ARCHIVED - Information for Residents of the Northwest Territories

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What's new for 2010?

The income levels and most of the non-refundable tax credits used to calculate your Northwest Territories income tax have changed.

There is a new non-refundable tax credit for the Employment Insurance premiums on self-employment and other eligible earnings.

The rate used to calculate the dividend tax credit for eligible dividends has changed.

Form NT428, Northwest Territories Tax, reflects these changes.

General Information

Northwest Territories Child Benefit

The Northwest Territories Child Benefit (NWTCB) is a non-taxable amount paid monthly to qualifying families with children under 18 years of age. The Territorial Worker’s Supplement, part of the NWTCB program, is an additional benefit paid to qualifying families with working income who have children under 18 years of age. Benefits are combined with the Canada Child Tax Benefit into a single monthly payment.

For more information on the payment amounts, see Pamphlet T4114, Canada Child Benefits.

There is no need to apply separately to get payments under this program. We will use the information from your Canada Child Benefits application to determine your eligibility for the program.

File your tax return – You (and your spouse or common-law partner) should file your 2010 tax return(s) as soon as possible. The information you give on your return(s) will determine how much you will get starting in July 2011.

This program is fully funded by the Northwest Territories. For more information, call 1-800-387-1193 .

Completing your Northwest Territories forms

You can download and print a copy of Form NT428, Northwest Territories Tax, and Form NT479, Northwest Territories Credit, which you need to calculate your Northwest Territories tax and credit. Complete the forms that apply to you, and attach a copy to your return.

The following information will help you complete Form NT428 and Form NT479.

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, 2010, the date you left Canada if you emigrated in 2010, or the date of death for a person who died in 2010.

Tax Tip
A number of Northwest Territories tax measures are distinct from corresponding federal measures. However, many rules for calculating Northwest Territories tax are still based on the federal Income Tax Act. As a result, you may find it easier to calculate your federal tax first. Your total taxes payable will be the same, no matter which tax you calculate first.

Form NT428, Northwest Territories Tax

Complete Form NT428 if you were a resident of the Northwest Territories at the end of the year.

If you had income from a business with a permanent establishment outside the Northwest Territories, complete Form T2203, Provincial and Territorial Taxes for 2010 - Multiple Jurisdictions, instead of completing Form NT428.

You also have to complete Form NT428 if you were a non-resident of Canada in 2010 and you earned income from employment in the Northwest Territories or received income from a business with a permanent establishment only in the Northwest Territories.

Step 1 – Northwest Territories non-refundable tax credits

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

To calculate some of the non-refundable tax credits, you will need to use the Territorial 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 territorial amounts on lines 5804 to 5820, 5840, 5844, 5848, 5860, and 5864.

Line 5804 – Basic personal amount

Claim the basic personal amount of $12,740.

Line 5808 – Age amount

You can claim this amount if you were 65 years of age or older on December 31, 2010, and your net income (line 236 of your return) is less than $74,053.

If your net income is:

$32,506 or less, enter $6,232 on line 5808; or
more than $32,506 but less than $74,053, complete the calculation for line 5808 on the Territorial 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. Read 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. You still may be able to claim the territorial amount if your spouse's 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 $12,740.

Complete the calculation on Form NT428 to determine your claim and enter the amount 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 on page 1 of 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. You still may be able to claim the territorial amount if your dependant’s net income (line 236 of his or her return, or the amount it would be if he or she filed a return) is less than $12,740.

Complete the calculation on Form NT428 to determine your claim, and enter the amount on line 5816.

Note
If you were a single parent on December 31, 2010, and you choose to include all Universal Child Care Benefit amounts you received in 2010 in the income of your dependant, include this amount in the calculation of his or her net income.

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.

Complete the calculation for line 5820 on the Territorial Worksheet to determine your claim.

Line 5824 – CPP or QPP contributions through employment

Enter on this line the amount you claimed on line 308 of federal Schedule 1.

Line 5828 – CPP or QPP 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 through employment

Enter on this line the amount you claimed on line 312 of federal Schedule 1.

Line 5829 – Employment Insurance premiums on self‑employment and other eligible earnings

Enter on this line the amount you claimed on line 317 of federal Schedule 1.

Line 5836 – Pension income amount

You can claim this amount if you met the rules for claiming an amount on line 314 of federal Schedule 1.

The amount you can claim on line 5836 is the amount on line 314 of federal Schedule 1, or $1,000, whichever is less.

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.

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

Line 5844 – Disability amount

You can claim this amount if you met the rules for claiming the amount on line 316 of federal Schedule 1.

If you were 18 years of age or over at the end of the year, enter $10,332 on line 5844.
If you were under 18 years of age at the end of the year, you may be eligible to claim a supplement up to a maximum of $4,223 in addition to the disability amount of $10,332. Complete the calculation for line 5844 on the Territorial 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 Territorial 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

Complete Schedule NT(S11), Territorial Tuition and Education Amounts, to calculate your claim.

Supporting documents – If you are filing electronically, keep all your documents in case we ask to see them at a later date. If you are filing a paper return, attach your completed Schedule NT(S11), but do not send your other documents. Keep all your documents in case we ask to see them at a later date.

Transferring and carrying forward amounts

You may not need all of your 2010 tuition and education amounts to reduce your territorial income tax to zero. In this case, you can transfer all or some of the unused part to one person, either your spouse or common-law partner (who would claim it on line 5864), your parent or grandparent, or your spouse's 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's 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 the "Transfer/Carryforward of unused amount" section of Schedule NT(S11) to calculate the territorial amount available to transfer, as well as Form T2202, Education and Textbook Amounts Certificate, T2202A, Tuition, Education, and Textbook Amounts Certificate, TL11A, Tuition, Education, and Textbook Amounts Certificate - University Outside Canada, TL11B, Tuition, Education, and Textbook Amounts Certificate – Flying School or Club, or TL11C, Tuition, Education, and Textbook Amounts Certificate - Commuter to the United States, 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 territorial amount you are transferring on line 20 of your Schedule NT(S11).

Tax Tip
If you are transferring an amount to a designated person, only transfer the amount this person can use. That way, you can carry forward as much as possible to use in a future year.

Complete the "Transfer/Carryforward of unused amount" section of Schedule NT(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 these amounts if the rules are met for claiming an amount on line 324 of federal Schedule 1.

Enter on line 5860 the total of all territorial amounts transferred to you that each student designated on his or her Form T2202, T2202A, TL11A, TL11B, or TL11C.

Notes
The student must have entered this amount on line 20 of his or her Schedule NT(S11). He or she may have chosen to transfer an amount that is less than the available territorial amount. The student cannot transfer to you any unused amounts carried forward from a previous year.

If the student was a resident of another province or territory on December 31, 2010, special rules may apply. Call the CRA 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. Read line 324 in the General Income Tax and Benefit Guide.

Supporting documents – If you are filing electronically or filing a paper return, do not send any documents. Keep all your documents in case we ask to see them at a later date. The student must attach Schedule NT(S11) to his or her paper return.

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 NT(S2), Territorial Amounts Transferred From Your Spouse or Common-Law Partner, to calculate your claim. Attach this schedule to your return.

Line 5868 – Medical expenses

The 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 2010 and must not have been claimed on a 2009 return.

Line 5872 – Allowable amount of medical expenses for other dependants

In addition to the medical expenses claimed on line 5868, you can also claim medical expenses for other dependants.

The medical expenses you use to calculate your claim on line 5872 are the same as those used to calculate your federal claim on line 331 of federal Schedule 1. They have to cover the same 12-month period ending in 2010 and must not have been claimed on a 2009 return.

The maximum amount you can claim is $5,000 for each dependant.

Complete the calculation for line 5872 on the Territorial Worksheet to determine your claim.

Line 5896 – Donations and gifts

To calculate your claim on line 5896, enter the amounts from lines 345 and 347 of federal Schedule 9 and multiply them by the rates on lines 26 and 27 of Form NT428.

Step 2 – Northwest Territories tax on taxable income

Enter on line 30 your taxable income from line 260 of your return. Use this amount to determine which one of the four columns you have to complete. Enter this amount on line 31 of the applicable column and complete the calculation.

Step 3 – Northwest Territories tax

Line 39 – Northwest Territories 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 territorial 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.

Line 47 – Northwest Territories additional tax for minimum tax purposes

If you have to pay federal minimum tax as calculated on Form T691, Alternative Minimum Tax, you will have to determine your Northwest Territories additional tax for minimum tax purposes.

To do this, complete the calculation on line 47 of Form NT428. You can find more information on minimum tax in the General Income Tax and Benefit Guide.

Line 49 – Territorial 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 territorial foreign tax credit.

To claim the credit, get Form T2036, Provincial or Territorial Foreign Tax Credit.

Enter, on line 49 of Form NT428, the tax credit amount calculated on line 5 of Form T2036.

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

Lines 51 and 52 – Political contribution tax credit

You can claim this credit if, in 2010, you contributed to a candidate seeking election to the Northwest Territories Legislative Assembly.

How to claim

Enter your total contributions on line 51 of Form NT428, and determine the amount to enter on line 52 as follows:

For contributions of $100 or less, enter the amount of your contributions on line 52 of Form NT428.
For contributions of more than $100 but not more than $900, complete the calculation for line 52 on the Territorial Worksheet.
For contributions of more than $900, enter $500 on line 52 of Form NT428.

Supporting documents – For each contribution, attach to your paper return the official receipt signed by an official agent of the candidate. If you are filing electronically, keep all your documents in case we ask to see them.

Line 54 – Risk capital investment tax credits

Unused risk capital investment tax credits

Any unused tax credits are shown on your most recent notice of assessment or notice of reassessment. Enter any unused credits, up to a maximum of $30,000, from previous years on line 54 of Form NT428 to reduce your 2010 Northwest Territories tax.

Form NT479, Northwest Territories Credit

Lines 1 to 14 – Cost of living tax credit

If you were a resident of the Northwest Territories at the end of the year, you can claim the cost of living tax credit, which may include a supplement for you and your spouse or common‑law partner. If your credit is more than the tax you owe, you will receive a refund for the difference.

If you had a spouse or common-law partner on December 31, 2010, and you and your spouse or common-law partner are eligible for a cost of living tax credit supplement, you and your spouse or common-law partner have to decide which one of you will claim the cost of living tax credit supplement for your family.

As a resident of the Northwest Territories, you or your spouse or common-law partner may have income from a business with a permanent establishment outside the Northwest Territories. If so, enter, on line 1 of Form NT479, the net income allocated to the Northwest Territories from column 4 of Form T2203, Provincial and Territorial Taxes for 2010 - Multiple Jurisdictions.

For more information

If you have questions about the Northwest Territories political contribution or risk capital investment tax credits, or the cost of living tax credit, contact:

Treasury Division
Department of Finance
Government of the Northwest Territories
Post Office Box 1320
Yellowknife NT X1A 2L9

Call: 867-920-3470 or 1-800-661-0820

If you have questions about federal and Northwest Territories personal income tax, or any other tax credits not listed above, visit the CRA Web site or call the CRA at 1-800-959-8281 .

To get forms, go to our Forms and publications page or call 1-800-959-2221 .