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ARCHIVED - Net income

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Line 206 - Pension adjustment

Enter on line 206 the total of all amounts in box 52 of your T4 slips, or box 34 of your T4A slips. Generally, this total represents the value of the benefits you earned in 2004 under a registered pension plan (RPP) or a deferred profit-sharing plan (DPSP).

Do not include the pension adjustment (PA) amount in your income, and do not deduct it on your return. Simply enter this amount on line 206. We will use it to calculate your registered retirement savings plan (RRSP) deduction limit for 2005, which we will show on your Notice of Assessment or Notice of Reassessment for 2004. See "Line 208 - RRSP deduction" for details.

If you have any questions about how your PA was calculated, ask your employer.

Note
 If you live in Canada and you participated in a foreign pension plan in 2004, you may have to enter an amount on this line. For details, contact us.

Line 207 - Registered pension plan (RPP) deduction

Generally, you can deduct the total of all amounts shown in box 20 of your T4 slips, in box 32 of your T4A slips, or on your union or RPP receipts. Contact us or see guide T4040, RRSPs and Other Registered Plans for Retirement , to find out how much you can deduct if any of the following applies:

Receipts - If you are filing a paper return, do not include your receipts (other than your T4 and T4A slips), but keep them in case we ask to see them. If you are filing electronically, keep all of your documents.

Line 208 - RRSP deduction

This section gives general information on registered retirement savings plans. If you need more information after reading this section, get guide T4040, RRSPs and Other Registered Plans for Retirement . See "Schedule 7" later on this page for details about completing Schedule 7. To view your RRSP information, visit our Web site at www.cra.gc.ca/myaccount .

Receipts - If you are filing a paper return, include your official receipts for all amounts you contributed from March 2, 2004, to March 1, 2005, including those you are not deducting on your return for 2004 and those you are designating as Home Buyers' Plan (HBP) or Lifelong Learning Plan (LLP) repayments. See "Lines 6 and 7 - Repayments under the HBP and LLP" for details about HBP and LLP repayments. If you contributed to your spouse or common-law partner's plan, the receipt has to show your name as the contributor and your spouse or common-law partner's name as the annuitant. Also attach Schedule 7 if you have to complete it. If you are filing electronically, keep your documents in case we ask to see them.

Maximum contributions you can deduct

The maximum you can deduct on line 208 is whichever of the following amounts is less:

Notes
 After the end of the year you turn 69, you cannot contribute to your RRSP, and neither can your spouse or common-law partner. However, you still can contribute to your spouse or common-law partner's RRSP until the end of the year he or she turns 69, and you can deduct those contributions as long as you still have an unused RRSP deduction limit.

If you contribute more to an RRSP than you can deduct, you may have to pay a special tax of 1% per month. For more details, see the section called "Tax on overcontributions" in guide T4040, RRSPs and Other Registered Plans for Retirement .

Schedule 7

You may not have to complete Schedule 7. To find out, read the information at the top of the schedule. If you do have to complete it, you will find information below about lines 1, 2, 3, 6, 7, 10, 11, and 15 to 18.

Line 1- Unused RRSP contributions

These are amounts you contributed to your own RRSP or to an RRSP for your spouse or common-law partner after 1990, but did not deduct on line 208 of any previous return or designate as an HBP or LLP repayment. The total of these amounts is shown on your Notice of Assessment or Notice of Reassessment for 2003 if you showed them on a previous year's Schedule 7.

If you do not have your notice, you can find out if you have unused RRSP contributions by using RRSP deduction limit, one of our T.I.P.S. services.

Notes
 If you have unused RRSP contributions that you made from March 4, 2003, to March 1, 2004, you should have filed a completed Schedule 7 with your 2003 paper return. If you did not, you should submit your receipts and a completed copy of a 2003 Schedule 7 to your tax centre, but not with your return for 2004 . See " How do you change a return? " for details.

If you have unused contributions that you made from January 1, 1991, to March 3, 2003, but did not show on a Schedule 7 for 2002 or earlier, contact us.

Lines 2 and 3 - Total RRSP contributions

This total includes amounts you:

Make sure you include on these lines all contributions you made from January 1, 2005, to March 1, 2005, even if you are not deducting or designating them on your return for 2004. Otherwise, we may reduce or disallow your claim for these contributions on your return for a future year.

Do not include the following amounts:

Lines 6 and 7 - Repayments under the HBP and LLP

If you withdrew funds from your RRSP under the Home Buyers' Plan (HBP) before 2003, you have to make a repayment for 2004. If you withdrew funds from your RRSP under the Lifelong Learning Plan (LLP) before 2003, you may have to make a repayment for 2004. In either case, the minimum amount you have to repay for the year is indicated on your Notice of Assessment or Notice of Reassessment for 2003.

To make a repayment for 2004, contribute to your own RRSP from January 1, 2004, to March 1, 2005, and designate your contribution as a repayment on line 6 or 7 of Schedule 7. Do not include an amount you deducted or designated as a repayment on your 2003 return, or that was refunded to you. Do not make your repayment to us. You cannot deduct any RRSP contribution you designate as an HBP or LLP repayment on Schedule 7.

Note
 If you repay less than the minimum amount for 2004, you have to include the difference on line 129 of your return.

Line 10 - RRSP contributions you are deducting for 2004

Your RRSP deduction limit for 2004 is shown on your Notice of Assessment or Notice of Reassessment for 2003, or, if we sent you one, on Form T1028, Your RRSP Information for 2004. You can carry forward indefinitely any part of your RRSP deduction limit accumulated after 1990 that you do not use.

If you do not have your notice or Form T1028, you can find out your limit for 2004 by using RRSP deduction limit, one of our T.I.P.S. services, or by contacting us.

If you would like to calculate your RRSP deduction limit for 2004, get guide T4040, RRSPs and Other Registered Plans for Retirement .

Note
 In a previous year, you may have received income for which you could contribute to an RRSP, but you may not have filed a return for that year. If you want to keep your RRSP deduction limit up to date, you have to file a return for that year.

Line 11 - Transfers

You may have reported income on line 115, 129, or 130 of your return for 2004. If you contributed certain types of this income to your own RRSP on or before March 1, 2005, you can deduct this contribution, called a transfer, in addition to any RRSP contribution you make based on your "RRSP deduction limit for 2004."

For example, if you received a retiring allowance in 2004, you would report it on line 130 of your return. You can contribute to your RRSP up to the eligible part of that income (box 26 of your T4A slip) and deduct it as a transfer. Include the amounts you transfer on lines 2 or 3 and 11 of Schedule 7.

For more information about amounts you can transfer, get guide T4040, RRSPs and Other Registered Plans for Retirement .

Lines 15 to 18 - 2004 withdrawals under the HBP and the LLP

On line 15, enter the total of your HBP withdrawals for 2004 from box 27 of your T4RSP slips. In addition, check the box at line 16 if the address of the home you acquired with these withdrawals is the same as the address on page 1 of your return.

On line 17, enter the total of your LLP withdrawals for 2004 from box 25 of your T4RSP slips. In addition, you can check the box at line 18 to designate that your spouse or common-law partner was the student for whom the funds were withdrawn. If you do not check the box, you will be considered to be the student for LLP purposes. You can change the person you designate as the student only on the return for the year you make your first withdrawal.

The guides RC4135, Home Buyers' Plan (HBP) , and RC4112, Lifelong Learning Plan (LLP) , include more information about:

Line 209 - Saskatchewan Pension Plan (SPP) deduction

You can deduct contributions to the SPP for 2004, up to whichever of the following three amounts is least:

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

Line 212 - Annual union, professional, or like dues

Enter the total of the following amounts related to your employment that you paid (or that were paid for you and included in your income) in the year:

Annual membership dues do not include initiation fees, licences, special assessments, or charges for anything other than the organization's ordinary operating costs. You cannot claim charges for pension plans as membership dues, even if your receipts show them as dues. For more information, get Interpretation Bulletins IT-103, Dues paid to a union or to a parity or advisory committee , and IT-158, Employees' professional membership dues .

The amount shown in box 44 of your T4 slip, or on your receipts, includes any GST/HST you paid.

Tax Tip
You may be eligible for a rebate of any GST/HST you paid as part of your dues (see "Line 457 - Employee and partner GST/HST rebate").

Receipts - If you are filing a paper return, do not include your receipts (other than your T4 slips) but keep them in case we ask to see them. If you are filing electronically, keep all of your documents.

Line 214 - Child care expenses

You or your spouse or common-law partner may have paid for someone to look after your child so one of you could earn income, go to school, or conduct research in 2004. The expenses are deductible only if, at some time in 2004, the child was under 16 or had a mental or physical infirmity. Generally, only the spouse or common-law partner with the lower net income (even if it is zero) can claim these expenses.

For more information, and to make your claim, get Form T778, Child Care Expenses Deduction for 2004 . However, if you claimed child care expenses on your 2003 return, the package we mailed to you should include this form.

Tax Tips
You may be able to claim payments you made to a boarding school, sports school, or camp. For details, get Form T778 .

If your child needs special attendant care or care in an establishment, see guide RC4064, Information Concerning People With Disabilities , for details about different amounts you may be able to claim.

Receipts - If you are filing a paper return, include a completed Form T778, but not your receipts. Keep them in case we ask to see them. If you are filing electronically keep all of your documents.

Line 215 - Disability supports deduction

Under proposed legislation, the deduction for attendant care expenses will now be called disability supports deduction. This deduction includes both attendant care expenses as well as other paid disability expenses such as sign language interpretation services used by individuals who have a speech, or hearing impairment. See guide RC4064, Information Concerning People With Disabilities , for details about the different expenses you may be able to claim.

You can claim expenses you paid for personal attendant care and other disability supports expenses that allowed you to go to school or to earn certain income. This includes income from employment or self-employment and a grant you received for conducting research. However, you cannot claim these expenses at this line if you or someone else will be claiming them as medical expenses at line 330 or 331.

To calculate your claim, complete Form T929, Disability Supports Deduction . For more information, see Form T929 or use Info-Tax, one of our T.I.P.S. services.

Receipts - If you are filing a paper return, do not include your receipts or Form T929 , but keep them in case we ask to see them. If you are filing electronically, keep all of your documents.

Line 217 - Business investment loss

A business investment loss is a special type of capital loss. Such a loss can occur, for example, when you dispose of shares or certain debts of a small business corporation. For more information, and to find out how to complete lines 217 and 228 (to the left of line 217), get guide T4037, Capital Gains .

If you have a tax shelter, see "Tax shelters".

Line 219 - Moving expenses

Generally, you can deduct moving expenses you paid in 2004 if both of the following apply:

Notes
If you moved before 2004 but could not claim all your expenses on your return for that year or later, you may be able to claim the remaining expenses on your return for 2004.

In addition, if you pay expenses after the year of your move, you may be able to claim them on your return for the year you pay them. You may carry forward unused amounts until you have enough income to claim them.

Your deduction is limited to the amount of income you earned at the new location. For more information, and to calculate how much you can deduct, get Form T1-M, Moving Expenses Deduction . Make sure you tell us your new address.

Receipts - If you are filing a paper return, do not include your receipts or Form T1-M , but keep them in case we ask to see them. If you are filing electronically, keep all of your documents.

Line 220 - Support payments made

Enter on line 230 the total of all deductible and non-deductible support payments for a spouse or common-law partner, or for a child, that you made (or, if you are the payee, that you repaid under a court order) in 2004. Claim on line 220 only the deductible amount. Most child support payments paid according to a written agreement or court order dated after April 1997 are not deductible. For more details, get guide P102, Support Payments .

Generally, to be allowed your claim, you should register your written agreement or court order (including any amendments) with us. For more information, get Form T1158, Registration of Family Support Payments .

Receipts - If you are filing a paper return, do not include your receipts or cancelled cheques, or your court order or written agreement. Keep them in case we ask to see them. If you are filing electronically, keep all of your documents.

Line 221 - Carrying charges and interest expenses

You can claim the following carrying charges and interest you paid to earn income from investments:

You cannot deduct on line 221 any of the following amounts:

Policy loan interest - To claim interest you paid during 2004 on a policy loan made to earn income, have your insurer complete Form T2210, Verification of Policy Loan Interest by the Insurer , on or before April 30, 2005.

Refund interest - If we paid you interest on an income tax refund, you have to report the interest in the year you receive it, as we explain at line 121 in this guide. If we then reassessed your return and you repaid any of the refund interest in 2004, you can deduct the amount you repaid, up to the amount you had included in your income.

Carrying charges for foreign income - If you have carrying charges for Canadian and foreign investment income, identify them separately on Schedule 4, according to the percentage that applies to each investment.

Receipts - To make your claim, complete Part IV of Schedule 4. If you are filing a paper return, do not include your receipts or Form T2210, but keep them in case we ask to see them. If you are filing electronically, keep all of your documents.

If you have a tax shelter, see "Tax shelters".

Line 222 - Deduction for CPP or QPP contributions on self-employment and other earnings

You can claim, on this line, half of the total of your Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) contributions, if any, from Schedule 8. You also can claim, on line 310 on Schedule 1, an amount for the other half. You can claim contributions you:

The amount of CPP or QPP contributions that you have to make, or choose to make, will depend on how much you have already contributed to the CPP or QPP as an employee, as shown in boxes 16 and 17 of your T4 slips.

Making additional CPP contributions

You may be able to make CPP contributions on certain employment income for which no contribution was made (for example, tips that were not included on a T4 slip) or additional contributions on T4 income if you had more than one employer in the year and the total CPP contributions on all T4 slips is less than the required amount. For more information, see "Making additional CPP contributions" at line 308.

How to calculate your contributions

Complete Schedule 8 to calculate your CPP or QPP contributions, and attach it to your paper return. If you were a member of a partnership, make sure you include on line 1 of Schedule 8 only your share of the net profit or loss. You cannot use self-employment or partnership losses to reduce the CPP or QPP contributions that you paid on your employment earnings.

If you were not a resident of Quebec on December 31, 2004, enter on lines 222 and 310, in dollars and cents, the amount from line 11 of Schedule 8. Enter on line 421 the amount from line 10 of Schedule 8.

If you were a resident of Quebec on December 31, 2004, enter on lines 222 and 310, in dollars and cents, the amount from line 10 of Schedule 8. Line 421 does not apply to you.

Note
We will prorate your CPP or QPP contribution and show the correct amount on your Notice of Assessment in certain situations, such as if, in 2004, you:

Line 224 - Exploration and development expenses

If you invested in a petroleum, natural gas, or mining venture in 2004, but did not participate actively, you can deduct your expenses on this line. If you participated actively, follow the instructions at line 135.

How to claim

Complete Form T1229, Statement of Exploration and Development Expenses and Depletion Allowance , using the information that the principals of the venture give you, such as T5, T101, or T5013 slips. Make sure you read the instructions on the back of these slips.

Claim your exploration and development expenses (including renounced resource expenses) and your resource allowances on line 224. Claim your depletion allowances on line 232.

Attach Form T1229 and your T5, T101, and T5013 slips to your paper return. If you do not have these slips, attach a statement that identifies you as a participant in the venture. The statement has to show your allocation (the number of units you own, the percentage assigned to you, or the ratio of your units to those of the whole partnership) and give the name and address of the fund.

If you have any questions about these expenses, contact our Business Enquiries service. See "Contacting us".

If you have a tax shelter, see "Tax shelters".

Line 229 - Other employment expenses

You can deduct certain expenses (including any GST/HST) you paid to earn employment income. You can claim the expenses only if your employment contract required you to pay them, and either you did not receive an allowance for the expenses, or the allowance you received is included in your income.

Note
Most employees cannot claim employment expenses. You cannot deduct the cost of travel to and from work, or other expenses, such as most tools and clothing.

Attach to your paper return a completed Form T777, Statement of Employment Expenses , to give us details of your expenses and to calculate how much you can deduct. Guide T4044, Employment Expenses , contains Form T777 and other forms you may need. The guide also explains the limits and conditions that apply when you claim these expenses.

Repayment of salary or wages - You can deduct salary or wages you included in income for 2004 or a previous year, if you repaid them in 2004. This includes amounts you repaid for a period when you were entitled to receive wage-loss replacement benefits or workers' compensation benefits. However, you cannot deduct more than the income you received when you did not perform the duties of your employment.

Legal fees - You can deduct legal fees you paid to collect or establish a right to salary or wages. However, you have to reduce your claim by any amount awarded to you, or any reimbursement you received for your legal expenses. You can only deduct these fees if the salary or wages are taxable.

Receipts - If you are filing a paper return, include Form T777, but not your receipts or other forms. Keep them in case we ask to see them. If you are filing electronically, keep all of your documents.

Tax Tip
You may be eligible for a rebate of any GST/HST you paid as part of your expenses (see "Line 457 - Employee and partner GST/HST rebate").

Line 231 - Clergy residence deduction

If you are a cleric, use this line to claim a deduction for your residence. Your employer has to certify that you qualify for this deduction. Complete Form T1223, Clergy Residence Deduction , to find out what you can deduct.

Receipts - If you are filing a paper return, do not include Form T1223, but keep it in case we ask to see it. If you are filing electronically, keep all of your documents.

Line 232 - Other deductions

Use this line to claim allowable amounts not deducted anywhere else on this return. In the space to the left of line 232, specify the deduction you are claiming. If you have more than one amount, or you want to explain your deduction more fully, attach a note to your paper return.

Receipts - If you are filing electronically, keep all supporting documents for amounts you claim on this line in case we ask to see them.

Note
A child who was born in 1987 or later can claim a deduction for certain income he or she reports. For more details, see "Split income of a child under 18".

If you have a tax shelter, see "Tax shelters".

Income amounts paid back

In 2004, you may have paid back amounts that you received and included in income (other than salary or wages) for 2004 or a previous year. If this applies to you, you can deduct most of these amounts on line 232 of your return for 2004. However, if you repaid, under a court order, support payments that you included on line 128, deduct the repayment on line 220.

Attach to your paper return receipts or other documents showing the amounts you paid back, such as a T4A (OAS) slip that shows in box 20 any Old Age Security benefits you repaid.

Notes
If you had an OAS repayment for 2003, tax may have been withheld from your OAS benefits for 2004. The amount deducted is included in box 22 of your T4A(OAS) slip for 2004. Do not deduct it on line 232. Claim it on line 437 . To make sure the correct amount has been withheld, see " Line 235 - Social benefits repayment " and complete the chart for line 235 on the Federal Worksheet you will find in the forms book.

If you paid back employment income, see "Repayment of salary or wages" under line 229. If you paid back income tax refund interest, see "Refund interest" under line 221.

EI benefits - You may have received more benefits than you should have and already paid them back to Human Resources and Skills Development Canada (HRSDC). For example:

Legal fees

You can deduct your expenses in any of the following situations:

You have to reduce your claim by any award or reimbursements you received for these expenses. If you are awarded the cost of your deductible legal fees in a future year, you will have to include that amount in your income for that year.

For details of other legal fees you may be able to deduct, get Interpretation Bulletin IT-99, Legal and Accounting Fees .

Other deductible amounts

Here are some examples of other amounts that can be deducted at line 232:

Line 235 - Social benefits repayment

Employment Insurance (EI) benefits

You have to repay part of the EI benefits (line 119) you received in 2004 if there is an amount in box 15 of your T4E slip, the rate in box 7 is 30%, and your net income before adjustments (line 234) is more than $48,750.

Complete the chart on your T4E slip to calculate how much of your EI benefits you have to repay. If you also have to repay Old Age Security (OAS) benefits you received (see next section), enter the EI benefits that you have to repay on lines 7 and 13 of the chart for line 235 on the Federal Worksheet in the forms book.

Old Age Security (OAS) benefits

You may have to repay all or a part of your OAS pension (line 113) or net federal supplements (line 146) if your net income before adjustments (line 234) is more than $59,790. Complete the chart for line 235 on the Federal Worksheet in the forms book to calculate how much you have to repay, even if tax was withheld by Social Development Canada.

Note
If you had an OAS repayment for 2003, tax may have been withheld from your monthly OAS pension for 2004. The amount deducted is included in box 22 of your T4A(OAS) slip for 2004. Claim it on line 437. Similarly, if you have an OAS repayment for 2004, tax may be withheld starting with your July 2005 OAS payment. For more details, contact us.

Line 236 - Net income

We use this information to calculate amounts such as the Canada Child Tax Benefit, the GST/HST credit, the social benefits repayment, and certain non-refundable tax credits.

Notes
Make sure you enter, if it applies, your spouse or common-law partner's net income in the "Information about your spouse or common-law partner" area on page 1 of your return. Enter this amount even if it is zero .

If the amount you calculate for line 236 is negative, you may have a non-capital loss. To find out, use Form T1A, Request for Loss Carryback . If you have a loss for 2004, you may want to carry it back to your 2001, 2002, or 2003 return. To do this, attach a completed Form T1A to your paper return (or send one to us separately). Do not file an amended return for the year or years to which you want to apply the loss.

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