest paid on student loans - Lines 319 of the Schedule 1 of the return.
  This item includes the interest paid in 2006 and/or preceding 5 years.
  
  
• Item 53: Amounts transferred from your spouse or common-law partner - Line 326 of the Schedule 1 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 54: Allowable amount of medical expenses - Line 332 of the Schedule 1 of the return.
  The allowable medical expenses is the excess of 3% of net income or $1,844, whichever amount is less; The allowable medical expense maximum is $5,000 for each dependant.
  
  
• Item 55: Total tax credits on personal amounts - Line 338 of the Schedule 1 of the return.
  This is 15.25% of the total credit amounts from Items 41 through 54. It also includes line 306 of the Schedule 1 of the return, and the amount for infirm dependants age 18 or over, which is not shown in this 64-item list.
  
  
• Item 56: Allowable charitable donations, government gifts, cultural & ecological gifts - Lines 340 & 342 of the Schedule 9 of the return.
  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. For cultural & ecological gifts, 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: Donations and gifts - Lines 346 and 348 of the Schedule 9 of the return.
  We calculate this credit as 15.25% on the first $200, and 29% on the balance.
  
  
• Item 58: Total federal non-refundable tax credits - Line 350 of the Schedule 1 of the return.
  This item is the sum of Item 55, "Total tax credits on personal amounts" and Item 57 "Donations and gifts".
  

Summary of tax and credit items

• Item 59: Basic federal tax - Line 429 of Schedule 1 the return
  This amount refers to the total of federal income tax, less the following:
  • non-refundable tax credits
  • federal dividend tax credit
  • minimum tax carryover
  • overseas employment tax credit
    
    
• 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: CPP contribution payable on self-employment and other earnings - Line 421 of the return
  This item represents the Canada Pension Plan contributions.
  
  
• Item 62: Net federal tax - Line 420 of the return
  This item consists of federal tax less non refundable tax credits (see item 58), federal dividend tax credit, overseas employment tax credit, minimum tax carry-over, foreign tax credit, political contribution tax credit, investment tax credit and labour-sponsored funds tax credit, and federal logging tax credit.
  
  
• Item 63: Net provincial or territorial tax - Line 428 of the return
  Starting in 2000, provincial tax is calculated in the same way as the federal tax, under the new Tax On Income (TONI) method. For the other provinces and territories (except for Quebec), tax is based on a percentage of basic federal tax.
  
  In 2006, the provincial and territorial income tax and surtax rates are provided below:
  
  

The following provinces and territories levy a surtax on provincial and territorial tax payable:

• Item 64: Total tax payable
  This is the total of the amounts of net federal (Item 62), provincial or territorial tax payable (Item 63), Canada Pension Plan contributions payable on self-employment earnings (Item 61), and the repayment of social benefits (Item 34). Starting in 1999, total tax payable includes the Ykon First Nations tax from line 432 of the return.

Date modified:

2009-04-20