5001-N (E)

Table of Contents

• Form NL428, Newfoundland and Labrador Tax and Credits
• Step 1 - Newfoundland and Labrador tax on taxable income
• Step 2 - Newfoundland and Labrador non-refundable tax credits
  • Line 5804 - Basic personal amount
  • Line 5808 - Age amount
  • Line 5812 - Spouse or common-law partner amount
  • Line 5816 - Amount for an eligible dependant
  • Line 5820 - Amount for infirm dependants age 18 or older
  • Line 5824 - Canada Pension Plan or Quebec Pension Plan contributions through employment
  • Line 5828 - Canada Pension Plan or Quebec Pension Plan contributions on self-employment and other earnings
  • Line 5832 - Employment Insurance premiums
  • Line 5836 - Pension income amount
  • Line 5840 - Caregiver amount
  • Line 5844 - Disability amount
  • Line 5848 - Disability amount transferred from a dependant (other than your spouse or common-law partner)
  • Line 5852 - Interest paid on your student loans
  • Line 5856 - Your tuition and education amounts
  • Line 5860 - Tuition and education amounts transferred from a child
  • Line 5864 - Amounts transferred from your spouse or common-law partner
  • Line 5868 - Medical expenses
  • Line 5872 - Medical expenses adjustment
  • Line 5896 - Donations and gifts
• Step 3 - Newfoundland and Labrador tax
  • Line 38 - Newfoundland and Labrador tax on split income
  • Lines 42 to 45 - Newfoundland and Labrador dividend tax credit
  • Line 50 - Newfoundland and Labrador additional tax for minimum tax purposes
  • Line 54 - Provincial foreign tax credit
  • Lines 56 and 57 - Political contribution tax credit
  • Line 59 to 61 - Student loan tax credit
• Student Loan tax credit factor table

The information in this section will help you complete Form NL428, Newfoundland and Labrador Tax and Credits . The terms spouse and common-law partner are defined in the General Income Tax and Benefit Guide.

The term end of the year means December 31, 2003, the date you left Canada if you emigrated in 2003, or the date of death for a person who died in 2003.

Form NL428, Newfoundland and Labrador Tax and Credits

Complete Form NL428 if you were a resident of Newfoundland and Labrador at the end of the year.

If you had income from a business with a permanent establishment outside Newfoundland and Labrador, complete Form T2203, Provincial and Territorial Taxes for 2003 - Multiple Jurisdictions , instead of completing Form NL428.

You also have to complete Form NL428 if you were a non-resident of Canada in 2003 and you earned income from employment in Newfoundland and Labrador, or received income from a business with a permanent establishment only in Newfoundland and Labrador.

Step 1 - Newfoundland and Labrador 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 - Newfoundland and Labrador non-refundable tax credits

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

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

Newcomers to Canada and emigrants

If you prorated any of the amounts you claimed on lines 300 to 306, 315, 316, 318, 324, and 326 of your federal Schedule 1, you have to prorate the corresponding provincial amounts at lines 5804 to 5820, 5840, 5844, 5848, 5860, and 5864.

Line 5804 - Basic personal amount

Claim the basic personal amount of $7,410.

Line 5808 - Age amount

You can claim this amount if you were 65 or older on December 31, 2003, and your net income (line 236 of your return) is less than $49,134.

If your net income is:

• $25,921 or less, enter $3,482 on line 5808; or
• more than $25,921 but less than $49,134, complete the calculation for line 5808 on the Provincial Worksheet to determine your claim.

Note
You may be able to transfer all or part of your age amount to your spouse or common-law partner or to claim all or part of his or her age amount. See line 5864 for details.

Line 5812 - Spouse or common-law partner amount

You can claim this amount if the rules are met for claiming the amount 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 $6,661.

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

• $606 or less, enter $6,055 on line 5812; or
• more than $606 but less than $6,661, complete the calculation on Form NL428 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 of page 1 on your return.

Line 5816 - Amount for an eligible dependant

You can claim this amount if the rules are met for claiming the amount 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 $6,661.

If your dependant's net income is:

• $606 or less, enter $6,055 on line 5816; or
• more than $606 but less than $6,661, complete the calculation for line 5816 on the Provincial Worksheet to determine your claim.

If you have not already completed 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 the rules are met for claiming the amount 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 $7,410.

Complete the calculation for line 5820 on the Provincial Worksheet to determine 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 the amount 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 the rules are met for claiming the amount 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 $13,853.

Complete the calculation for line 5840 on the Provincial Worksheet to determine your claim.

Line 5844 - Disability amount

• can claim this amount if you met the rules for claiming the amount on line 316 of federal Schedule 1.
• If you were 18 or over at the end of the year, enter $5,000 on line 5844.
• If you were under 18 at the end of the year, you may be eligible to claim a supplement up to a maximum of $2,353 in addition to the disability amount of $5,000. Complete the calculation for line 5844 on the Provincial Worksheet to determine your claim.

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

You can claim this amount if the rules are met for claiming the amount on line 318 of federal Schedule 1. Complete the calculation for line 5848 on the Provincial Worksheet to determine 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 - Your 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 NL(S11), Provincial Tuition and Education Amounts , to calculate your claim.

Receipts - If you are filing a paper return, attach the completed Schedule NL(S11). Whether you are filing a paper return or electronically, keep your forms and official tuition fees receipts in case we ask to see them.

Transferring and carrying forward amounts

You may not need all of your 2003 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), or 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 NL(S11) to calculate the provincial amount available to transfer, as well as 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 calculated for the same person on your federal Schedule 11. You must enter the provincial amount you are transferring on line 20 of your Schedule NL(S11).

Complete Part 2 of Schedule NL(S11) to calculate the amount you can carry forward to a future year. This amount corresponds to the part of your tuition and education amounts you do not need to use (and do not transfer) for the year.

Line 5860 - Tuition and education amounts transferred from a child

You can claim this amount if the rules are met for claiming the amount 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 his or her Form T2202 or T2202A.

Notes
The student must have entered this amount on line 20 in Part 2 of his or her Schedule NL(S11). He or she may have chosen to transfer an amount that is less than the available provincial amount. The student cannot transfer to you any unused tuition and education amounts carried forward from a previous year. If the student was a resident of another province or territory on December 31, 2003, special rules may apply. Contact your tax services office to determine the amount you can claim on line 5860. Other rules may apply if the student has a spouse or a common-law partner. See line 324 in the General Income Tax and Benefit Guide .

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

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

You can claim these amounts if the rules are met for claiming the amount on line 326 of federal Schedule 1. Complete Schedule NL(S2), Provincial Amounts Transferred From Your Spouse or Common-law Partner , to calculate your claim. Attach this schedule to your return.

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. They have to cover the same 12-month period ending in 2003 and must not have been claimed on a 2002 return. Your total expenses have to be more than either 3% of your net income (line 236 of your return) or $1,614, whichever is less.

If the total of expenses claimed is more than $1,614 but less than $1,755, 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 $7,410, complete the calculation for line 5872 on the Provincial Worksheet.

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 NL428.

Step 3 - Newfoundland and Labrador tax

Line 38 - Newfoundland and Labrador 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 more information on tax on split income in the General Income Tax and Benefit Guide .

Lines 42 to 45 - Newfoundland and Labrador dividend tax credit

The rate for the Newfoundland and Labrador dividend tax credit changed on March 22, 2002. If you received income from a trust, you may have income from dividends paid prior to March 22, 2002.

If applicable, the issuer of the information slips will indicate the amount of taxable dividends paid before March 22, 2002, in a letter or in the note or details area of the information slip. Enter this amount beside box 6173 and use line 43 to calculate a credit of 9%.

Use line 44 to calculate a credit of 5% for all other dividends paid on or after March 22, 2002.

Receipts - If you are filing a paper return, attach the related slips, letters, or statements. If you are filing electronically, keep all of your documents.

Line 50 - Newfoundland and Labrador 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 Newfoundland and Labrador additional tax for minimum tax purposes.

To do this, complete the calculation on line 50 of Form NL428. You can find information about minimum tax in the General Income Tax and Benefit Guide .

Line 54 - Provincial foreign tax credit

If your federal foreign tax credit on non-business income is less than the related tax you paid to a foreign country, you may be eligible to claim a provincial foreign tax credit.

To claim the credit get Form T2036, Provincial or Territorial Foreign Tax Credit from the CCRA's Web site or by contacting us (see the section called "If you have questions…").

Enter, on line 54 of Form NL428, the tax credit calculated on line 5 of Form T2036.

Receipts - Attach Form T2036 to your paper return. If you are filing electronically, keep all of your documents in case we ask to see them.

Lines 56 and 57 - Political contribution tax credit

You can claim a credit for the contributions you made in 2003 to registered Newfoundland and Labrador political parties or district associations, or to registered Newfoundland and Labrador independent political candidates during an election period.

How to claim

Enter your total contributions on line 56 of Form NL428. Determine the amount to enter on line 57 as follows:

• For contributions of more than $1,150, enter $500 on line 57.
• For contributions of $1,150 or less, complete the calculation for line 57 on the Provincial Worksheet .

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

Line 59 to 61- Student loan tax credit

If you are a resident of Newfoundland and Labrador, you can claim a tax credit based on the principal amount that you paid in 2003 on the Newfoundland and Labrador portion of your student loan.

If you are a single parent who claimed an amount at line 5816 for a dependant child, or if you are eligible to claim the disability amount at line 5844, on Form NL428, the tax credit rate used to calculate your claim is increased by 10%.

How to claim

Enter your total principal payment on line 59 on Form NL428.

Use the student loan tax credit factor table on the next page to determine the tax credit rate to calculate your claim. Enter the result on line 61 of Form NL428.

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

Lines 63 to 65 - Direct Equity Tax Credit

You can claim this credit for investments in eligible shares you acquired in 2003 (that you did not claim on your 2002 return) or in the first 60 days of 2004. On line 61 of Form NL428, enter the credit shown on Form NLDETC-1, Newfoundland and Labrador Direct Equity Tax Credit, issued by the Newfoundland and Labrador Department of Finance.

On line 64 of Form NL428, enter any unused credit from previous years.

The maximum credit that you can claim is $50,000 per year, including unused amounts.

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

You may not need all of your credit to reduce your 2003 provincial income tax to zero. Use the calculation for lines 67, 68, and 69 on the Provincial Worksheet to determine your 2003 unused credit available for carryback to previous years. Enter, on line 67 of Form NL428, the amount you want to carry back to reduce your 2002 Newfoundland and Labrador tax. Enter on line 68 any amount you want to carry back to 2001 and on line 69 any amount you want to carry back to 2000.

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

Student Loan tax credit factor table

Use the taxable income you entered on line 1 of Form NL428, Newfoundland and Labrador Tax and Credits, to determine the tax credit factor to calculate your claim for the student loan tax credit on line 61.

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