Description of items

• Items 1 to 2
• Income items
• Deduction items

Items 1 to 2

• Item 1: Number of taxable returns
  This item refers to the number of returns filed for the 2008 tax year with at least $2 in federal or provincial tax payable.
  
  
• Item 2: Total number of returns
  This item is the total number of returns.

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 3: Employment income (before deductions) - Line 101 of the return, less commissions on line 102
  This item refers to income from wages and salaries, taxable allowances and benefits, bonuses and directors' fees, etc.
  
  
• Item 4: Commissions - Line 102 of the return
  This item refers to the 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 5: Other employment income - Line 104 of the return
  This item includes tips and gratuities, shareholders' loans, amounts received under a supplementary unemployment benefit plan, benefits received from income-maintenance insurance plans, etc. Net research grants may also be included either here or on Line 130 of the return.

Pension income

• Item 6: Old Age Security pension - 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 $6,082.00.
  
  
• Item 7: Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) benefits - Line 114 of the return
  This item includes death and disability benefits, and child benefit, if received by a child of a deceased or disabled contributor.
  
  
• Item 8: 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, foreign pensions, etc.

Income from other sources

• Item 9: Universal Child Care Benefit (UCCB) - Line 117 of the return
  Since July 2006, an eligible individual responsible for the care of a child under 6 years of age, is eligible to receive $100 per month for each qualified dependant.
  
  
• Item 10: Employment Insurance and other benefits - Line 119 of the return
  This represents benefits from the Employment Insurance Plan.
  
  
• Item 11: Taxable amount of dividends (eligible and other than eligible) from taxable Canadian corporations - Line 120 of the return
  This is the total dividend value, plus a 45% gross-up for the eligible dividends and a 25% gross-up for the dividends other than eligible dividends. A dividend tax credit is also available. For more information, see item 59.
  
  
• Item 12: Interest and other investment income - Line 121 of the return
  This item includes interest, foreign interest or dividend income, etc.
  
  
• Item 13: Registered disability savings Plan Income - Line 125 of the return
  This item includes the registered disability savings plan income.
  

• Item 14: Net rental income - Line 126 of the return
  This is rental 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 capital gains realized in 2008.
  
  
• 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 businesses and partnerships. A business is an activity intended to carry on for profit.
  
  
• 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 3: 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 farmers, including beekeepers, tree farmers, etc., report their income on this line.
  
  
• Item 21: Net fishing income - Line 143 of the return
  This item shows the net income from self-employed people fishing as boat owners or crew members, or fishing from shore.
  
  
• Item 22: Tax-exempt income
  This refers to the total of the following types of income:
  
  
  • workers' compensation benefits (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
  • disposition of 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)
  • apprenticeship incentive grant
  • miscellaneous fees
  • 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)
  • support payments received. A support payment is an amount a payer has to pay to a recipient for the maintenance of the recipient, children of the recipient, or both (line 128).
  • elected split-income pension amount (line 116 of the return).

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

• Item 24: Total income assessed - Line 150 of the return or the total of Items 3 to 23
  This item contains the amount reported on line 150 of the return, or the total of Items 3 to 23. It also includes the Elected split-pension amount - Line 116 of the return (This is the elected split-pension amount from line E of Form T1032). 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, eligible dividend income is grossed-up to represent 145% 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 2008 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 $20,000 -- plus any unused part from 1991 to 2007. Eligible earned income is from employment, business and real estate rentals and does not include income from investments.
  
  
• Item 27: Deduction for elected split-pension amount - Line 210 of the return
  This item represents the elected split-pension amount from line E of Form T1032.
  
  
• Item 28: 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, licences or charges for any purpose other than the organization's ordinary operating costs.
  
  
• Item 29: Child care expenses - Line 214 of the return
  In 2008, 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 30: 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
  • certain investment counsel fees.
    
    
• Item 31: Deduction for CPP or QPP contributions on self-employment and 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 32: 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 33: 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 (line 231)
  • Universal Child Care Benefit (UCCB) repayment (line 213)
  • deduction for PPIP premiums on self-employment income (line 223)

  
  
  

• Item 34: Total Deductions before adjustment - Line 233 of the return
  This item is the total for Items 25 to 33.
  
  
• Item 35: Social benefits repayment - Line 235 of the return
  Employment Insurance premiums have to be repaid in whole or in part if there is an amount in box 15 of the taxfiler's T4E slip, the rate in box 7 is 30% and the amount on line 234 of his or her return, minus any UCCB (line 117), plus any deduction on line 213, is more than $52,875.

  Old Age Security benefits have to be repaid when the "net income before adjustments" is more than $64,718.

• Item 36: Net income after Adjustment - Line 236 of the return
  This item is the result of subtracting social benefits repayment and total deductions before adjustment from total income (Items 34 and 35 subtracted from Item 24).
  
  

Deductions from net income

• Item 37: 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
    
    

  Under proposed changes, the deduction limit will be increased to $375,000 (1/2 of the proposed $750,000 lifetime capital gains exemption) on capital gains arising from dispositions of qualified property after March 18, 2007.
  
  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 38: Losses from 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 39: Additional deductions - Line 256 of the return
  These include:
  • 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 40: Total deductions (from net income) - Line 257 of the return
  This item is the total of Item 37, 38 and Item 39.
  
  
• Item 41: Taxable income assessed - Line 260 of the return
  This is the amount on which we calculate income tax. For example:
  
  
  

  Taxable income	Tax
  $37,885 or less	15%
  $37,885 to $75,769	22% plus $5,683
  $75,769 to $123,184	26% plus $14,017
  Over $123,184	29% plus $26,345

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 42: Age amount - Line 301 of the Schedule 1 of the return
  Taxfilers who were 65 years or older in 2008 and whose income was less than $66,697 may be allowed to claim an age amount up to a maximum of $5,276.
  
  
• Item 43: Other federal non-refundable tax credits - Line 300, 303, 305, 367, 306 and 313 of Schedule 1 of the return
  This item includes the following credits:
  • Basic personal amount (line 300): This is $9,600 for all residents and for non-residents who carried on a business in Canada.
  • Spouse of common-law partner amount (line 303): This amount can be claimed by a taxfiler whose spouse's net income was less than $9,600.
  • Amount for an eligible dependant (line 305): People without a spouse can claim an amount on line 305 if they supported a relative with a net income of $9,600 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).
  • Amount for children born in 1991 or later (line 367): It represents the amount of $2,038 that a taxfiler can claim for each of his or her children (or his or her spouse or common-law partner's children) who are under 18 years of age at the end of the year.
  • Amount for infirm dependants age 18 or older (line 306): Amount up to a maximum of $4,095 for each taxpayer's or of his or her spouse's or common-law partner's dependent if that dependent had a mental or physical impairment and was born in 1990 or earlier.
  • Adoption expenses (line 313): A maximum credit of $10,643 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 $2,049.30 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 $711.03, deducted as Employment Insurance premiums and withheld by the employer, less any overpayment.
  
  
• Item 46: Provincial Parental Insurance Plan (PPIP) premiums paid, PPIP premiums payable on employment income, PPIP premiums payable on self-employment income - Lines 375, 376, and 378 of Schedule 1 of the return
  This represents the premiums paid by the residents of Quebec to the PPIP. The maximum amount that the taxfiler can claim is $272.25.
  
  
• Item 47: Canada Employment Amount - Line 363 of Schedule 1 of the return
  Employees are eligible to claim an employment amount. This amount is the lesser of:
  • $1,019; and
  • The total of the income reported on lines 101 and 104 of the return.

  
  

• Item 48: 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, passes of longer duration, and certain passes of shorter duration. Public transit inludes local bus, streetcar, subway, commuter train or bus, and local ferry.
  
  
• Item 49: Children Fitness amount - Line 365 of Schedule 1 of the return
  This item represents the fees paid in 2008 by the taxfiler to register his or her child or his or her spouse or common-law partner's child in a prescribe program of physical activity. This credit can be claimed to a maximum of $500 per child.
  
  The taxfiler can claim an additional amount of $500 for a child that qualifies for the disability amount and is under 18 years of age.
  
  
• Item 50: Pension income amount - Line 314 of Schedule 1 of the return
  This amount is equal to $2,000 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,
    
    

  and certain other pension incomes.
  
  

• Item 51: Disability and caregiver amounts - Lines 315, 316 and 318 of 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 $7,021 for each person.
  
  Taxfilers may be allowed to claim a caregiver amount up to a maximum of $4,095 for each dependant for which the net income is less than $18,081.
  
  
• Item 52: Education amounts and interest - Lines 323, 324 and 319 of Schedule 1 of the return
  This is the amount for tuition fees (minimum $100), education, and textbook. This amount includes the tuition fees, education and textbook amounts transferred from a student, to a maximum of $5,000 per student.
  
  This item also includes the interest paid on student loans in 2008 and/or preceding 5 years.
  
  
• Item 53: Amounts transferred from spouse or common-law partner - Line 326 of 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
  • amount for children born in 1991 or later
  • pension income amount
  • disability amount
  • tuition, education and textbooks amounts.
    
    
• Item 54: Allowable amount of medical expenses - Line 332 of Schedule 1 of the return
  The allowable medical expenses are the excess of 3% of net income or $1,962, whichever amount is less; The allowable medical expense maximum is $10,000 for each dependant.
  
  
• Item 55: Net tax credits on personal amounts - Line 338 of the Schedule 1 of the return
  This is 15% of the total credit amounts from Items 42 through 54.
  
  
• Item 56: Donations and gifts - Lines 340 and 342 of 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 and 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. For cultural and 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.
  
  
• Item 57: Tax credits on donations and gifts - Lines 346 and 348 of Schedule 9 of the return
  We calculate this credit as 15% on the first $200, and 29% on the balance.
  
  
• Item 58: Total federal non-refundable tax credits - Line 350 of Schedule 1 of the return
  This item is the sum of Item 55, "Net tax credits on personal amounts" and Item 57 "Donations and gifts".
  

Summary of tax and credit items

• Item 59: Federal dividend tax credit - Line 425 of Schedule 1 of the return
  This is a tax credit of 18.9655% for eligible dividends and 13.3333% for dividends other than eligible dividends on line 120 of the return, "Taxable amount of dividends from taxable Canadian corporations".
  
  
• Item 60: 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 61: 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, labour-sponsored funds tax credit, and federal logging tax credit.
  
  
• Item 62: CPP contribution payable on self-employment and other earnings - Line 421 of the return
  This item represents the Canada Pension Plan contributions for self-employed and other earnings.
  
  
• Item 63: Net provincial or territorial tax - Line 428 of the return
  For provinces and territories (except for Quebec), tax is based on a percentage of basic federal tax.
  In 2008, the provincial and territorial income tax and surtax rates are provided below:
  
  
  

  Province/Territory	Rate
  Newfoundland and Labrador	8.2% on the first $30,215 $2,478 plus 13.3% on the next $30,214 $6,496 plus 16% on remainder
  Prince Edward Island	9.8% on the first $31,984 $3,134 plus 13.8% on the next $31,985 $7,548 plus 16.7 on remainder
  Nova Scotia	8.79% on the first $29,590 $2,601 plus 14.95% on the next $29,590 $7,025 plus 16.67% on the next $33,820 $12,662 plus 17.5% on the remainder
  New Brunswick	10.12% on the first $34,836 $3,525 plus 15.48% on the next $34,837 $8,918 plus 16.80% on the next $43,600 $16,243 plus 17.95% on remainder
  Quebec	n/a
  Ontario	6.05% on the first $36,020 $2,179 plus 9.15% on the next $36,021 $5,475 plus 11.16% on remainder
  Manitoba	10.9 % on the first $30,544 $3,329 plus 12.75% on the next $35,456 $7,850 plus 17.4% on remainder
  Saskatchewan	11% on the first $39,135 $4,305 plus 13% on the next $72,679 $13,753 plus 15% on remainder
  Alberta	10%
  British Columbia	5.06% on the first $35,016 $1,772 plus 7.7% on the next $35,017 $4,468 plus 10.5% on the next $10,373 $5,557 plus 12.29% on the next $17,230 $7,675 plus 14.7% on remainder
  Northwest Territories	5.9 % on the first $35,986 $2,123 plus 8.6% on the next $35,987 $5,218 plus 12.2% on the next $45,038 $10,713 plus 14.05% on remainder
  Nunavut	4 % on the first $37,885 $1,515 plus 7% on the next $37,884 $4,167 plus 9% on the next $47,415 $8,435 plus 11.5% on remainder
  Yukon	7.04 % on the first $37,885 $2,667 plus 9.68% on the next $37,884 $6,334 plus 11.44% on the next $47,415 $11,759 plus 12.76% on remainder
  Non-residents	15% on the first $37,885 $5,683 plus 22% on the next $37,884 $14,017 plus 26% on the next $47,415 $26,345 plus 29% on remainder

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

  Province/Territory	Surtax	Provincial/territorial tax payable
  Prince Edward Island	10%	over $8,850
  Nova Scotia	10%	over $10,000
  Ontario	20% 36%	over $4,162 over $5,249
  Yukon	5%	over $6,000

• Item 64: Total tax payable - Line 435 of the return
  This is the total of the amounts of net federal (Item 61), provincial or territorial tax payable (Item 63), Canada Pension Plan contributions payable on self-employment earnings (Item 62), and the repayment of social benefits (Item 35) that is reported on line 422. Starting in 1999, total tax payable includes the Yukon First Nations tax from line 432 of the return.

Date modified:

2010-01-12