9.3.1 Deductions from income

From: Financial Consumer Agency of Canada

You can deduct certain expenses and other adjustments from your total income to get your taxable income. These deductions reduce the amount of income that you pay tax on, so they reduce your overall income tax. The more deductions that apply to you, the less your taxable income becomes.

Deductions from taxable income are listed on lines 24400 to 25600 of the federal T1 form (see illustration). Review the deductions listed to see any that you think might apply to you.

Step 3 - Net income and Step 4 - Taxable income of T1 General - Income Tax and Benefit Return for Non-Residents and Deemed Residents of Canada
Text version: Step 4 - Taxable income

Step 4 - Taxable income

line 24400 - Canadian Forces personnel and police deductions

line 24900 - Security options deductions

line 25000 - Other payments deduction 

line 25100 - Limited partnership losses of other years

line 25200 - Non-capital losses of other years

line 25300 - Net capital losses of other years

line 25400 - Capital gains deductions

line 25500 - Northern residents deductions 

line 25600 - Additional deductions 

 

In Quebec, deductions from taxable income are listed on lines 275 to 299 of the TP-1.D-V (see illustration). Review the deductions listed to see any that you think might apply to you.

Net income section of the TP-1.D.GR-V - Quebec
Taxable income section of the TP-1.D-V - Quebec
Text version: Quebec's Taxable income

Taxable income

Line 278 - Universal Child Care Benefit and income from a registered disability savings plan

Line 286 - Deductions for strategic investments

Line 289 - Non-capital losses of other years

Line 290 - Net capital losses from other years 

Line 292 - Capital gains deduction 

Line 293 - Deduction for an Indian

Line 295 - Deductions for certain income 

Line 297 - Miscellaneous deductions 

 

You can deduct income paid into Registered Pension Plans (RPPs) and Registered retirement savings plans (RRSPs) from both your federal and Quebec tax, up to a limit that is based on the income you have earned in previous years, the amount previously claimed and an annual ceiling. For details, see the section titled Registered Savings Plans.

Other key deductions include:

  • six percent of your eligible work income to a maximum of $1,190, if you earned income from a job or a business you carried on (line 201 of the Quebec TP-1.D-V; a similar amount is allowed as a non-refundable tax credit on the T1 return)
  • moving expenses if you had to move more than 40 kilometres to take a job (line 21900 of the T1, line 228 of the TP-1.D-V)
  • certain support payments to a spouse, de facto partner or child under a separation agreement or court order (line 22000 of the T1, line 225 of the TP-1.D-V)
  • interest and fees required for investments (but not for all investments and not for registered savings plans) (line 22100 of the T1, line 231 of the TP-1.D-V)
  • half of the money a self-employed person paid into the Canada Pension Plan or Quebec Pension Plan (line 22200 of the T1, line 248 of the TP-1.D-V)
  • some types of losses in a business you own, including capital losses on the sale of shares (line 21700 of the T1, line 234 of the TP-1.D-V)
  • annual union, professional and similar dues related to your employment (line 21200 of the T1; union and similar dues are given tax credits in Quebec, in line 373 of the TP-1.D-V)
  • expenses a person with a disability paid to earn income or go to school (line 21500 of the T1; in Quebec, a person with a disability can receive a tax credit for a severe and prolonged impairment in mental or physical functions, in line 376 of the TP-1-V)
  • child care expenses for children under 16 years old (line 21400 of the T1); Quebec provides a refundable tax credit for childcare expenses instead of a deduction from income (line 455 of the TP-1.D-V).

Normally, you must have receipts for actual expenses or similar documents to claim these deductions, but you don't have to send them in with your tax return.

These deductions are available only when you meet specific conditions, so check the tax guide to be sure that they apply.

Tip

Tax deductions reduce your total income to your Taxable Income, line 26000 on the federal T1 tax return and line 299 on the Quebec TP-1.D-V. Taxable Income is used to calculate how much you will receive for federal benefits that are determined by your income, such as the goods and services tax/harmonized sales tax (GST/HST) refund and the Guaranteed Income Supplement. If your Taxable Income is high enough, some benefits are reduced or eliminated entirely—a limit called a clawback.

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