Information for non-residents and deemed residents of Canada

1995 GENERAL INCOME TAX GUIDE

WHAT'S NEW FOR 1995?

We have outlined the major changes below. For more details on these and other changes for 1995, see the areas highlighted in blue throughout this guide.

COMPLETING YOUR RETURN

A number of changes have been made to this package to reduce costs, save paper, and enhance service.

Tax tables - This package no longer includes the tax tables. You now calculate your federal tax and surtax for non-residents and deemed residents of Canada using the new Schedule 1, Federal Tax Calculation, included with this package.

Internet access - Our publications are now on-line. However, we will not accept or send client communications over the Internet because of confidentiality and security. Our addresses are: gopher://gopher.revcan.ca, ftp://ftp.revcan.ca, or http://www.revcan.ca.

Direct deposit - You can now ask to have your income tax refund, GST credit, or Child Tax Benefit payments directly deposited into your account at a financial institution in Canada by completing the area on page 4 of your return.

Form T1 CSB - We have replaced this form with charts in the guide at line 121.

Repayments under the Home Buyers' Plan - You will need to complete Schedule 7, RRSP Unclaimed Contributions, Transfers, and Designations of Repayments under the Home Buyers' Plan, to designate your repayments.

Symbols - To help you easily identify the information in this guide that applies to your situation, we have created a system of symbols. We have placed the applicable symbol at each line number in this guide. See page 4 for details.

LINE-BY-LINE CHANGES

Age amount (line 301) - If your net income is $49,134 or more, you cannot make this claim.

This guide and return package includes the following income tax changes that have been announced, but were not law at the time of printing. Once they become law, they will be effective as of the dates indicated below.

Mortgage foreclosures and conditional sales repossessions (line 127) - If, after 1991, you realized a capital gain as a result of a mortgage foreclosure or a conditional sales repossession, the capital gain is excluded when calculating your claim for the GST credit, Child Tax Benefit payments, age amount, and child tax credit.

Self-employment income (lines 135 to 143) - For fiscal periods beginning after 1994, the rules for reporting your self-employed income have changed. In addition, the filing deadline for individuals with certain types of self-employment income will be changed to June 15, 1996.

Generally, if you are the spouse of a self-employed individual, your filing deadline will also be changed to June 15, 1996.

RRSP overcontribution limit (line 208) - Starting in 1996, the $8,000 tolerance for overcontributions to an RRSP will be reduced to $2,000. For more details, get a copy of the income tax guide called RRSP and Other Registered Plans for Retirement.

Transfer of retiring allowances (line 208) - Starting in 1996, you will no longer be able to transfer to your own RRSP any part of your retiring allowance for years of service after 1995. The income tax guide called RRSP and Other Registered Plans for Retirement gives more details on the income that is eligible for transfer.

Repayment of Old Age Security (OAS) pension benefits (line 235) - Starting in July 1996, the amount of your monthly OAS pension will be reduced if your 1995 net world income is more than $53,215.

Blind or visually impaired persons can get this publication in braille and large print, and on audio cassette and computer diskette. To order in Canada, please call 1-800-267-1267 weekdays between 8:15 a.m. and 5:00 p.m. (Eastern Time). From outside Canada, call the International Tax Services Office.

La version française de cette publication est intitulée Guide d'impôt général 1995 (Renseignements pour les non-résidents et les résidents réputés du Canada).

Where do you find

Accounting fees
After you file
Age amount
Alimony or maintenance
Amounts for infirm dependants age 18 or older
Amounts transferred from your spouse
Annuity payments
Attendant care expenses

Balance owing
Basic federal tax
Basic personal amount
Before you start

Canada or Quebec Pension Plan benefits
Canada or Quebec Pension Plan contributions
Canada Savings Bonds
Capital gains and capital gains deduction
Carrying charges
Charitable donations
Child care expenses
Child Tax Benefit
Commissions
Crown, ecological and government gifts

Death benefits
Deemed residents
Direct deposit
Disability amount
Dividends
Dividend tax credit

Education amount
Employment expenses
Employment income
Equivalent-to-spouse amount

Federal individual surtax
Federal tax
Filing date
Filing your return
Foreign tax credit

Goods and services tax credit

Home Buyers' Plan

Income that is not taxed
Instalment payments
Interest and other investment income
Interest expenses
Interest on refunds and balances owing
Investment tax credit

Labour-sponsored funds tax credit
Late-filing penalty
Legal fees
Loans and transfers of property
Losses

Maintenance or alimony
Medical expenses
Minimum tax
Moving expenses

Net federal supplements
Non-refundable tax credits
Non-residents
Northern residents deductions

Old Age Security pension
Overseas employment tax credit

Partnership income - Limited or non-active
Pension income amount
Pension or superannuation income
Pensions from a foreign country
Political contributions

Refunds
Registered education savings plan income
Registered pension plan contributions
Registered retirement income fund income
Registered retirement savings plan contributions and income
Rental income
Repaying income amounts
Research grants
Residential ties
Retiring allowances (severance pay)

Safety deposit box charges
Saskatchewan Pension Plan contributions and income
Scholarships
Self-employment income
Social assistance payments
Social benefits repayment
Spousal amount
Spouse - Definition
Step 1 - Identification
Step 2 - Goods and services tax (GST) credit
Step 3 - Total income
Step 4 - Taxable income
Step 5 - Non-refundable tax credits
Step 6 - Refund or Balance owing
Surtax for non-residents and deemed residents of Canada

Tax deducted per information slips
Transfer of amounts from dependants
Tuition fees

Unemployment Insurance benefits
Unemployment Insurance premiums
Union, professional, or like dues
United States social security benefits

Vow of perpetual poverty
Wage-loss replacement plans
War veterans' allowances
Workers' Compensation payments

LET US BE YOUR GUIDE …

In this guide we give you information on the income you need to report and the deductions and credits you may be able to claim when completing your tax return. We also help you determine your taxes payable and any refund to which you are entitled.

YOU DON'T NEED TO READ THE WHOLE GUIDE!

Using symbols, we will lead you directly to the information that may relate to your situation. Before you start:

• read "Should you use this tax package?" on page 5;
• read the general information on pages 5 to 8;
• determine whether you are a non-resident or a deemed resident of Canada;
• locate the symbol (see below) that applies to you; and
• follow that symbol throughout the guide as you complete your tax return.

Just follow the symbol that applies to you… (For the purpose of PEIB, LOOK FOR THE DEFINITION)

CIRCLE = for deemed residents

VERTICLE BAR = for non-residents

TRIANGLE = for non-residents electing under section 217 of the Income Tax Act

Each line number in this guide corresponds to the same line number on your tax return. We have placed the applicable symbols at each line number throughout the guide. If the symbol that applies to your situation is shown, you should read the information. If it is not shown, the information does not apply to your situation.

Note
The symbols are for reference only. If the symbol that applies to your situation is indicated at a line number, it does not mean that everything at that line number applies to you. Also, remember that the information in this guide applies only to the individuals who are listed on page 5 under the heading "Should you use this tax package?"

DID YOU KNOW …
You can get general and personal tax information from our automated Tax Information Phone Service (T.I.P.S.). For more details on this service, see the T.I.P.S. information included with this package.

DIRECT DEPOSIT

Why not have your income tax refund, your GST credit, and your Child Tax Benefit payments deposited directly into your account at a financial institution in Canada? For details, see page 38 of this guide.

YOU CAN BE AMONG THE MORE THAN ONE MILLION PEOPLE USING DIRECT DEPOSIT

BEFORE YOU START

DO YOU HAVE TO FILE A TAX RETURN?

You have to file a 1995 income tax return if you have a balance owing for 1995, or if any of the following apply to you:

• You want to claim a refund or refundable tax credits.
• You want to apply for the goods and services tax credit.
• You or your spouse want to receive Child Tax Benefit payments (both spouses must file a return).
• We sent you a request to file a return.
• You sold or disposed of capital property in 1995, such as real estate or shares, either at a gain or a loss.
• You claimed a capital gains reserve on your 1994 return.
• You have to pay back all or part of your Old Age Security or Unemployment Insurance benefits.
• You have to contribute to the Canada Pension Plan because you earned more than $3,400 in net self-employment income or other pensionable income, or both, in 1995. See line 310 for details.
• You filed Form NR6, Undertaking to File an Income Tax Return by a Non-Resident Receiving Rent from Real Property or Receiving a Timber Royalty, for 1995. If this is your situation, you have to file a return electing under section 216 of the Income Tax Act.
• You filed Form NR5, Application by a Non-Resident of Canada for a Reduction in the Amount of Non-Resident Tax Required to be Withheld, for 1995.

SHOULD YOU USE THIS TAX PACKAGE?

Use this package if any of the following apply to you:

• You were a deemed resident of Canada (see definition on next page) during 1995. For exceptions, see the following section called "What if you can't use this package?"
• You were a non-resident (see definition on this page) during 1995, and you are reporting Canadian-source income other than from employment in Canada or from a business with a permanent establishment in Canada.
• You were a non-resident during 1995, who received certain types of Canadian-source income (such as alimony and maintenance payments, and certain pension benefits) and you are electing to pay tax on it at the same rate that residents of Canada pay. You will also need the pamphlet called Electing Under Section 217 of the Income Tax Act, for the special rules that apply to you.
• You were a non-resident during 1995 who received Canadian-source rental income or timber royalties, and you are filing a separate return to pay tax on this income at the same rate that residents of Canada pay. You will also need the leaflet called Electing under Section 216 of the Income Tax Act, for the special rules that apply to you.

WHAT IF YOU CAN'T USE THIS PACKAGE?

• If you were a non-resident in 1995, and you are reporting income from employment in Canada, or from a business with a permanent establishment in Canada, use the tax package for the province or territory where you earned the income.
• If you were a deemed resident who is reporting only Canadian-source income from a business with a permanent establishment in a province or territory, use the package for that province or territory.
• If you were a deemed resident who returned to Canada during 1995, use the tax package for the province or territory where you lived on December 31, 1995.
• If you lived outside Canada during 1995, but you maintained residential ties (see definition below) in Canada, you are considered to be a factual resident of Canada. Use the tax package for the province or territory where you kept your residential ties.
• If you were a newcomer to Canada in 1995, use the tax package for the province or territory where you lived on December 31, 1995. You should also get the pamphlet called Newcomers to Canada for the special rules that apply to you.
• If you emigrated from Canada during 1995, use the tax package for the province or territory where you lived on the date you left. You should also get the pamphlet called Emigrants and Income Tax for the special rules that apply to you.

Contact the International Tax Services Office for the tax package you need. You will find the address and telephone numbers included with this package.

ARE YOU A NON-RESIDENT?

You are a non-resident of Canada for tax purposes if you have not established residential ties in Canada, and you:

• stayed in Canada for less than 183 days in 1995; or
• lived outside Canada throughout 1995.

As a non-resident, you are subject to tax in Canada only on your Canadian-source income.

If you received certain types of Canadian-source income (such as interest and dividends), the payer will usually withhold tax. Since this withholding tax is your final tax obligation to Canada, you do not have to include this income on your tax return. If the payer did not withhold tax on the income, you should inform the payer that you are a non-resident and that tax should be withheld. For more information, get Information Circular 77-16, Non-Resident Income Tax.

WHAT ARE RESIDENTIAL TIES?

Residential ties include a home in Canada, a spouse or dependants who stayed in Canada while you were living outside Canada, and personal property in Canada. Other ties that may be relevant include social ties in Canada, a Canadian driver's license, Canadian bank accounts or credit cards, and provincial or territorial hospitalization insurance coverage. For more details, contact us.

ARE YOU A DEEMED RESIDENT?

You are a deemed resident of Canada for tax purposes if you stayed in Canada for 183 days or more during 1995, and you did not establish residential ties (see definition on page 5) in Canada.

You are also a deemed resident if you lived outside Canada during 1995, you did not have residential ties in Canada, and you were:

• a member of the Canadian Forces at any time in 1995;
• a member of the Canadian Forces overseas school staff who chooses to file a return as a deemed resident (if you left Canada during 1995, see "Were you a member of the overseas Canadian Forces school staff who left Canada in 1995?" in this section);
• a federal or provincial government employee who either resided in Canada just before being posted abroad or received a representation allowance for 1995;
• a person working under a Canadian International Development Agency (CIDA) assistance program, if you were a resident of Canada at any time during the three-month period just before you began your duties abroad;
• a resident of Canada in a previous year and you lived with, and were the spouse of a person described above, at any time during 1995; or
• a dependent child of one of the first four persons described above, and your net income in 1995 was less than $6,457.

As a deemed resident, you are subject to tax in Canada on your world income, which includes all Canadian and foreign income you received or earned in 1995.

Were you a member of the overseas Canadian Forces school staff who left Canada in 1995?

If you were and you severed your residential ties, you are an emigrant. If this is your situation, you should use the income tax package for the province or territory where you lived just before you left Canada. You should also get the pamphlet called Emigrants and Income Tax, for the special rules that apply to you.

However, if you wish, you can file as a deemed resident of Canada while you are serving abroad. If you make this choice, you should use the income tax package for the province or territory where you lived just before you left Canada. In future years, you will use the income tax package for non-residents and deemed residents of Canada.

Did you live in Quebec just before you left Canada?

If so, even though we may consider you to be a deemed resident of Canada, under Quebec law you may be considered to be a factual resident of that province. If this is the case, you may be subject to Quebec income tax while you are serving abroad.

To avoid double taxation (federal non-resident and deemed resident surtax plus Quebec income tax), attach a note to your return telling us that you are filing a Quebec provincial tax return, and that you are asking for relief from the federal non-resident and deemed resident surtax.

FILING YOUR RETURN

First, gather everything you will need to complete your return. This includes all the information slips (such as T3, T4, T4A, and T5 slips) you received, as well as receipts for any deductions or credits you plan to claim.

When you come to a line on the return that applies to you, look it up in this guide or see the back of your information slips. You will find an explanation that tells you how to complete each line on the return.

WHAT DATE IS YOUR 1995 RETURN DUE?

Generally, your 1995 income tax return is due on or before April 30, 1996. Use the envelope included with this return.

Self-employed persons - Under proposed legislation, if you were carrying on a business in 1995 (unless the expenditures of the business are primarily in connection with tax shelter investments), your 1995 income tax return is due on or before June 15, 1996. In addition, if you are the spouse of an individual carrying on a business, your 1995 income tax return will also be due on or before June 15, 1996. However, if you owe tax for 1995, you still have to pay your balance owing by April 30, 1996.

Non-residents electing under section 217 - Your 1995 section 217 return is due on or before June 30, 1996.

Non-residents electing under section 216 - Your 1995 section 216 return is due on or before December 31, 1997. However, if you filed a Form NR6, Undertaking to File an Income Tax Return by a Non-Resident Receiving Rent from Real Property or Receiving a Timber Royalty, your 1995 section 216 return is due on or before June 30, 1996.

Deceased persons - If you are the legal representative (executor or administrator) of a person who died, you have to file a 1995 return for that person. You should also be aware that the dates mentioned throughout this guide for filing, payments, penalties, and interest, may be different for a 1995 return for someone who died. For details, get the income tax guide called Preparing Returns for Deceased Persons, and the T3 Guide and Trust Return.

WHAT HAPPENS IF YOU FILE YOUR RETURN LATE?

If you owe tax for 1995 and do not file your 1995 return by the due date, we will charge you a late-filing penalty. The penalty is 5% of your balance owing for 1995, plus 1% of your balance owing for each full month (to a maximum of 12 months) that your return is late. Your late-filing penalty may be higher if we charged you a late-filing penalty on a previous return.

Even if you cannot pay the full amount you owe by April 30, 1996, you can avoid this penalty by filing your return on time. We may waive this penalty and any interest if you file your return late because of certain circumstances beyond your control. If this happens, include a letter with your return giving the reasons why you filed your return late. Information Circular 92-2, Guidelines for the Cancellation and Waiver of Interest and Penalties, gives details on the circumstances.

Non-residents electing under section 217 - If you file your return after the due date, this election is not valid.

Non-residents electing under section 216 - If you file your return after the due date, this election is not valid. If you have filed Form NR6, your gross rental income will be subject to full non-resident tax. If the correct amount of tax was not withheld at source, you will receive an assessment of tax.

WHEN WILL WE PAY OR CHARGE INTEREST?

We will pay you compound daily interest on your 1995 income tax refund, starting on the latest of:

• June 15, 1996;
• the 46th day after you file your return; and
• the date you overpaid your taxes.

If you have a balance owing for 1995, we charge compound daily interest from April 30, 1996, on any unpaid amount owing for 1995. This includes any balance owing if we reassess your return, and any penalty we may charge you.

WHAT DO YOU INCLUDE WITH YOUR RETURN AND WHAT RECORDS DO YOU KEEP?

Include one copy of each of your information slips when you file your return. Your tax return, the guide explanations, the forms, or the schedules will tell you when to attach a certificate, form, schedule, or official receipt to your return. If you make a claim without the required receipt, certificate, schedule, or form, we may disallow your claim. This could also delay the processing of your return. Even if you do not have to attach certain receipts to your return, keep them in case we select your return for review. Generally, you should keep your receipts for six years.

You should also keep a copy of your 1995 return, the related Notice of Assessment, and, if applicable, the Notice of Reassessment. These can help you complete your 1996 return. For example, your Notice of Assessment for 1995 will give information such as your 1996 RRSP deduction limit, your unclaimed RRSP contributions for 1996, and your non-capital loss carry-forward balance.

Non-residents - You also need to include a statement of your world income for 1995 (i.e. income you earned from sources inside and outside Canada). Report all amounts in Canadian dollars. Although you do not have to pay tax on income from outside Canada, we need to know this income to determine your non-refundable tax credits.

WHAT IF YOU ARE MISSING INFORMATION?

You should wait until you get all your receipts and information slips before sending in your return. However, if you have to file a 1995 return, as explained on page 5, be sure to file it by the due date, even if some slips or receipts are missing. Attach a note to your return saying which ones are missing and what you are doing to get them.

You should receive most of your information slips by late March or early April.

Missing information slip - If you have not received an information slip by late March, contact the issuer. However, you may not receive a T5 slip for an amount under $50. Even if you are missing an information slip, you still have to report the income when you file your return. For example, if you know that you will not be able to get your T4 slip by April 30, use your pay stubs to calculate your income and the amounts your employer has deducted (such as Canada or Quebec Pension Plan contributions, Unemployment Insurance premiums, union dues, and income tax).

Attach to your return a note explaining the problem and, if possible, attach a photocopy of your pay stubs. The note should also give the payer's name and address, and the amounts you have calculated.

HOW DO YOU REPORT FOREIGN INCOME AND OTHER AMOUNTS?

If you are a deemed resident, report foreign income and other amounts (such as foreign taxes and expenses paid) in Canadian dollars. You can calculate how much to report by multiplying your foreign income or expense by the exchange rate that was in effect on the day you received the income or paid the expense. If the amount was paid at various times throughout the year, you can contact us to get an average annual rate.

WHAT IF YOU NEED HELP?

In this guide, we have used plain language to explain the most common income tax situations. If you need more help after reading this guide, please contact the International Tax Services Office.

We have other income tax guides and pamphlets that you may find helpful, and which include many of the related forms you will need. If we have a guide or pamphlet on a particular topic, we mention it at the line instructions for that topic. We may also refer to interpretation bulletins and information circulars which give even more detailed information on specific tax topics. Contact us if you would like any of our publications.

In addition, if you have access to the Internet, our publications are now on-line. Our addresses on the Internet are: gopher://gopher:revcan.ca, ftp://ftp.revcan.ca, or http://www.revcan.ca.

Note
You may receive some of our guides in the mail by mid-March depending on the type of income you reported and the deductions or credits you claimed on your 1994 tax return.

AFTER YOU FILE

WHEN CAN YOU EXPECT YOUR REFUND?

We can usually process your return in four to six weeks. If you filed your return on or before April 15, wait four weeks before you call. If you filed your return after April 15, wait six weeks before you call.

To find out about your refund call T.I.P.S. (Telerefund), one of our automated T.I.P.S. services. Telerefund will tell you the status of your 1995 refund. You can also get this information by calling the International Tax Services Office.

WHAT HAPPENS TO YOUR RETURN AFTER YOU MAIL IT?

When we receive your return, we usually do a limited review based on the information provided on your return, and send you a Notice of Assessment based on that review. However, in some cases, we may select your return for a more detailed review before we assess it. Therefore, we may contact you to provide documentation to verify the deductions or credits you have claimed. In other cases, after we have assessed your return, we may select your return to verify the income you have reported, or the deductions or credits you have claimed.

YOU WOULD LIKE TO CHANGE YOUR RETURN - WHAT SHOULD YOU DO?

If you have already sent in your return and you need to make a change to it, send any supporting documentation and one of the following to the International Tax Services Office:

• a completed Form T1-ADJ, T1 Adjustment Request, which you can get from us; or
• a letter providing all the details, including your social insurance number, address, a telephone number where we can reach you during the day, and the taxation years you want us to adjust.

Do not file another return for the taxation year you want adjusted. You may be able to obtain a refund for taxation years as far back as 1985. It usually takes eight weeks before we mail you a Notice of Reassessment.

Note
If you did not provide supporting documentation for your original claim, you have to submit this documentation for both your original claim and the changes you want to make.

DO YOU HAVE TO PAY YOUR 1996 TAXES BY INSTALMENTS?

If your tax payable (line 435 of your return) exceeds the total of your income tax deducted at source and your refundable tax credits by more than $2,000 ($1,200 if you resided in Quebec) for 1996 and for either of 1995 or 1994, you may have to pay your 1996 tax by instalments. If our records show that you should pay your taxes by instalments, we will send you an advance Instalment Reminder suggesting the amount you should pay and telling you the date the payment is due.

If you need more information about instalment payments, or instalment interest charges, get the pamphlet called Paying Your Income Tax by Instalments. If you would like to calculate your instalment payments, get Form T1033-WS, Instalment Payment Calculation Worksheet. You can get the pamphlet and worksheet from us.

YOU MOVED - WHAT SHOULD YOU DO?

If you move, let us know your change of address as soon as possible. We can then send any GST credit or Child Tax Benefit payment to which you are entitled to your new address. If you use direct deposit and your move has resulted in a change to your bank account, be sure to advise us of your new account. We also need to know your new address to mail you your tax return for next year.

You can change your address by calling, writing, or visiting us. If you are writing, send your letter to the International Tax Services Office. Be sure to sign the letter and include your social insurance number. If you are writing for other persons, make sure you include their social insurance numbers and have each of them sign the letter authorizing the change to their records.

CAN YOU FILE A RETURN AND CLAIM A REFUND FOR A PREVIOUS YEAR?

You can file a return (other than to make an election under section 216 or section 217) to claim a refund for the 1985 taxation year or any year after that. If you are filing a return for a year before 1995, make sure you attach receipts for all the deductions or credits you are claiming.

WHAT IS A VOLUNTARY DISCLOSURE?

If you have never filed an income tax return, stopped filing a return for two or more years, or if you have sent us a return that was incomplete, we encourage you to voluntarily file or correct your return. We will assess or reassess your return without applying a penalty. You will then only have to pay the tax owing, and the interest due, on the income you report. For more information, get Information Circular 85-1, Voluntary Disclosures, from us.

STEP 1 - IDENTIFICATION

It is important that you complete the entire Identification area of your return. We need this information to calculate your goods and services tax (GST) credit, and any benefit you may be entitled to under the Child Tax Benefit Program.

If you provide incomplete or incorrect information, the processing of your return, and any refund, credit, or benefit to which you may be entitled will be delayed.

Label - If you have a personalized identification label, attach it to your return. If your name or address is incorrect, put a line through the wrong information, and print your changes on the label. For any other correction, make your change in the appropriate area on your return.

Social insurance number (SIN) - We need your SIN so that we can assess your return. If you do not have a SIN, apply for one through any Canada Employment Centre. If you are a non-resident who cannot get a SIN, attach a note to your return to let us know, and we will assign you a temporary taxation number.

You have to give your SIN to anyone who prepares a tax information slip (such as a T3, T4, T5, or T600 slip) for you. If you do not give your SIN, you may have to pay a $100 penalty each time you do not provide it.

Spouse - The term spouse used throughout this guide applies to a legally married spouse and a common-law spouse. A common-law spouse is a person of the opposite sex who, at that particular time in 1995, lived with you in a common-law relationship, and:

• had been living with you in such a relationship for at least 12 continuous months, or had previously lived with you in such a relationship for at least 12 continuous months (when you calculate the 12 continuous months, include any period of separation of less than 90 days); or
• is the natural or adoptive parent (legal or in fact) of your child.

Once either of these two situations applies, we consider you to have a common-law spouse, except for any period that you were separated for 90 days or more because of a breakdown in the relationship.

Example 1

On May 1, 1992, Bruce and Kimberly, who have no children, began to live together in a common-law relationship. On July 15, 1993, they separated because of a breakdown in their relationship. On February 27, 1995, they began to live together again. We consider Bruce and Kimberly to be spouses as of February 27, 1995, the date they reconciled. This is because they once lived together in a common-law relationship for 12 continuous months.

Example 2

Cliff and Sandra, who have no children, have been living together in a common-law relationship since April 13, 1994. However, for the months of July 1994 and October 1994 they lived apart because of a breakdown in their relationship. We consider Cliff and Sandra to be spouses as of April 13, 1995. When calculating the 12 continuous months requirement, they have to include the two months they lived apart because each period of separation was less than 90 days.

Province of residence - Enter "other" as the province of residence where you lived on December 31, 1995.

Self-employed - If you are a deemed resident who was self-employed in 1995, enter the province or territory where your business was located. Only enter a province or territory if you had a permanent business establishment there.

STEP 2 - GOODS AND SERVICES TAX (GST) CREDIT

To apply for, or to continue to receive, a GST credit, you have to complete Step 2 on your 1995 tax return. However, before doing so, be sure to read all of the information in this section.

If you apply, we will let you know in July 1996 the amount to which you are entitled, and how we calculated your credit. If you qualify, we will send you quarterly payments in July and October 1996, and January and April 1997.

WHO CAN APPLY

You can apply for the GST credit if, at the end of 1995, you were a deemed resident of Canada and you:

• were 19 years of age or older;
• had a spouse; or
• were a parent.

Note
If you have a spouse, only one of you can apply for the credit. No matter which one of you applies, the credit will be the same.

WHO CANNOT APPLY

You cannot apply for the GST credit if, at the end of 1995, you:

• were a non-resident of Canada;
• were in a prison or a similar institution, and had been there for more than six months during 1995; or
• did not have to pay tax in Canada because you were an officer or servant of another country, such as a diplomat, or a family member or an employee of that diplomat.

NUMBER OF CHILDREN

You can claim a GST credit for each of your children who was under 19 years of age at the end of 1995, if the child:

• did not have a spouse;
• was not a parent; and
• either lived with you at the end of 1995, or was claimed as a dependant (line 305 or 306) only by you or your spouse.

Only one person can claim a GST credit for a particular child.

NET INCOME OF SPOUSE

Your spouse's net income is the amount from line 236 of your spouse's return, or the amount that would appear on this line if your spouse completed a return.

INCOME LIMIT

In the chart that follows, look up the number of children you have. If your net family income is less than the income limit shown across from the number of your children, you should apply for the credit. Your net family income is the total of your net income and, if applicable, your spouse's net income.

Number of children	Income limit
0	$34,000
1	$36,000
2	$38,500
3	$40,500
4	$42,500
5 or more	apply

Note

These income limits are only a guideline to help you decide if you should apply. If you apply but are not entitled to a credit because your net family income is too high, we will let you know in July 1996.

CALCULATING YOUR GST CREDIT

We will calculate your GST credit using the information on your return. Therefore, make sure you complete all the areas of the return that apply to you.

If you would like to do your own calculation, you can use the information that follows:

Basic credit $199

Credit for your spouse $199

Credit for a child under 19 for whom you can claim an equivalent-to-spouse amount $199

Credit for each child under 19 for whom you did not claim an equivalent-to-spouse amount $105

If you do not have a spouse and your net income is more than $6,456, you may be entitled to an additional credit. The additional credit equals $105 or 2% of your net income that is more than $6,456, whichever is less.

If your net family income is more than $25,921, reduce your total credit by 5% of your net family income that is more than this amount.

STEP 3 - TOTAL INCOME

If you are a deemed resident, most of the amounts you received in 1995 are taxable and you have to include them in income. This includes amounts from employment, pensions, self-employment, and other sources.

Whether you are a deemed resident or a non-resident, some amounts you may have received in 1995 are not taxed. Do not include the following in your income:

• your GST credit and Child Tax Benefit payments;
• any lottery winnings or an inheritance;
• compensation received from a province or territory if you were a victim of a criminal act or a motor vehicle accident;
• any veterans' disability and dependants' pension payments;
• your war veterans' allowance or;
• allowances for newborn children received from the Régie des rentes du Québec, or Quebec family allowances.

Note
Earnings on any of the above amounts are taxable (such as interest you earn when you invest lottery winnings).

LINE 101 - EMPLOYMENT INCOME (For deemed residents)

Enter the total of amounts shown in box 14 of all your T4 slips. If you have not received your T4 slip by late March, or if you have any questions about an amount on a slip, contact your employer.

If you have employment expenses, see line 229 for details.

Tax Tip

Your contributions to the Canada or Quebec Pension Plans (boxes 16 or 17 of your T4 slips) determine the amount of benefits you will receive under either of these plans. If there are no contributions in boxes 16 or 17 of your T4 slips, or if you have any questions about the amount of your contributions, contact your employer.

LINE 102 - COMMISSIONS (For deemed residents)

Enter the total commissions you received as an employee from box 42 on all your T4 slips. This amount is already included in your income on line 101, so do not add it again when you calculate your total income on line 150.

If you have commission expenses, see line 229 for details.

If you are a self-employed commission salesperson, get the income tax guide called Business and Professional Income to determine how to report your commission income and claim your expenses.

LINE 104 - OTHER EMPLOYMENT INCOME (For deemed residents, for non- residents and for non-residents electing under section 217 of the Income Tax Act)

Enter your total employment income not reported on a T4 slip, such as tips, gratuities, directors' fees, and foreign employment income.

Tax Tip

You may be able to contribute to the Canada or Quebec Pension Plan for tips and gratuities you received. See line 308 for details.

Also, enter on this line the total of:

• royalties from a work or invention of yours;
• amounts you received under a supplementary unemployment benefit plan (a guaranteed annual wage plan);
• amounts allocated to you under a profit-sharing plan (box 35 of your T4PS slip);
• net research grants;
• the taxable part of income-maintenance insurance-plan payments, such as income from a wage-loss replacement plan; and
• certain goods and services tax (GST) rebates and Quebec sales tax (QST) rebates.

Research grants - Subtract your expenses from any research grant you received and enter the net amount on this line. Your expenses cannot be more than the grant you received. Attach to your return a list of your expenses. For details, get Interpretation Bulletin IT-75, Scholarships, Fellowships, Bursaries, Prizes, and Research Grants.

Wage-loss replacement plans - Box 28 of your T4A slip shows the payments you received from these plans. There should also be a note on the slip identifying them. You may not have to report the full amount on your tax return. You can reduce the payments you received by the contributions you made to the wage-loss replacement plan after 1967, if you did not claim the contributions on a previous year's return. For more information, get Interpretation Bulletin IT-428, Wage-Loss Replacement Plans.

GST and QST rebates - If you are an employee who received a GST or QST rebate in 1995:

• include on line 104 the rebate you received for employment expenses you paid and deducted; and
• get the income tax guide called Employment Expenses for details on how to report a rebate for a vehicle or musical instrument you bought.

LINE 113 - OLD AGE SECURITY PENSION (For deemed residents and for non- residents electing under section 217 of the Income Tax Act)

Enter your net Old Age Security (OAS) pension from box 18 of your T4A(OAS) slip. If you also received a T4A(P) slip with an amount in box 24, add this amount to the amount in box 18 on your T4A(OAS) slip. Then enter the total on line 113.

Do not enter the amount in box 21 of your T4A(OAS) slip on line 113. For details on how to report this income, see line 146.

If you do not have your T4A(OAS) or T4A(P) slip, contact the Income Security Programs office of Human Resources Development Canada.

Note
If your net income before adjustments (line 234) is more than $53,215, you may have to repay all or a part of your OAS benefits. See line 235 for details.

LINE 114 - CANADA OR QUEBEC PENSION PLAN BENEFITS (For deemed residents and for non-redsidents electing under section 217 of the Income Tax Act)

Enter on line 114 the total Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) benefits shown in box 20 of your T4A(P) slip. The amount in box 20 is the total of the amounts in boxes 14 to 18. If your T4A(P) slip has an amount in box 16, 17, or 18, read the part of this section that applies to you.

CPP OR QPP DISABILITY BENEFIT (BOX 16)

Enter on line 152, located to the left of line 114, the amount of your CPP or QPP disability benefits from box 16. This amount is already included in your income on line 114, so do not add it again when you calculate your total income on line 150.

If you received a lump-sum CPP or QPP disability benefit in 1995, you have to enter the full amount on line 114. The benefit or part of the benefit you received may be for a year or years before 1995. If the part that relates to a previous year or years is $300 or more, it may be more beneficial for you to have this income taxed as if you had received it in the previous year or years. We will automatically apply the tax calculation that benefits you most. We will tell you the results on your Notice of Assessment or Notice of Reassessment.

CPP OR QPP CHILD BENEFIT (BOX 17)

Report a child benefit only if you received it because you were the child of a deceased or disabled contributor. Any benefits paid for your children are their income, even if you received the payment.

CPP OR QPP DEATH BENEFIT (BOX 18)

If you receive a CPP or QPP death benefit, you can choose to report it either on line 114 of your own return, or on a Trust Income Tax and Information Return for the estate of the deceased person. The taxes payable on a CPP or QPP death benefit may be different depending on which return you use. For more information, get the income tax guide called T3 Guide and Trust Return.

LINE 115 - OTHER PENSIONS OR SUPERANNUATION (For deemed residents and for non-residents electing under section 217 of the Income Tax Act)

Enter on this line any other pensions or superannuation you received (box 16 on T4A slips and box 31 on T3 slips). If you received any lump- sum income (box 18 of your T4A slip or box 22 of your T3 slip), report it on line 130.

You may also have to report on this line other amounts that you received. Read the parts of this section that correspond to the type of income you have. The section is divided as follows: Annuity payments and Pensions from a foreign country.

Tax Tip

If you have to report your pension or annuity payments on line 115, you may be able to claim the pension income amount. See line 314 for details.

ANNUITY PAYMENTS

You may have received annuity payments from:

• general annuities or income-averaging annuity contracts (box 19 on T5 slips and box 24 on T4A slips);
• deferred profit-sharing plans (box 28 on T4A slips); or
• registered retirement income funds (box 16 and box 20 on T4RIF slips). If there is also an amount in box 24 of your T4RIF slip, get the income tax guide called RRSP and Other Registered Plans for Retirement.

Report your annuity payments as follows:

• If you were 65 or older on December 31, 1995, enter them on line 115.
• If you received them at any age because your spouse died, enter them on line 115.
• In all other cases, enter them on line 130 unless the payments are shown in box 19 of your T5 slip. If they appear in box 19, enter them on line 121.

PENSIONS FROM A FOREIGN COUNTRY

If you are a deemed resident, report on line 115 the total amount of your foreign pension income. Report this income in Canadian dollars. Convert it using the exchange rate in effect on the day you received it. If the pension was paid at various times throughout the year, you can contact us to get an average annual rate.

Attach a note identifying the type of pension you received and where it came from.

You may have to report amounts you received from custodial, trusteed, and annuity United States individual retirement accounts (IRAs). For details, contact us.

Tax Tip

You can claim a deduction on line 256 for the part of your foreign pension income that is tax-free under a tax treaty. If you do not know whether any part of your foreign pension is tax-free in Canada, contact us.

United States social security - Enter on line 115 the full amount of your social security in Canadian dollars. However, you can claim a deduction on line 256 for one-half of this amount. Benefits paid for your children are their income, even if you received the payments.

Note
Under proposed changes to the Canada-United States Tax Convention, starting in 1996, you will no longer be taxed in Canada on your U.S. social security benefits. However, these payments may be subject to U.S. withholding tax. For more information, contact us.

LINE 119 - UNEMPLOYMENT INSURANCE BENEFITS

Enter on line 119 the total Unemployment Insurance (UI) benefits shown in box 14 of your T4U slip.

Human Resources Development Canada may have sent you more benefits than you should have received. If this is the case and you repaid the excess benefits directly to them, you may be entitled to a deduction. See line 232 for details.

Note
If your net income before adjustments (line 234) is more than $63,570, you may have to repay some of the UI benefits you received. See line 235 for details.

LINE 120 - TAXABLE AMOUNT OF DIVIDENDS FROM TAXABLE CANADIAN CORPORATIONS (For deemed residents)

Enter on line 120 the taxable amount of all dividends from taxable Canadian corporations, even if you did not receive an information slip.

If you received foreign dividends, see the section called "Foreign interest and dividend income" at line 121 for details on how to report this income.

HOW TO REPORT

Enter on Part I of Schedule 4 the taxable amount of dividends from taxable Canadian corporations. You will find these amounts in box 11 on T5 slips, box 31 on T4PS slips, box 32 on T3 slips, and in the details area on T5013 slips.

You may not have received an information slip showing the taxable dividends you received from taxable Canadian corporations. To calculate the taxable amount, multiply the dividends you actually received by 125%.

Taxable dividends received from taxable Canadian corporations qualify for the federal dividend tax credit. This credit reduces the amount of tax you owe. Complete Schedule 1 to claim this credit. See line 502 for details.

Tax Tip

In some cases, it may be better for you to report all the taxable dividends your spouse received from taxable Canadian corporations. You can only do this if, by including the dividends in your income, you will be able to claim or increase your claim for the spousal amount (see line 303).

If you use this option, you may be able to take better advantage of the dividend tax credit. Also, do not include these dividends in your spouse's income when you calculate claims such as the spousal amount on line 303 or amounts transferred from your spouse on Schedule 2.

LINE 121 - INTEREST AND OTHER INVESTMENT INCOME (For deemed residents)

Report at this line your interest from Canadian sources, and your interest and dividend income from foreign sources.

The interest you report depends on the type of investment and on when you made the investment. This includes the interest on any income tax refund you received in 1995 and shown on your Notice of Assessment or Notice of Reassessment.

HOW TO REPORT

• Use Part II of Schedule 4.
• List each investment separately and attach copies of any information slips.

To determine the amount that you have to report, read the parts of this section that correspond to the type of investment that you have. This section is divided as follows:

• Bank accounts
• Term deposits, guaranteed income certificates (GICs), and other similar investments
• Treasury bills
• Earnings on life insurance policies
• Foreign interest and dividend income
• Canada Savings Bonds (CSBs)

BANK ACCOUNTS

Report interest that was paid or credited to you in 1995, even if you did not receive an information slip. You may not receive a T5 slip for amounts under $50.

Report your share of interest from a joint account, based on how much you contributed to the account.

Example

Karen and Wes received a T5 slip from their joint bank account showing the $400 interest they earned in 1995. Karen had deposited $4,000 and Wes had deposited $1,000 into the account.

Karen reports $320 interest, calculated as follows:

$4,000 (her share) x $400 (total interest) = $320 __________________ $5,000 (total)

Wes reports $80 interest, calculated as follows:

$1,000 (his share) x $400 (total interest) = $80 __________________ $5,000 (total)

In most cases, you have to report all the interest from a joint bank account in which:

• you deposited all of the money; or
• the interest is from money you gave or loaned to certain related people. For more details, see "Loans and transfers of property" at line 130.

If you deposited Child Tax Benefit payments into a bank account in your child's name or a trust in your child's name, the interest earned on those payments is your child's income.

TERM DEPOSITS, GUARANTEED INCOME CERTIFICATES (GICS), AND OTHER SIMILAR INVESTMENTS

On these investments, interest builds up over a period of time usually longer than one year, and you do not receive the interest until the investment matures, or you cash it in. For more information on CSBs, see the heading "Canada Savings Bonds (CSBs)" on page 14.

You have to report annually the interest you earned on all investments you made after 1989.

The amount of income you report is based on the interest you earned during each complete investment year. For example, if you made a long- term investment on July 1, 1994, the first year's interest is calculated to the end of June 1995. You may or may not receive a T5 slip showing the amount of interest you earned. In either case, you have to report the interest on your 1995 tax return. Report the interest earned from July 1995 to June 1996 on your 1996 return.

You can report interest you earned on investments you made before 1990, including CSBs, in one of the three following methods:

• cash method;
• receivable method; or
• annual accrual method.

Cash method - Report interest either in the year it is paid to you, or at least every third complete year after you make the investment. If you dispose of an investment within the three-year period, you have to report all interest (except the amount you have already reported) in the year you receive it.

Receivable method - Report interest in the year you are entitled to receive it, rather than when you actually receive it. For example, you will report the interest when a bond interest coupon matures, rather than when you actually receive the payment. Under this method, you have to report interest at least every third complete year after you make the investment.

Annual accrual method - Report interest annually, regardless of when you are entitled to receive it or when it is actually paid. For example, you report the interest from a compound-interest bond yearly as it accumulates, even though you will not receive the interest until you cash the bond.

If you want to report interest on an investment using the annual accrual method, say so on your return. Include a note identifying the investments that you have chosen to report annually. From then on, you have to report interest from those investments using the annual accrual method.

Changing your method - You can change from the cash or receivable methods to the annual accrual method. However, once you start using the annual accrual method for an investment, you cannot change to any other method for that investment. To change your method, include a note in your return stating which investments you have chosen to report annually, and report all interest to the end of the year in which you are changing your method (except the amount you have already reported).

If you have been reporting interest using the cash or receivable method, you cannot go back and change your method to the annual accrual method on returns from previous years.

TREASURY BILLS

If you disposed of a treasury bill (T-Bill) in 1995, you will receive either a T5008 slip, Statement of Securities Transactions, or an account statement.

If you disposed of a T-Bill at maturity, you have to report as interest the difference between the price you paid for it and the proceeds of disposition shown on the T5008 slip or account statement.

If you disposed of a T-Bill before maturity, you may also have to report a capital gain or loss. For details, get the income tax guide called Capital Gains.

EARNINGS ON LIFE INSURANCE POLICIES

Report the earnings which have accumulated on certain life insurance policies in the same way as you do for other investments. In all cases, your insurance company will send you a T5 slip.

For policies bought before 1990, you can choose to report accumulated earnings annually by telling your insurer in writing that you choose to do so.

FOREIGN INTEREST AND DIVIDEND INCOME

Report gross foreign interest and dividend income in Canadian dollars. Do not deduct from your foreign income the amount of tax the foreign country withheld. For more information on how to convert your foreign income into Canadian dollars, see the section called "How do you report foreign income and other amounts?" on page 7.

Tax Tip

If you paid foreign taxes on foreign investment income that you received, you may be able to claim a foreign tax credit. See lines 507 and 508 for details.

CANADA SAVINGS BONDS (CSBS)

Interest on Canada Savings Bonds (CSBs) designated by the letter "R," for regular-interest, is paid annually. Interest on bonds designated by the letter "C," for compound-interest, is not paid until the bond matures, or you cash it in.

HOW TO REPORT

"R" bonds - Report the amount shown on the T5 slip.

"C" bonds, Series 45 and subsequent - Report the amount shown on the T5 slip.

"C" bonds, Series 42 to 44 - Use Chart 1 if you want to report your bond interest using the annual accrual method. (We explain the methods on page 13).

CHART 1: Interest to report for "C" bonds using the annual accrual method
For each series:	Series 42	Series 43	Series 44
A - Face value of bonds	-	-	-
B - Amount from line A divided by 100	-	-	-
C - Interest amount Line B x Line C	x 11.27	x 10.35	x 9.38
Report this amount at Line 121	=	=	=

Tax Tip

If you bought bonds through your payroll savings plan, you can deduct the interest charges you paid to buy the bonds. See line 221 for details.

If you want to change to the annual accrual method, use Chart 2 to calculate the amount you should report.

CHART 2: Interest to report for "C" bonds if you want to change to the annual accrual method
For each series:	Series 42	Series 43	Series 44
A - Face value of bonds	Series 42	Series 43	Series 44
B - Amount from line A divided by 100	-	-	-
C - Interest amount Line B x Line C	x 19.88	x 10.35	x 24.48
Report this amount at Line 121	=	=	=

If you use the cash or receivable method, you have to report the interest at least every three years. Using this method, you should have reported the following amounts for each $100 of bonds:

• for Series 42 bonds, $33.19 interest on your 1990 return and $34.90 on your 1993 return;
• for Series 43 bonds, $35.33 interest on your 1991 return and $26.78 on your 1994 return; and
• for Series 44 bonds, $32.05 interest on your 1992 return and $24.48 on your 1995 return.

If you have not reported any interest on your Series 42, 43, or 44 "C" bonds, you should write and ask us to adjust your return. For more details on how to do this, see the section called "After you file" on page 8 of this guide.

If you cashed Series 42, 43, or 44 "C" bonds in 1995, report the amount shown on the T600 slip minus any part of that amount that you have already reported in previous years. Use Chart 3 below to calculate the amount you should have reported for each $100 of bonds:

CHART 3: Interest already reported for each $100 of "C" bonds cashed before maturity
For each series:	Series 42	Series 43	Series 44
Annual accrual method	76.70	62.11	47.15
Cash or receivable method	68.09	62.11	32.05

LINE 122 - NET PARTNERSHIP INCOME: LIMITED OR NON-ACTIVE PARTNERS ONLY (For deemed residents)

If you were a limited partner of a partnership, that did not include a rental or farming operation, enter your share of the partnership's net income or loss on line 122.

If you were a partner (other than a limited partner) of a partnership, that did not include a rental or farming operation, enter your share of the partnership's net income or loss on line 122 only if you were:

• not actively involved in the partnership; and
• not otherwise involved in a business or profession similar to that carried on by the partnership.

Report your net rental income or loss from a partnership on line 126. Report your net farming income or loss from a partnership on line 141.

If none of the above applies to you, enter your share of the partnership's net income or loss on the applicable self-employment line of your return (see lines 135 to 143).

Note

If the partnership has a loss, the amount you can claim could be limited. For details, contact us.

HOW TO REPORT

• Complete Part III of Schedule 4.
• Attach to your return a T5013 slip, Statement of Partnership Income. If you did not receive this slip, attach a copy of your financial statement. See lines 135 to 143 for more details.

Note
You may have to make Canada Pension Plan contributions on the net income you report on line 122. See line 310 for details.

CANADIAN MOTION PICTURE FILMS AND VIDEOTAPES

You may have invested in a certified feature film or a certified production for reasons other than to earn income from a business. If so, and if you want to claim capital cost allowance, you have to file with your return a T1-CP slip, Statement of Certified Productions, which the producer issues. Otherwise, we may disallow your claim. Use the back of the T1-CP slip to calculate your allowable claim.

LINE 126 - RENTAL INCOME (For deemed residents)

Report your rental income for the 1995 calendar year. You have to include with your return a statement showing your rental income and expenses for the year. You can get a Form T776, Statement of Real Estate Rentals, from us to help you calculate your net rental income.

Enter your gross rental income on line 160 and your net rental income or loss from real estate rentals on line 126. If you have a rental loss, show the amount in brackets. You should also include any amount in box 20 of your T5013 slip, or that a partnership allocated to you in its financial statements.

The income tax guide called Rental Income contains Form T776, as well as details on rental matters.

LINE 127 - TAXABLE CAPITAL GAINS (For deemed residents, for non- residents, for non-residents electing under section 217 of the Income Tax Act)

A capital gain or a capital loss usually occurs when you sell or dispose of property, such as real estate or shares. If you are a non- resident, a capital gain or a capital loss occurs when you dispose of taxable Canadian property. The taxable part of a capital gain is 75% of the net amount of your capital gains minus your capital losses for the year.

Under proposed legislation, if after 1991, you realized a capital gain as a result of a mortgage foreclosure or conditional sales repossession, the capital gain is excluded when calculating your claim for the GST credit, Child Tax Benefit payments, age amount, and child tax credit.

In addition, such a gain is not included in the calculation of a social benefits repayment at line 235. If this applies to you, contact us for more details.

HOW TO REPORT

Use Schedule 3 to calculate your taxable capital gains or allowable capital losses and attach the completed schedule to your return. If you receive a T5008 slip, an account statement showing your securities transactions, or a financial statement from a partnership, use the information on these statements to help you complete Schedule 3. If you need more information on capital gains or capital losses, get the income tax guide called Capital Gains.

If you have a taxable capital gain, transfer the amount from line 044 on the back of Schedule 3 onto line 127 of your return. If you have a net capital loss, do not claim it on line 127. You can only use it to reduce your taxable capital gains of other years. See the "Note" at line 253 for details on how to carry back your loss.

Tax Tip

If you are a deemed resident, you may be able to claim a deduction for the taxable capital gain you report. See line 254 for details.

Non-residents electing under section 217 - If you disposed of taxable Canadian property in the year, you have to include the gain on your section 217 return.

LINE 128 - ALIMONY OR MAINTENANCE INCOME (For deemed residents for non-residents electing under section 217 of the Income Tax Act)

Enter on line 128 the taxable alimony or maintenance payments you received or are considered to have received in 1995.

Generally, the alimony or maintenance payments you received are taxable, if all of the following conditions are met:

• When you received the payments, you and the person making the payments were living apart and you continued to live apart for the rest of the year.
• The payments were made under a court order or written agreement.
• The payments were made to maintain you, your children, or both.
• The payments were an allowance to be paid periodically. For example, the payments could be made monthly, quarterly, semi- annually, or annually.
• The payments were made to you or to someone else on your behalf.

Note
There are exceptions to these conditions. If this is the first time you are reporting support payments, or if you do not know whether the payments you received are taxable, get the pamphlet called Alimony or Maintenance.

Tax Tip

If you are a deemed resident, you may have to report alimony or child support payments you received from a resident of another country. However, if a tax agreement exists between Canada and the othercountry, the alimony or child support payments may be tax-free inCanada. You can claim a deduction for them on line 256. To find out ifthe payments you received are tax-free, contact the International Tax Services Office.

You may be able to claim a deduction for alimony or maintenance incomeyou repaid under a court order. For details, contact the InternationalTax Services Office.

(For deemed residents) (For non-residents electing under section 217 of the Income Tax Act)

LINE 129 - REGISTERED RETIREMENT SAVINGS PLAN (RRSP) INCOME

In most cases, you have to enter on line 129 the total amount shown in boxes 16, 18, 20, 22, 26, 28, and 34 of your T4RSP slip. This is the case unless your spouse made a contribution to your RRSP. See the heading "Spousal RRSPs" below for more details.

Tax Tip

Annuity payments shown in box 16 of your T4RSP slip may qualify for the pension income amount. See line 314 for more details.

SPOUSAL RRSPS

Your spouse may have to report some or all of the RRSP income shown in boxes 20, 22, or 26 of your T4RSP slip if:

• your spouse has contributed to any of your plans in 1993, 1994, or 1995; or
• you received a T4RSP slip showing a yes in box 24 and either your spouse's name in box 38 or your spouse's social insurance number in box 36.

If, at the time of the withdrawal, you and your spouse were living apart because of a breakdown in the relationship, you have to report the whole amount shown on your T4RSP slips.

Complete Form T2205, Calculating Amounts From a Spousal RRSP or RRIF to Include in Income, to calculate the amount from a spousal RRSP that each of you has to report. Both you and your spouse have to include a copy of this form with your returns. Attach the T4RSP slip to your return.

For more details on RRSP income, get the income tax guide called RRSP and Other Registered Plans for Retirement.

REPAYMENTS UNDER THE HOME BUYERS' PLAN (HBP)

If you withdrew funds from your RRSP under the HBP before March 2, 1994, you should have received a repayment statement from us in the fall of 1995, telling you the amount of your first annual repayment for 1995. You have until February 29, 1996, to make your required repayment for 1995.

If you have not made a repayment for 1995, you have to include the required repayment, as indicated on your repayment statement, on line 129 of your return. You also have to include an amount on line 129 if you repay less than the required repayment. For more details, contact us.

LINE 130 - OTHER INCOME (for deemed residents, for non-residents and for non-residents electing under section 217 of the Income Tax Act)

Use this line to report taxable income that is not reported anywhere else on the return. Identify the type of income you are reporting in the space to the left of line 130 on your return. This will support any deductions you are entitled to claim against this income. If you have more than one type of income, attach a note to your return giving the details.

SCHOLARSHIPS, FELLOWSHIPS, BURSARIES, AND ARTISTS' PROJECT GRANTS

Total all the scholarships, fellowships, bursaries, and artists' project grants you received in 1995 (box 28 of T4A slips).

• If they total $500 or less, do not report them.
• If they total more than $500, subtract a $500 tax-free amount. Report on line 130 only the amount that remains.

Example

Sarah received a $1,500 scholarship to attend university. She subtracts the $500 tax-free amount and reports $1,000 on line 130.

Report prizes and awards you received as a benefit from your employment or in connection with a business. However, these are not eligible for the $500 tax-free amount.

If you received a research grant, see line 104.

For more information, get Interpretation Bulletin IT-75, Scholarships, Fellowships, Bursaries, Prizes, and Research Grants.

Note
If you received an artists' project grant, you have a choice to make. You can subtract the $500 or your expenses, whichever benefits you more. However, the expenses you claim cannot be more than the grant. You cannot claim personal living expenses while at your usual place of residence.

LUMP-SUM PAYMENTS

Enter on line 130 lump-sum payments from pensions and deferred profit- sharing plans (box 18 on T4A slips and box 22 on T3 slips).

RETIRING ALLOWANCES (SEVERANCE PAY)

Enter the amount shown in box 26 of your T4A slip.

Also, enter on this line any retiring allowance shown on your T3 slip. Any retiring allowance will be included in the amount in box 26, and details regarding it will be shown in box 36 and in the footnote area of the slip.

Note
You may be able to deduct legal fees you paid to get a retiring allowance. See line 232 for details.

Tax Tip

You can transfer part or all of your retiring allowances to yourregistered retirement savings plan (RRSP). See the heading "Income eligible for transfer" on page 19. However, if you make this transfer,you may have to pay minimum tax. See the heading "Minimum tax" on page 36 for details.

DEATH BENEFITS

A death benefit is an amount you receive, after a person's death, for that person's employment service. It is shown in box 28 of a T4A slip or box 35 of a T3 slip. You may not have to pay tax on up to $10,000 of the benefit you received.

Report the death benefit you received because of an individual's death as follows:

• If you are the sole surviving spouse or the only person to receive a death benefit, report the amount that is more than $10,000.
• If you are the only person to receive a death benefit, besides the sole surviving spouse, the maximum amount of the death benefit which is tax-free is $10,000 minus the total death benefits received by the sole surviving spouse.
• If you are one of several people who received a death benefit, the part of the $10,000 tax-free amount that is not available to the sole surviving spouse has to be split based on the amount each person received.
• If you are one of several people, including two surviving spouses, who received a death benefit, the $10,000 tax-free amount has to be split based on the amount each person received. For income tax purposes, there could be two surviving spouses if the deceased was legally married and also had a common-law spouse as defined on page 9. If only one of the surviving spouses receives the death benefit, that spouse is considered the sole surviving spouse.

Attach a note to your return stating the amount of death benefits you received that you did not include in your income.

Note
The total tax-free amount claimed by all recipients for all years cannot be more than $10,000. A sole surviving spouse claims the death benefit exemption first. Only the part of the $10,000 tax- free amount that is not available to the sole surviving spouse can be claimed by the other recipients. Therefore, if the death benefit was paid over two or three years, you may have to adjust the tax- free amount you can claim this year or that you claimed on a previous year's return.

For more details, get Interpretation Bulletin IT-508, Death Benefits - Calculation.

REGISTERED EDUCATION SAVINGS PLAN INCOME

Enter on line 130 the total taxable payments from a registered education savings plan (box 26 of your T3 slips).

LOANS AND TRANSFERS OF PROPERTY

If you lend or transfer property (including money) to certain people, you may have to report any income from that property.

This may be the case if you transferred property to your spouse or to a person who was under 18 at the end of 1995, if that person is your child, grandchild, sister, brother, niece, or nephew.

This also may be the case if you loaned property to your spouse, parents, grandparents, child, grandchild, brother, or sister.

You may have to report a capital gain or loss from property that you loaned or transferred to your spouse.

Enter the income amounts from that property, or property substituted for it, on the appropriate line of your return. For details, get Interpretation Bulletin IT-510, Transfers and Loans of Property made after May 22, 1985 to a Related Minor, or IT-511, Interspousal and Certain Other Transfers and Loans of Property.

OTHER INCOME

You should also report the following amounts on line 130:

• amounts distributed from a retirement compensation arrangement;
• training allowances, Saskatchewan Pension Plan payments, or any other amount shown in box 28 of a T4A slip;
• amounts from a trust (including an amateur athlete trust) shown in box 26 of a T3 slip;
• certain annuity payments (see line 115);
• income assistance payments you received under The Atlantic Groundfish Strategy (if you received these payments because you were a self-employed fisherman, report them on line 143); and
• any other type of taxable income that you are not reporting anywhere else.

LINES 135 TO 143 - SELF-EMPLOYMENT INCOME (For deemed residents)

Enter your gross and net income or loss from self-employment on the appropriate line of your return. If you have a loss from self- employment, show it in brackets.

Under proposed legislation, for fiscal periods beginning after 1994, the rules for reporting your self-employed income have changed. This change may mean that you have to include more than 12 months of self- employment income on your 1995 return. However, there are special rules that apply. For more details, get a copy of the applicable guide listed on the next page.

Make sure you report your self-employment income on the correct line of your return. You have to include with your return a statement showing your self-employment income and expenses.

The following income tax guides contain additional information and forms you may need to help you calculate your self-employment income:

• Business and Professional Income (Form T2124, Statement of Business Activities, and Form T2032, Statement of Professional Activities)
• Farming Income (Form T2042, Statement of Farming Activities)
• Fishing Income (Form T2121, Statement of Fishing Activities)

If you are using your home for day care, you may also wish to get the pamphlet called Using Your Home for Day Care.

To get any of these publications, contact us.

If you were a limited or non-active partner, enter your net income or loss on line 122, unless the following applies. If your net income or loss is from a rental operation, enter it on line 126. If it is from a farming operation, enter it on line 141.

(For deemed residents) If you were an active partner and received a T5013 slip, Statement of Partnership Income, report the amount from box 18 on the line of your return that agrees with the three-digit code shown in box 12. This is your share of the partnership's income or loss. Also report the partnership's gross income as shown in box 31. Attach a copy of the T5013 slip to your return. If you did not receive this slip, attach a copy of the applicable self-employment form as indicated above.

Note
You may have to make Canada Pension Plan contributions on your self-employment earnings. See line 310 for details.

LINE 144 - WORKERS' COMPENSATION PAYMENTS (For deemed residents)

Enter the amount shown in box 10 of your T5007 slip. If you did not receive a T5007 slip, report the amount from the information slip you did receive.

Claim a deduction on line 250 for the Workers' Compensation payments you entered on line 144.

LINE 145 - SOCIAL ASSISTANCE PAYMENTS (For deemed residents)

Enter on line 145 the amount shown in box 11 of your T5007 slip, unless the following applies. If you lived with your spouse at the time either of you received the social assistance payments, the spouse with the higher net income (line 236) has to report these payments.

If you did not receive a T5007 slip, report the amount from the information slip you did receive. If the slip shows both your and your spouse's name, the spouse with the higher net income (line 236) has to report the total amount.

If you received a Relevé 5 slip, the instructions on the back of the slip explain how to report this income.

Claim a deduction on line 250 for the social assistance payments you entered on line 145.

Note
Do not include social assistance payments you or your spouse received for being a foster parent or for caring for a disabled adult who was living with you, unless the payments are for your spouse or an individual related to you or your spouse.

LINE 146 - NET FEDERAL SUPPLEMENTS (For deemed residents and for non- residents electing under section 217 of the Income Tax Act)

Enter the amount shown in box 21 of your T4A(OAS) slip.

Tax Tip

If your net income before adjustments (line 234) is $53,215 or less, claim a deduction on line 250 for the net federal supplements you entered on line 146.

If line 234 of your return is more than $53,215, contact us to determine how much you can deduct on line 250.

STEP 4 - TAXABLE INCOME

LINE 206 - PENSION ADJUSTMENT AMOUNT

If you were a member of a pension plan or a deferred profit-sharing plan (DPSP), there may be a pension adjustment (PA) amount in box 52 of your T4 slip or box 34 of your T4A slip. This amount represents the value of the benefit you earned in 1995 under a pension plan or DPSP.

Do not include the 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 1996 registered retirement savings plan (RRSP) deduction limit, which we will show on your Notice of Assessment for 1995. See line 208 for details.

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

Note
If you participated in a foreign pension plan in 1995, you may have to enter an amount on this line. For details, contact us.

LINE 207 - REGISTERED PENSION PLAN CONTRIBUTIONS (For deemed residents and for non-residents)

The amount you contributed to your registered pension plan (RPP) is shown in box 20 of your T4 slip, box 32 of your T4A slip, or on your union receipt. Add together all of the amounts you contributed to your RPPs.

You can deduct the total amount unless it is more than $3,500 and your information slip shows a past-service amount for a period before 1990. If this is the case, get the income tax guide called RRSP and Other Registered Plans for Retirement for information on how much you can deduct. You should also get that guide if you contributed to an RPP in a previous year and could not deduct part of the amount.

Receipts - With the exception of your T4 and T4A slip, do not include your receipts with your return. However, you have to keep them in case we ask to see them.

Note
You cannot deduct contributions you made to pension plans in other countries, with two exceptions: under the Canada-France Income Tax Convention and the Canada-Netherlands Income Tax Convention, you may be able to deduct, under certain circumstances, contributions to a pension plan. If you have contributed to a pension plan in either France or the Netherlands, contact us to find out if you can deduct the amount.

LINE 208 - REGISTERED RETIREMENT SAVINGS PLAN (RRSP) CONTRIBUTIONS (For deemed residents, for non-residents and for non-residents electing under section 217 of the Income Tax Act)

This section gives general information on RRSPs. It is divided into the following parts:

• Maximum you can deduct
• 1995 RRSP deduction limit
• Income eligible for transfer
• Repayments under the Home Buyers' Plan (HBP)
• Schedule 7, RRSP Unclaimed Contributions, Transfers, and Designations of Repayments under the Home Buyers' Plan

If you need more information after reading this section, get the income tax guide called RRSP and Other Registered Plans for Retirement.

MAXIMUM YOU CAN DEDUCT

The maximum you can deduct on line 208 is the lesser of:

• your "1995 RRSP deduction limit" plus "income eligible for transfer" that you received in 1995 and transferred to an RRSP before March 1, 1996; and
• the total of the RRSP contributions you made from March 2, 1995, to February 29, 1996, plus the RRSP contributions you made from January 1, 1991, to March 1, 1995, that were not allowed as a deduction on your returns for the years 1990 to 1994.

Contributions you made include amounts you contributed to your own RRSP or your spouse's RRSP based on your "1995 RRSP deduction limit." They also include eligible amounts from lines 115, 129, and 130 of your 1995 return that you transferred to your own RRSP. However, contributions you made do not include any of the amounts mentioned in the "Note" below the heading "Transfers" on page 20. For more information on eligible amounts you can transfer, see the heading "Income eligible for transfer".

You cannot contribute any amounts to your own RRSP after the end of the year in which you turn 71. As well, you cannot contribute any amounts to your spouse's RRSP after the end of the year in which your spouse turns 71.

Receipts - Attach to your return official receipts that confirm the amount you are deducting, unless you included the receipts on a previous return.

We will only accept a photocopy of a receipt if the issuer certifies that it is a true copy. If you contributed to your spouse's plan, the receipt has to show your name as the contributor and your spouse's name as the annuitant.

1995 RRSP DEDUCTION LIMIT

We will show your 1995 RRSP deduction limit on your latest Notice of Assessment, Notice of Reassessment, or on Form T1028, Your RRSP Deduction Limit Statement for 1995.

If you do not have your notice or Form T1028, you can determine your limit for 1995 by calling T.I.P.S. (RRSP), one of our automated T.I.P.S. services, or by contacting the International Tax Services Office. See the telephone listings included with this package.

If you would like to calculate your 1995 RRSP deduction limit, get the income tax guide called RRSP and Other Registered Plans for Retirement.

Note
You can carry forward the part of your RRSP deduction limit that you do not use. The amount you can carry forward is called your unused RRSP deduction room. The RRSP deduction limit shown on your Notice of Assessment includes any unused RRSP deduction room that you can carry forward.

INCOME ELIGIBLE FOR TRANSFER

A transfer is an RRSP contribution you make based on eligible income you received. You can claim an RRSP deduction for eligible amounts you received and included in income on your 1995 return, and that you transferred to your own RRSP before March 1, 1996. This contribution, called a transfer, is in addition to any RRSP contribution you can make based on your "1995 RRSP deduction limit."

Only certain types of income you received and reported on lines 115, 129, or 130 of your 1995 return can be transferred to your own RRSP. For example, if you received a retiring allowance in 1995, you can make an RRSP contribution, called a transfer, based on the eligible part of that income. The income tax guide called RRSP and Other Registered Plans for Retirement gives more details on the income that is eligible for transfer.

Non-residents - You can transfer certain Canadian-source amounts otherwise subject to withholding tax, to an RRSP, a registered pension plan (RPP), or a registered retirement income fund (RRIF) without having tax withheld. These amounts include payments out of an RPP, deferred profit-sharing plan, RRIF, or RRSP. The transfers have to be direct transfers, and you have to complete Form NRTA1, Authorization for Non-Resident Tax Exemption. For more information, contact us.

Note
If you are deducting an RRSP contribution you made based on eligible income you received, you have to complete Schedule 7. If you transfer amounts to an RRSP, you may have to pay minimum tax. See "Minimum tax" on page 36 for details.

REPAYMENTS UNDER THE HOME BUYERS' PLAN (HBP)

If you withdrew funds from your RRSP under the HBP before March 2, 1994, you have to make your first annual repayment by February 29, 1996. If you withdrew your funds after March 1, 1994, and before January 1, 1995, you have to make your first annual repayment by March 1, 1997. If you withdrew funds in 1995, you have to make your first annual repayment by March 1, 1998. You cannot deduct on your return any RRSP contribution you designate as an HBP repayment on Schedule 7.

Non-residents - If you ceased to be a resident of Canada after you bought or built a qualifying home with funds you withdrew under the Home Buyers' Plan, contact us for the repayment rules that apply to you.

Repayments for 1995 - You have to attach Schedule 7 to your 1995 return. Enter on Schedule 7 the total of the contributions you made from March 2, 1995, to February 29, 1996, that you want us to consider as repayments under the HBP for 1995.

Note
If you made contributions to your own RRSP from January 1, 1995, to March 1, 1995, that you want to designate as a 1995 repayment under the HBP, contact us.

If you have not made an HBP repayment for 1995, or you repay less than the required repayment, you may have to include an amount in income. See line 129 for details.

If you are participating in the HBP and withdrew funds before March 2, 1994, you should have received a repayment statement from us in the fall of 1995. The statement will give the amount you have to repay for 1995, and will confirm the total amount you have repaid to date.

If you would like more information, get the pamphlet called Home Buyers' Plan.

SCHEDULE 7, RRSP UNCLAIMED CONTRIBUTIONS, TRANSFERS, AND DESIGNATIONS OF REPAYMENTS UNDER THE HOME BUYERS' PLAN

See Schedule 7 to determine if you have to complete this schedule and attach it to your return.

It is important for you to complete Schedule 7, if required, since we will use this information to verify any deduction for unclaimed RRSP contributions on your future returns. The information you provide on this schedule will also allow us to tell you, on your Notice of Assessment for 1995, your unclaimed RRSP contributions available for deduction on your 1996 return.

Unclaimed RRSP contributions - You may have made a contribution to your own RRSP or your spouse's RRSP that you did not deduct on any income tax return. This could happen if you made a contribution to your RRSP that is more than your RRSP deduction limit for the year. It could also happen if you chose not to claim an RRSP contribution you made in a year.

Note
If you had unclaimed RRSP contributions for 1994, you should have filed a completed Schedule 7 with your 1994 return. If you did not, you should submit a completed copy of a 1994 Schedule 7 to the International Tax Services Office. See "You would like to change your return - what should you do?" on page 8 for details.

If you made contributions to your own RRSP or your spouse's RRSP from January 1, 1991, to March 1, 1995, that you have not deducted, and you did not file a 1994 return, contact us.

If you do not have your 1994 Notice of Assessment or Notice of Reassessment, you can determine if you have unclaimed RRSP contributions for 1994 by calling T.I.P.S. (RRSP), one of our automated T.I.P.S. services, or by contacting us.

Home Buyers' Plan - See the heading "Repayments under the Home Buyers' Plan (HBP)" on this page for details.

Transfers - See the heading "Income eligible for transfer" on page 19 if you need more information on transfers.

Note
You cannot claim an RRSP deduction for certain RRSP contributions you made. When completing Schedule 7, do not include any of the following five amounts:

• Any payments that were directly transferred to your own RRSP for which you did not receive an information slip.
• Any RRSP contribution you made after March 1, 1995, that was refunded to you or your spouse because it was an undeducted contribution. Report the refund on line 129 of your 1995 return. If you have Form T3012A, Tax Deduction Waiver on the Refund of Your Undeducted RRSP Contributions, approved by the Department for that amount, attach a copy to your return and claim a deduction on line 232. Otherwise, complete and attach Form T746, Calculating Your Deduction for Refund of Undeducted or Excess RRSP Contributions, to determine if you can claim this deduction.
• If, after March 1, 1995, you made contributions to your RRSP or your spouse's RRSP, less than 90 days before you or your spouse withdrew funds from that RRSP under the Home Buyers' Plan, part or all of those contributions may not be deductible. For more details, get the income tax guide called RRSP and Other Registered Plans for Retirement or the pamphlet called Home Buyers' Plan.
• The excess part of a direct transfer of an RPP lump-sum payment to an RRSP or registered retirement income fund (RRIF) that you are including on line 130 of your 1995 return, and are deducting on line 232 (you may have completed Form T1043, Calculating Your Deduction to Offset RRSP or RRIF Income if an Excess Amount From an RPP Has Been Transferred to an RRSP or a RRIF).
• The part of an RRSP withdrawal that you recontributed to your RRSP and deducted on line 232. This would have happened if you inadvertently withdrew more RRSP funds than you needed to obtain past-service benefits under an RPP.

LINE 209 - SASKATCHEWAN PENSION PLAN CONTRIBUTIONS (For deemed residents, for non-residents and for non-residents electing under section 217 of the Income Tax Act)

You may be able to deduct your contributions for 1995 to the Saskatchewan Pension Plan (SPP). You can deduct the least of the following three amounts:

• $600;
• the total contributions you paid to the SPP from January 1, 1995, to February 29, 1996 (excluding any contributions that you deducted on your 1994 return); or
• the amount from line 3 of the following chart:

Calculation of allowable 1995 SPP contributions

Your 1995 RRSP deduction limit	$ _______ 1
Your RRSP deduction from line 208 (do not include the part that was transferred to your RRSP)	- _______ 2
Line 1 minus line 2 equals	$ _______ 3

Attach your receipts to your return.

Note
You can only claim contributions that were made to your own plan. Only your spouse can claim contributions that you made to your spouse's plan.

LINE 212 - ANNUAL UNION, PROFESSIONAL, OR LIKE DUES (For deemed residents)

Enter on line 212 the total of the following:

• annual membership dues you paid to a trade union or an association of public servants;
• professional membership dues you paid if you needed them to maintain a professional status recognized by law;
• dues you paid to a parity or advisory committee (or similar body) if you needed to pay them under provincial law; and
• professional or malpractice liability insurance premiums you paid if you needed the insurance to maintain a professional status recognized by law.

Annual membership dues do not include initiation fees, 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.

The amount you paid is shown in box 44 of your T4 slip or on your receipt. The amount you paid includes any goods and services tax (GST).

Tax Tip

If the amount you are deducting includes GST, you may be eligible for a rebate of the GST you paid. See line 457 for details.

Receipts - With the exception of your T4 slip, do not include your receipts with your return. However, you have to keep them in case we ask to see them.

If you need 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.

LINE 214 - CHILD CARE EXPENSES (For deemed residents and for non residents)

You may be entitled to claim child care expenses if you or your spouse paid someone to look after your children so that you or your spouse could:

• earn income from employment or self-employment;
• take an occupational training course for which a training allowance under the National Training Act is received; or
• conduct research or similar work for which a grant is received.

To make your claim, get Form T778, Calculation of Child Care Expenses Deduction for 1995, and Form T1065, Child Care Expenses Information Sheet for 1995, from us. However, if you claimed child care expenses on your 1994 return, you will find a copy of this form and information sheet included with the tax package we mailed to you. Attach a completed copy of Form T778 to your return.

Tax Tip

You may be able to claim payments you made to a boarding school, sports school, or camp. For details, see Forms T1065 and T778.

Non-residents - You can only deduct child care expenses if you meet the criteria outlined on Form T1065 and the expenses were paid to a resident of Canada for services provided in Canada.

LINE 215 - ATTENDANT CARE EXPENSES

You can claim the expenses you paid for attendant care (up to $5,000) if all of the following conditions apply:

• You are entitled to claim the disability amount (line 316).
• The expenses were paid to a person who is not your spouse and is 18 years of age or older.
• You paid the expenses for care that enabled you to earn income from employment or self-employment, take an occupational training course for which you received a training allowance under the National Training Act, or conduct research or similar work for which you received a research grant.
• The expenses are not claimed as medical expenses for 1995 or any other year.

To calculate the amount you can claim, complete Form T929, Attendant Care Expenses.

Receipts - Do not include your receipts or Form T929 with your return. However, you have to keep them in case we ask to see them.

LINE 217 - BUSINESS INVESTMENT LOSS (For deemed residents, for non- residents and for non-residents electing under section 217 of the Income Tax Act)

A business investment loss is a special type of capital loss that happens in certain situations. For instance, such a loss can occur when you dispose of shares or certain debts of a small business corporation.

If you incurred a business investment loss, get the income tax guide called Capital Gains for details on how to complete line 217 and line 228, which is located to the left of line 217.

Non-residents - A business investment loss applies to you only if the loss arises from property which would have been taxable to you in Canada.

LINE 219 - MOVING EXPENSES (For deemed residents and for non residents)

Deemed residents - Generally, you cannot deduct moving expenses. However, if you were a full-time student during 1995, and you moved from one location to another to start a job or a business, or to attend a post-secondary educational institution, you may be able to deduct the expenses.

Non-residents - You cannot deduct moving expenses unless you were a full-time student during 1995. If this is your situation, contact the International Tax Services Office for the special rules that apply to you.

HOW TO CLAIM

Get Form T1-M, Claim for Moving Expenses, for a list of allowable moving expenses and the instructions for claiming them on your return. You have to complete Form T1-M to determine how much you can deduct.

Receipts - Do not include your receipts or Form T1-M with your return. However, you have to keep them in case we ask to see them.

LINE 220 - ALIMONY OR MAINTENANCE PAID (For deemed residents, for non- residents and for non-residents electing under section 217 of the Income Tax Act)

Enter on this line the deductible alimony or maintenance payments you made in 1995.

In most situations, your alimony or maintenance payments are deductible, if all of the following conditions are met:

• When you made the payments, you were living apart, and you continued to live apart for the rest of the year, from the person to whom or on whose behalf you made the payments.
• The payments were made under a court order or written agreement.
• The payments were made to maintain your spouse or former spouse, your children, or both.
• The payments were an allowance to be paid periodically. For example, the payments could be made monthly, quarterly, semi- annually, or annually.

Note
There are exceptions to these conditions. If this is the first time you are deducting support payments, or if you do not know whether the payments you made are deductible, get the pamphlet called Alimony or Maintenance. You may have to report as income any reimbursement you received under a court order for alimony or maintenance payments. For details, get the pamphlet called Alimony or Maintenance.

Receipts - Do not include your receipts or cancelled cheques, or your court order with your return. However, keep them in case we ask to see them.

Tax Tip

If your court order or written agreement is signed in 1995, and it mentions the payments you made in 1994, you can ask us to adjust your 1994 return. See the "After you file" section on page 8 of this guide.

LINE 221 - CARRYING CHARGES AND INTEREST EXPENSES (For deemed residents)

You may be able to claim carrying charges and interest you paid to earn income from investments. To make your claim, complete Part IV of Schedule 4.

CARRYING CHARGES

Carrying charges include:

• fees for the management or safe custody of investments;
• safety deposit box charges;
• accounting fees for recording investment income;
• investment counsel fees (see Interpretation Bulletin IT-238, Fees Paid to Investment Counsel); and
• administration fees charged for your self-directed RRSP if you had to pay them to the trustee of your RRSP. For more information, get the income tax guide called RRSP and Other Registered Plans for Retirement.

You cannot deduct on line 221 any brokerage fees and commissions you had to pay because you sold securities. These expenses are considered "outlays and expenses" on Schedule 3 when you calculate your capital gain or capital loss.

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.

INTEREST EXPENSES

You can usually deduct the interest paid on money you borrowed to earn investment income. Generally, if you no longer use the borrowed money to earn income, you can no longer deduct the interest you paid on that money. However, if you no longer use the borrowed money to earn investment income in 1995, and all or a portion of the borrowed money has been lost due to a decline in the value of the property, you may be able to deduct all or a part of the interest you paid on that money. For details, contact us.

Canada Savings Bonds (CSBs) - When you buy bonds through payroll deductions, you pay an interest charge. You can claim this amount on line 221.

Example

Michael bought $1,000 of Series 49 CSBs through payroll deductions. The total amount deducted from his pay for the bond was $1,025.64 ($1,000 face value of the bond plus $25.64 in interest). Michael can claim the $25.64 he paid on line 221.

Policy loan interest - To claim interest you paid during 1995 on a policy loan made to earn interest, have your insurer complete Form T2210, Verification of Policy Loan Interest by the Insurer, before May 1, 1996. Keep the completed form in case we ask to see it.

LINE 224 - EXPLORATION AND DEVELOPMENT EXPENSES (For deemed residents and for non residents)

If you invested in a petroleum, natural gas, or mining venture in 1995, but did not participate actively, you can deduct your expenses on this line. If you participated actively, claim your expenses on line 135.

HOW TO CLAIM

• Complete Part V of Schedule 4 using the information which the principals of the venture give you.
• Attach to your return either a copy of the statement that gives details of the deduction or a T5013 slip.

The statements have to identify you as a participant in the venture, show your allocation (the number of units you own, the percentage assigned to you, or your ratio to the total partnership), and give the name and address of the fund.

Renounced resource expenses - If you received a T101 or T102 slip, use the instructions on the back of the slip to calculate your deduction. Attach to your return your slip and a schedule showing how you calculated your deduction.

Depletion allowances - Claim these amounts on line 232.

If you have any questions about these expenses, call the International Tax Services Office. See the telephone listings included with this package.

LINE 229 - OTHER EMPLOYMENT EXPENSES (For deemed residents)

You may be able to deduct certain expenses you paid, (including any goods and services tax (GST) you paid) to earn employment income if:

• under your employment contract, you had to pay the expenses; and
• you did not receive a non-taxable allowance for the expenses.

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

You have to include with your return certain details about your employment expenses. Form T777, Statement of Employment Expenses, lists these details and will also help you calculate how much you can deduct. Attach a completed copy of this form to your return.

The income tax guide called Employment Expenses contains the forms you will need, and describes the limits and conditions that apply when you claim employment expenses.

Artists' employment expenses - If you are an artist who is an employee, you may be able to deduct expenses you paid to earn income from certain artistic activities. For details, get the income tax guide called Employment Expenses.

Repayment of salary or wages - You can deduct salary or wages you reported as income on this or a previous year's return and which you repaid in 1995. This includes amounts you repaid for a period when you were entitled to receive wage-loss replacement 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.

Receipts - Do not include your receipts or forms, except for Form T777, for any amounts deducted at line 229 with your return. However, you have to keep them in case we ask to see them.

Tax Tip

If the amount you are deducting includes GST, you may be eligible for a rebate of the GST you paid. See line 457 for details.

LINE 232 - OTHER DEDUCTIONS (For deemed residents, for non-residents and for non-residents electing under section 217 of the Income Tax Act)

Use this line to deduct the amounts explained in this section. Identify the deduction you are claiming in the space to the left of line 232. If you have more than one kind of deduction, or you want to explain your deduction more fully, attach a note to your return.

REPAYING INCOME AMOUNTS

If you repaid amounts in 1995 that you already reported as income, you may be able to deduct them on your 1995 return. Attach receipts or other documents showing the amounts you paid. You can claim repayments of:

• Unemployment Insurance (UI) benefits you paid to Human Resources Development Canada (HRDC) (see the explanation that follows);
• Old Age Security pension you paid to HRDC;
• Canada Pension Plan benefits or Quebec Pension Plan benefits;
• retiring allowances (severance pay);
• refund interest (see the explanation that follows);
• scholarships, fellowships, and bursaries;
• allowances under the National Training Act;
• research grants;
• benefits under the Labour Adjustment Benefits Act;
• loans under a life insurance policy up to the amount that you previously included in your income;
• amounts you received under the Program for Older Worker Adjustment; and
• income assistance payments you received under The Atlantic Groundfish Strategy.

UI benefits - You may have received more benefits than you should have, and repaid them to HRDC:

• HRDC may have reduced the UI benefits paid to you after discovering the mistake. In this case, your T4U slip will show only the net amount you received, so you cannot claim a deduction.
• You may have repaid HRDC. If so, you should receive an official receipt, Statement of Benefits Repaid. Enter the amount shown on this receipt on line 232. Attach the receipt to your return. This is not the same as repaying a social benefit as explained at line 235.

Refund interest - If we paid you interest on an income tax refund, as explained at line 121 in this guide, you have to report the interest in the year you received it. If we then reassessed your return and you had to repay some of the refund interest in 1995, you can deduct the amount you repaid.

LEGAL AND ACCOUNTING FEES

You can deduct the legal fees you paid:

• for advice or assistance in objecting to or appealing an assessment under the Income Tax Act, the Unemployment Insurance Act, the Canada Pension Plan, or the Quebec Pension Plan, plus any related accounting fees (although you have to reduce your claim by any award or reimbursements you received for such expenses);
• to collect late alimony or maintenance payments that will be included in your income;
• to get a court order when you have to sue your spouse or former spouse for maintenance payments in a family court; and
• to collect a retiring allowance or pension benefit. However, you can only claim as much as you received in retiring allowance or pension income in the year minus any part of these amounts transferred to a registered retirement savings plan or registered pension plan. You also have to reduce your claim by any award or reimbursement you got for these expenses. You can carry forward legal fees that you cannot claim in the year for up to seven years.

However, you cannot claim:

• legal costs to obtain a divorce or separation, to establish a right to alimony or maintenance payments, or to establish custody of a child; or
• fees to have someone complete your tax return, unless you have income from a business or property. To qualify, accounting services also have to be a part of the normal operations of your kind of business or property.

For information on whether you can deduct other legal and accounting fees, get Interpretation Bulletin IT-99, Legal and Accounting Fees.

DEPLETION ALLOWANCES

If you are claiming a depletion allowance, complete Part VI of Schedule 4. Attach a statement showing how you arrived at your claim.

OTHER AMOUNTS YOU CAN DEDUCT

Generally, you can also deduct the following on this line:

• a refund to you or your spouse in 1995 of an undeducted RRSP contribution that you made after 1990 (attach Form T3012A, Tax Deduction Waiver on the Refund of Your Undeducted RRSP Contributions, or Form T746, Calculating Your Deduction for Refund of Undeducted or Excess RRSP Contributions);
• an amount for a cleric's residence (get Interpretation Bulletin IT-141, Clergymen's Residences, for details); and
• capital cost allowance on a Canadian motion picture certified feature film or certified production. You have to file with your return a copy of information slip T1-CP, Statement of Certified Productions, which the producer issues. Otherwise, we may disallow your claim. Use the back of the T1-CP slip to calculate your allowable claim. If you are a limited partner of a partnership, make your claim on line 122.

LINE 235 - SOCIAL BENEFITS REPAYMENT (For deemed residents)

Unemployment Insurance (UI) benefits - If you received UI benefits in 1995 and your net income before adjustments (line 234) is more than $63,570, you have to repay part of these benefits. Complete Chart 1 on the next page to calculate how much you have to repay.

Old Age Security (OAS) pension benefits and net federal supplements - If you received OAS pension or net federal supplements and your net income before adjustments (line 234) is more than $53,215, you may have to repay all or a part of these benefits. Complete Chart 2 on the next page to calculate how much you have to repay.

Note
Under proposed legislation, starting in July 1996, tax will be withheld from your monthly OAS amount if you have an OAS repayment for 1995. The amount deducted each month will equal the amount you calculate at line 11 of Chart 2 below, divided by 12, or the amount of your monthly benefit, whichever is less. The amount deducted will be shown as "income tax deducted" in box 22 of your 1996 T4A(OAS) or T4A(P) slip, and will reduce the amount of tax you owe when you file your 1996 return. For more details, contact the International Tax Services Office.

Chart 1: UI benefits repayment

UI benefits from line 119	$_______ 1
UI benefits you repaid in 1995 and claimed on line 232	$_______ 2
Line 1 minus line 2	$ _______ 3
Net income before adjustments from line 234	$_______ 4
Base amount	- 63,570.00 5
Line 4 minus line 5 (if negative, enter "0")	___________
=	$ _______ 6
UI BENEFITS REPAYMENT: Enter 30% of the amount from line 3 or 6, whichever is less	$ _______ 7
Enter the amount on line 7 on line 1 of Chart 3.	==========

Chart 2: OAS pension and net federal supplements repayment

OAS pension from line 113 $ _______ 1

Net federal supplements from line 146 + _______ 2

Line 1 plus line 2 $ _______ 3

OAS pension you repaid in 1995 and claimed on line 232 - _______ 4

Line 3 minus line 4 (if negative, enter "0") $ _______ 5

Net income before adjustments from line 234 $ _______ 6

UI benefits repayment from line 7 in Chart 1 - _______ 7

Line 6 minus line 7 $ _______ 8

Base amount - 53,215.00 9 _________

Line 8 minus line 9 (if negative, enter "0") ======== 10 x 15% __________

Multiply line 10 by 15% and enter the result on this line $ _______ 11

OAS PENSION AND NET FEDERAL SUPPLEMENTS REPAYMENT: Enter the amount from line 5 or 11, whichever is less. $_______ 12

Enter the amount on line 12 on line 2 of Chart 3.

Chart 3: Total social benefits repayment

Amount from line 7 in Chart 1 $ _______ 1

Amount from line 12 in Chart 2 + _______ 2

TOTAL SOCIAL BENEFITS REPAYMENT: Line 1 plus line 2 $ _______ 3

Claim the total from line 3 as a deduction on line 235, and include it as an amount payable on line 422.

LINE 237 - ACCUMULATED FORWARD-AVERAGING AMOUNT WITHDRAWAL (For deemed residents)

If you made a forward-averaging election in a previous year, you may wish to bring some or all of your accumulated averaging amount into income on your 1995 return.

To bring some or all of your accumulated averaging amount into income on your 1995 return, complete Form T581, Forward Averaging Tax Credits, and attach it to your return. You have to file your return and Form T581 by the filing due date. You can get Form T581 from us.

Note
If you want to withdraw previously averaged amounts, the last return on which you will be able to do so will be on a return for the 1997 taxation year.

LINE 248 - EMPLOYEE HOME RELOCATION LOAN DEDUCTION (For deemed residents) Generally, you can enter on line 248 the amount shown as "Home Loan $xxx" in the footnotes area of your T4 slip. However, there is a maximum you can deduct. To find out the maximum allowable deduction for 1995, call the International Tax Services Office. The telephone listings are included with this package.

LINE 249 - STOCK OPTION AND SHARES DEDUCTIONS (For deemed residents)

Enter on line 249 the amount shown as "Stock-Option 110(1)(d) $xxx" or "Stock-Option 110(1)(d.1) $xxx" in the footnotes area of your T4 slip.

LINE 250 - OTHER PAYMENTS DEDUCTION (For deemed residents and for non- residents electing under section 217 of the Income Tax Act)

Enter the amount from line 147 of your return. This is the total of the Workers' Compensation payments, social assistance payments, and net federal supplements you entered on lines 144, 145, and 146.

Note
If your net income before adjustments (line 234) is more than $53,215 and you reported net federal supplements on line 146, you may not be entitled to enter the total amount from line 147 as a deduction on line 250. Contact us to determine how much you can deduct.

LINE 251 - LIMITED PARTNERSHIP LOSSES OF OTHER YEARS

If you had limited partnership losses in previous years that you have not already deducted, you may be able to claim part of these losses. For details, contact us.

You can carry forward limited partnership losses indefinitely. If you claim these losses, attach a statement showing a breakdown of your total losses and the year of each loss. You cannot use the amount in box 23 of your 1995 T5013 slip on your 1995 return.

LINE 252 - NON-CAPITAL LOSSES OF OTHER YEARS (For deemed residents and for non residents)

Deemed residents - Enter on line 252 the amount of your unapplied non- capital losses from 1988 to 1994, or your unapplied farming and fishing losses from 1985 to 1994, that you want to apply in 1995. There are restrictions on the amount of certain farm losses that you can deduct each year. If you have a farming or fishing business, get the income tax guide called Farming Income or the guide called Fishing Income for details.

If you need more information on losses, get Interpretation Bulletin IT-232, Non-Capital Losses, Net Capital Losses, Restricted Farm Losses, Farm Losses and Limited Partnership Losses - Their Composition and Deductibility in Computing Taxable Income.

Note
If you want to carry back your 1995 non-capital or farming and fishing loss to your 1992, 1993, or 1994 return, complete Form T1A, Request For Loss Carry-Back. Include this form with your 1995 return. Do not file an amended return for the year or years you want to apply the loss. You can get Form T1A from us.

Non-residents - Contact the International Tax Services Office for the special rules that apply to you.

LINE 253 - NET CAPITAL LOSSES OF OTHER YEARS (For deemed residents and for non residents)

Deemed residents - You can deduct, within certain limits, your net capital losses of previous years that you have not already claimed. For details, get the income tax guide called Capital Gains.

Note
If you incurred a net capital loss in 1995, and you want to apply it against taxable capital gains you reported on your 1992, 1993, or 1994 return, complete Form T1A, Request for Loss Carry-Back. Include this form with your 1995 return. Do not file an amended return for the year or years you want to apply the loss. You can get Form T1A from us.

Non-residents - Contact the International Tax Services Office for the special rules that apply to you.

LINE 254 - CAPITAL GAINS DEDUCTION (For deemed residents)

You can no longer claim a capital gains deduction for gains realized after February 22, 1994, other than qualified small business corporation shares and qualified farm property. However, if you owned capital property or eligible capital property at the end of February 22, 1994, and you have not used up all of your $100,000 capital gains exemption, there is a special election that may be available to you. This election will allow you to report a capital gain that accrued before February 23, 1994, so that you can benefit from the unused part of your $100,000 capital gains exemption. For more details, contact us or get the income tax guide called Capital Gains and the package called Capital Gains Election Package. These publications have the information and forms you will need to determine and calculate your deduction.

LINE 255 - NORTHERN RESIDENTS DEDUCTIONS (For deemed residents)

To make your claim, get a copy of the income tax guide called Northern Residents Deductions. The guide lists the areas that qualify, and includes a copy of the form you need to make your claim.

If you claimed northern residents deductions on your 1994 return, and you may qualify to claim this deduction for 1995, we will mail the guide to you at the address we have on record. If you did not claim these deductions last year, or if you do not receive your guide by late March, you can get a copy from us.

LINE 256 - ADDITIONAL DEDUCTIONS (For deemed residents, for non- residents and for non-residents electing under section 217 of the Income Tax Act)

EMPLOYMENT WITH A PRESCRIBED INTERNATIONAL ORGANIZATION

You can claim a deduction for your net employment income from certain international organizations such as the United Nations and its Specialized agencies, that you reported on this return. Net employment income is your employment income from these agencies minus the related employment expenses that you are claiming.

INCOME EXEMPT UNDER A TAX TREATY

You can deduct foreign income you included on your return that is tax- free in Canada because of a tax treaty. If you received foreign income and you do not know whether it is tax-free in Canada, contact us.

If you reported alimony or child support payments on line 128 that you received from a resident of another country, which are tax-free in Canada because of a tax treaty, you can deduct them on line 256. To find out if the alimony or child support payments you received are tax- free, contact us.

If you reported U.S. social security benefits on line 115, you can deduct 50% of these benefits on line 256, since that part is tax-free in Canada.

Note
The rules for reporting U.S. social security will change in 1996. See line 115 for details.

VOW OF PERPETUAL POVERTY

If you are a member of a religious order and have taken a vow of perpetual poverty, you can deduct the amount of earned income and pension benefits that you have given to the order. Attach a letter from your order or your employer stating that you have taken a vow of perpetual poverty.

STEP 5 - NON-REFUNDABLE TAX CREDITS

Non-refundable tax credits reduce the amount of income tax you owe. They are called non-refundable because, if the total of these credits is more than the amount you owe, you will not get a refund for the difference.

The information at lines 300 to 306 explains, in general, how to claim personal amounts.

(For non residents) Non-residents - You may be able to claim the non-refundable tax credits at lines 316, 320, 340, and 342 if they apply to your situation. You may be able to claim the other applicable non-refundable tax credits if you have reported at least 90% of your world income for the entire year on line 150 of your return. World income is income from sources inside and outside Canada.

Non-residents electing under section 217 (for non-residents electing under section 217 of the Income Tax Act)

We have not indicated a symbol for you in Step 5. To determine the non- refundable tax credits you are entitled to claim, you need to get the pamphlet called Electing Under Section 217 of the Income Tax Act. You can get the pamphlet from us.

Personal amounts for dependants who are non-residents of Canada (lines 303 and 306) - You may be able to claim a personal amount for certain individuals who are non-residents of Canada and who were dependent on you for support in 1995. You may be able to make this claim for your spouse (line 303), or for your or your spouse's children and grandchildren who were born in 1977 or earlier and who were mentally or physically infirm (line 306).

If your spouse, or your or your spouse's children or grandchildren already have enough income or assistance for a reasonable standard of living in the country in which they live, we do not consider them to depend on you for support. Also, we do not consider gifts you send them to be support.

Attach proof of your support payments to your return. The proof of payment has to show your name, the amount, the date of the payment, and the dependant's name and address. If you sent the funds to a guardian, the guardian's name and address also have to appear on the proof of payment.

LINE 300 - BASIC PERSONAL AMOUNT (For deemed residents and for non residents)

Claim the basic personal amount of $6,456.

LINE 301 - AGE AMOUNT (For deemed residents and for non residents)

If you were 65 or older on December 31, 1995, and your net income (line 236 of your return) is less than $49,134, you may be entitled to claim an age amount up to a maximum of $3,482. However, you cannot make this claim if your net income is $49,134 or more.

If your net income is $25,921 or less, enter $3,482 on line 301.

If your net income is more than $25,921 but less than $49,134, use the chart that follows to calculate your claim:

Calculation of the age amount

Maximum claim $ 3,482.00 1

Your net income from line 236 $ _______ 2

Base amount - 25,921.00 3

Line 2 minus line 3 $ _______ 4

x 15% 5

Multiply the amount on line 4 by 15% and enter the result on line 6 - _______ 6

Claim to enter on line 301: Line 1 minus line 6 (if negative, enter "0") $ _______ 7 =======

Date of birth - Be sure to enter your date of birth in the Identification area (Step 1) of your return.

Tax Tip

If you do not need all of your age amount to reduce your federal income tax to zero, you can transfer any unused amount to your spouse. See line 326 for details.

You may be able to claim all or part of your spouse's age amount. See line 326 for details.

LINE 303 - SPOUSAL AMOUNT (For deemed residents and for non residents)

If you supported your spouse (see the definition of spouse on page 9) in 1995, you may be able to claim part or all of the $5,380 spousal amount.

Calculate your claim on line 303 of your return. If your spouse had a net world income of $5,918 or more, you cannot claim a spousal amount.

NET WORLD INCOME OF SPOUSE

If you are a deemed resident, net world income is the amount from line 236 of your spouse's return, or the amount it would be if your spouse completed a return. If you are a non-resident, net world income is your spouse's net income for 1995 from sources both inside and outside Canada.

• If you were living with your spouse on December 31, 1995, you have to use your spouse's net world income for the whole year. This applies even if you got married in 1995, or if you separated and got back together in 1995.
• If you separated in 1995 because of a breakdown in your relationship, and were not back together on December 31, 1995 (for a common-law spouse, you have to be separated for a period of 90 days or more), you only have to reduce your claim by your spouse's net world income before the separation. If you also made alimony or maintenance payments to your spouse or former spouse, get the pamphlet called Alimony or Maintenance. It contains the information you will need to prepare your return correctly.

Tax Tip

If you cannot claim the spousal amount, or if you have to reduce your claim because of dividends your spouse received from taxable Canadian Corporations, you may be able to reduce your tax if you report all of your spouse's dividends. See line 120 for details.

LINE 305 - EQUIVALENT-TO-SPOUSE AMOUNT (For deemed residents and for non residents)

You may be able to claim all or part of the $5,380 equivalent-to-spouse amount if, at any time in the year, you were single, divorced, separated, or widowed and, at that time, you supported a dependant who was:

• under 18 (unless the dependant is your parent or grandparent, or was mentally or physically infirm);
• related to you by blood, marriage, or adoption;
• living with you in a home that you maintained; and
• residing in Canada (if the dependant is your child, the child does not have to reside in Canada).

We consider a dependant who was away from home while attending school to have lived with you if the dependant lived with you when not in school.

You cannot claim an equivalent-to-spouse amount:

• if you are claiming a spousal amount (see line 303);
• if you have a spouse, as defined on page 9, throughout 1995 (if you were separated but you reconciled during 1995, for the purposes of this claim, we consider you to have a spouse throughout 1995);
• for your common-law spouse (however, you may be able to claim the spousal amount on line 303);
• if someone else in your household is making this claim (each household is allowed only one claim for the equivalent-to-spouse amount); or
• for your child if you are entitled to deduct payments you made for that child's support. However, if this is the first year you are entitled to deduct such payments, there are special rules that apply. For details, get the pamphlet called Alimony or Maintenance.

HOW TO CLAIM

• Calculate your dependant's net world income. If you are a deemed resident, net world income is the amount from line 236 of your dependant's return, or the amount it would be if your dependant completed a return. If you are a non-resident, net world income is your dependant's net income for 1995 from sources both inside and outside Canada.
• Complete Schedule 5 to calculate your claim, and attach it to your return.

Note (for deemed residents)

You cannot split this amount with another person. Also, once you claim this amount for a dependant:

• no one else can claim this amount for that dependant; and
• neither you nor anyone else can claim an amount at line 306, "Amounts for infirm dependants age 18 or older," for that dependant.

LINE 306 - AMOUNTS FOR INFIRM DEPENDANTS AGE 18 OR OLDER (For deemed residents and for non residents)

You can claim an amount for your or your spouse's dependent child or grandchild only if that child or grandchild was mentally or physically infirm and was born in 1977 or earlier.

You can also claim an amount for a person who was resident in Canada and meets all of the following conditions. The person must have been:

• mentally or physically infirm;
• born in 1977 or earlier;
• dependent on you, or on you and others; and
• your or your spouse's parent, grandparent, brother, sister, aunt, uncle, niece, or nephew.

If you are entitled to deduct payments you made for your child's support, you cannot claim an amount at line 306, "Amounts for infirm dependants age 18 or older," for that child. However, if this is the first year you are entitled to deduct such payments, there are special rules that apply. For details, get the pamphlet called Alimony or Maintenance.

Note
A parent includes someone on whom you were completely dependent and who had custody and control of you while you were under 19 years of age.

HOW TO CLAIM

• Calculate the net world income of each of your dependants. If you are a deemed resident, net world income is the amount from line 236 of your dependant's return, or the amount it would be if your dependant completed a return. If you are a non-resident, net world income is your dependant's income for 1995 from sources both inside and outside Canada.
• Complete Schedule 6 and attach it to your return.
• You should have a signed statement from a doctor that gives the nature, commencement, and duration of the dependant's infirmity. Keep the signed statement in case we ask to see it.

Claims made by more than one person - If you and another person support the same dependant, you can each make a claim for that dependant. However, the combined claim that you and the other person make cannot be more than the maximum amount allowed for that dependant.

Tax Tip

You may be able to claim any unused part of your dependant's disability amount on your return. See line 318 for details.

LINE 308 - CANADA OR QUEBEC PENSION PLAN CONTRIBUTIONS THROUGH EMPLOYMENT

Enter the total of the amounts, in dollars and cents, shown in boxes 16 and 17 of your T4 slips. Do not enter more than $850.50.

If you contributed more than $850.50, enter the excess amount on line 448 of your return. We will refund the excess amount to you or use it to reduce your balance owing.

In some cases, you may have an overpayment, even if you contributed less than $850.50. For example, if during 1995 you turned 18 or 70, or you received a Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) retirement or disability pension, we will prorate your contributions. We will calculate your overpayment and show it on your Notice of Assessment. If you would like to calculate your CPP overpayment, get Form T2204, Calculation of Employee Overpayment of 1995 Canada Pension Plan Contributions and 1995 Unemployment Insurance Premiums.

Employment in Quebec - If you contributed to the QPP in 1995 but lived outside Quebec on December 31, 1995, treat the amount as if you contributed it to the CPP. Attach to your return a copy of the Relevé 1 slip that your employer sent to you.

Tax-exempt employment income earned by a registered Indian - If you are a registered Indian with tax-exempt employment income, and there is no amount shown in box 16 of your T4 slip, you may be able to contribute to CPP on this income. See the heading "Making additional CPP contributions" that follows for details.

MAKING ADDITIONAL CPP CONTRIBUTIONS

You may not have contributed to the CPP for certain income you earned through employment, or you may have contributed less than you were allowed. This can happen in any of the following situations:

• You had more than one employer in the same year.
• You had income, such as tips, from which your employer did not have to withhold contributions.
• You were in a type of employment that was not covered under CPP rules (such as casual employment).

To make more CPP contributions for 1995, complete Form CPT20, Election to Pay Canada Pension Plan Contributions, and attach it to your return. This form lists the eligible employment income on which you can make more CPP contributions. If you have not contributed the maximum of $850.50, you can contribute 5.4% on any part of this income. This may increase the pension you receive later.

Complete Schedule 8 to calculate your additional CPP contributions. The 1995 income limit on which you can contribute to CPP is $34,900. Enter on lines 310 and 421 the CPP contributions to be paid.

You can get Form CPT20 from us. You have to send us this form before May 1, 1997.

LINE 310 - CANADA OR QUEBEC PENSION PLAN CONTRIBUTIONS PAYABLE ON SELF-EMPLOYMENT AND OTHER EARNINGS (For deemed residents)

You can claim an amount for the Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) contributions that you have to make on self- employment earnings and on limited or non-active partnership income.

If you were a member of a partnership, make sure you include only your share of the net profit or loss.

If you have both wages and self-employment earnings, the amount of CPP or QPP contributions that you have to make on your self-employment earnings will depend on how much you have already contributed as an employee to the CPP or QPP. You cannot use your net business losses to reduce the CPP or QPP contributions that you paid on your employment earnings.

HOW TO CALCULATE YOUR CONTRIBUTIONS

Complete Schedule 8 to calculate your CPP or QPP contributions payable, and attach it to your return.

If you were not a resident of Quebec, use the amounts from lines 135 to 143 and line 122 of your return. Enter the required contributions in dollars and cents on line 310 and line 421.

If you were a resident of Quebec, use the amounts from line 134, lines 156 to 160 and line 171 of your Quebec provincial return. Enter the amount of the contributions in dollars and cents on line 310.

Note
In some situations, we will prorate your CPP or QPP contributions; for example, if during 1995 you turned 18 or 70, or you received a CPP or QPP retirement or disability pension. If this applies to you, we will calculate the correct amount and show it on your Notice of Assessment.

LINE 312 - UNEMPLOYMENT INSURANCE PREMIUMS (For deemed residents)

Enter the total, in dollars and cents, of the amounts shown in box 18 of all your T4 slips and T4F slips, up to the following limits:

• $1,271.40 for a 52-week pay period based on insurable earnings of up to $42,380;
• $1,295.85 for a 53-week pay period based on insurable earnings of $43,195; or
• $1,320.30 for 27 bi-weekly pay periods based on insurable earnings of $44,010.

Your insurable earnings are shown in box 24 of your T4 slip (or box 14, if box 24 is blank) or box 16 of your T4F slip. If you contributed more than the limit that applies to you, enter the excess amount on line 450. We will refund this excess amount to you or use it to reduce your balance owing.

In some cases, you may have overpaid your Unemployment Insurance premiums even if you contributed less than the maximum. If so, we will calculate your overpayment and show it on your Notice of Assessment. If you would like to calculate your overpayment, get Form T2204, Calculation of Employee Overpayment of 1995 Canada Pension Plan Contributions and 1995 Unemployment Insurance Premiums.

LINE 314 - PENSION INCOME AMOUNT (For deemed residents)

You may be able to claim up to $1,000, if you reported pension or annuity income on line 115 or line 129 of your return. Therefore, make sure you have reported your pension or annuity income on the correct lines of your return.

Pension or annuity income that you are not required to report on line 115 or line 129 of your return is not eligible for the pension income amount. Some of these amounts are: Old Age Security benefits, Canada Pension Plan benefits, Quebec Pension Plan benefits, Saskatchewan Pension Plan payments, death benefits, and retiring allowances.

Use the chart below to calculate your allowable claim.

---------------------------------------------------------------- Calculation of pension income amount

Enter the amount from line 115 $ _______ 1

Enter annuity payments from line 129 (box 16 of your T4RSP slip) only if you were 65 or older on December 31, 1995, or received the payments because of the death of your spouse + _______ 2

Add lines 1 and 2 $ _______ 3

Enter any foreign pension income from line 115 that you deducted on line 256 _______ 4

Enter any income from a U.S. individual retirement account included on line 115 + _______ 5

Add lines 4 and 5 - _______ 6

Line 3 minus line 6 $ _______ 7 ======= On line 314 of your return, enter $1,000 or the amount on line 7, whichever is less. ----------------------------------------------------------------

Tax Tip

If you do not need all of your pension income amount to reduce yourfederal income tax to zero, you can transfer any unused amount to your spouse. If your spouse had eligible pension income, you may be able to transfer your spouse's unused pension income amount to your own return. For details, see line 326.

LINE 316 - DISABILITY AMOUNT (For deemed residents and for non residents)

You may be able to claim a disability amount of $4,233 if:

• you had a severe mental or physical impairment in 1995, which caused you to be markedly restricted in your basic activities of daily living; and
• your impairment was prolonged; that is, your impairment has lasted, or is expected to last, for a continuous period of at least 12 months.

You may be markedly restricted in your basic activities of daily living if:

• you are blind; or
• you are unable to feed and dress yourself, eliminate (e.g., control bowel and bladder functions), walk, speak, hear, or perceive, think, and remember. You may also be markedly restricted if it takes you an extremely long time to perform any of these activities.

To qualify for the disability amount, your ability to perform an activity of daily living has to be markedly restricted all or almost all of the time, even with therapy and the use of appropriate aids and medication. If you are markedly restricted occasionally or part of the time, you are not entitled to this tax credit.

Note
If you receive a disability benefit, it does not necessarily mean that you are eligible to claim this credit.

If you or any other person claims medical expenses (line 330) for a full-time attendant that are more than $5,000 ($10,000 in the year of death), or for care in a nursing home because of your mental or physical impairment, you cannot claim the disability amount. You can claim your expenses or the disability amount, whichever is more favourable, but not both.

Tax Tip

If you meet certain conditions, you can claim both the disability amount (line 316), and either expenses for attendant care that allowed you to earn income (line 215), or expenses for part-time or full-time attendant care provided in Canada that are not more than $5,000 ($10,000 in the year of death) as a medical expense (line 330). See the explanations at these lines for details.

HOW TO CLAIM

• If you are claiming this amount for the first time, you have to submit a properly completed and certified Form T2201, Disability Tax Credit Certificate.
• If you were allowed the disability amount in 1994 and your condition did not change in 1995, you can claim the disability amount in 1995 without sending us another Form T2201. However, you have to send us one if the period stated on the certificate ended before 1995.

You can get Form T2201 from us. We will accept a photocopy of your Form T2201. However, your doctor's or optometrist's signature has to be an original, not a photocopy.

For more information, get a copy of the pamphlet called Tax Information for People with Disabilities. The pamphlet contains Form T2201.

Tax Tip

You may not need all of your disability amount to reduce your federal income tax to zero. If someone other than your spouse supports you, that person may be able to claim the unused part of your disability amount on line 318. If you have a spouse, your spouse can claim the unused part of your disability amount on line 326.

LINE 318 - DISABILITY AMOUNT TRANSFERRED FROM A DEPENDANT OTHER THAN YOUR SPOUSE (For deemed residents and for non residents)

If you have a dependant who is entitled to claim a disability amount (see line 316), you may be able to claim all or a part of your dependant's disability amount. You can claim the unused part of the disability amount for a dependant who lived in Canada or was a deemed resident of Canada at any time in 1995, if:

• you claimed an equivalent-to-spouse amount on line 305 for that dependant;
• the dependant was your or your spouse's child, grandchild, parent, or grandparent, and you could have claimed an equivalent-to-spouse amount on line 305 for that dependant if you did not have a spouse and if the dependant did not have any income;
• the dependant was your or your spouse's child or grandchild, and you made a claim on line 306, "Amounts for infirm dependants age 18 or older," for that dependant;
• the dependant was your or your spouse's child or grandchild, and you could have made a claim on line 306, "Amounts for infirm dependants age 18 or older," for that dependant if that dependant had no income and was 18 years of age or older in 1995; or
• the dependant was your or your spouse's parent or grandparent, and you could have made a claim on line 306, "Amounts for infirm dependants age 18 or older," for that dependant if that person had no income.

If you are entitled to deduct payments you made for your child's support, you cannot claim a disability amount for your child. There is an exception if this is the first year you are entitled to deduct such payments. For details, get the pamphlet called Alimony or Maintenance.

If you or anyone else claims medical expenses for a full-time attendant that are more than $5,000 ($10,000 in the year of death), or for care in a nursing home because of your dependant's mental or physical impairment, you cannot claim the disability amount. You can claim the expenses or the disability amount, whichever is more favourable, but not both. However, you may be able to claim both the disability amount and medical expenses for part-time or full-time attendant care provided in Canada that are not more than $5,000 ($10,000 in the year of death). See line 330 for details.

HOW TO CLAIM

• Use the chart in this section to calculate how much of each dependant's disability amount you can claim.
• Attach to your return your dependant's Form T2201, Disability Tax Credit Certificate. If you were allowed a disability amount in a previous taxation year and the dependant's condition has not changed, you can claim the disability amount in 1995 without sending us another Form T2201. However, you have to send us a new form if the period stated on the certificate ended before 1995.

Calculation of the unused part of your dependant's disability amount

Dependant's disability amount $ 4,233.00 1

Enter the total amounts your dependant is entitled to claim on lines 300 to 314 + _________ 2

Line 1 plus line 2 $ _______ 3

Enter dependant's taxable income (line 260) - ________ 4

Line 3 minus line 4 (if negative, enter "0") $ _______ 5 ======= Enter on line 318 the amount on line 5 or $4,233, whichever is less. ----------------------------------------------------------------

If more than one person is making a claim for the same dependant, attach a note to your return including the name and social insurance number of anyone else making a claim. The total amount claimed for that dependant cannot be more than the amount on line 5 or $4,233, whichever is less.

This credit is only available to a supporting person if the spouse of the person with a disability is not already claiming the disability tax credit or any other non-refundable tax credit (other than medical expenses) for the person with a disability.

LINE 320 - TUITION FEES (For deemed residents and for non residents)

You can claim, on your 1995 return, the tuition fees paid for courses you took from January 1 to December 31, 1995. You cannot claim other expenses, such as books, or board and lodging.

To qualify, the total tuition fees you paid for the year to any one educational institution had to be more than $100.

Non-residents - You can claim tuition fees if you were enrolled in a qualifying educational institution in Canada, or enrolled full-time at a university outside Canada in a course that was at least 13 consecutive weeks long, and that would lead to a degree.

Deemed residents - You can claim tuition fees paid to:

• a university, college, or other educational institution for courses at the post-secondary school level; or
• an institution certified by the Minister of Human Resources Development, if you were 16 or older on December 31, 1995, and the fees were for a course that developed or improved your skills in an occupation.

If your employer or your parent's employer paid your tuition fees, you can only claim them if the amount paid is included in your income or your parent's income. If your tuition fees are paid by a federal or provincial job training program, and no related amount is included in your income, the fees do not qualify for this credit.

Tax Tip

You have to claim your tuition fees even if someone else paid them. However, you may not need all of your tuition fees to reduce your federal income tax to zero. To determine if you can transfer all orpart of your tuition fees to your or your spouse's parent or grandparent, or to your spouse, see lines 324 and 326.

HOW TO CLAIM

If you are claiming tuition fees paid to an institution in Canada, you must have either an official tax receipt or Form T2202A.

If you are claiming tuition fees paid to an educational institution outside Canada, you must have your educational institution complete Form TL11A (for a university outside Canada) or Form TL11D for deemed residents.

If you are claiming tuition fees paid to a flying school or club in Canada, you must have your school or club complete Form TL11B.

You can get these forms from us. You can also get Form TL11B from your flying school or club.

Receipts - Do not include your receipts or forms with your return. However, you have to keep them in case we ask to see them.

LINE 322 - EDUCATION AMOUNT (For deemed residents and for non residents)

You can claim an education amount of $80 for each whole or part month in 1995 that you were enrolled in a qualifying educational program. In most cases, you have to be enrolled as a full-time student.

You must have a Form T2202 or T2202A, completed by your educational institution, that confirms the period you were enrolled in a qualifying program.

PART-TIME STUDENTS

If you were enrolled in a qualifying program but can only attend part- time because of a mental or physical impairment, you can claim an education amount. You have to complete Form T2202 to make your claim as a part-time student.

HOW TO CLAIM

• Multiply the number of months shown on your Form T2202 or T2202A (maximum 12) by $80.
• Enter your claim on line 322 of your return.

You cannot claim the education amount for a program if you:

• received an allowance for that program (such as a training allowance under the Unemployment Insurance Act or National Training Act);
• received a benefit for that program (such as free board and lodgings from a nursing school);
• received a grant for that program;
• were reimbursed for the cost of your courses, other than by award money you received; or
• were receiving salary or wages while taking a job-related course.

Note
An allowance, benefit, grant, or reimbursement does not include any scholarship, fellowship, bursary, or prize you received, or any benefit you received under the Canada Student Financial Assistance Act, or Student Loans and Scholarships Act of the Province of Quebec.

Receipts - Do not include your form with your return. However, you have to keep it in case we ask to see it.

Tax Tip

You may not need all of your education amount to reduce your federal income tax to zero. If you do not, and certain other conditions are met, you may be able to transfer all or part of your education amount to your or your spouse's parent or grandparent, or to your spouse. Seelines 324 and 326 for details.

LINE 324 - TUITION FEES AND EDUCATION AMOUNT TRANSFERRED FROM A CHILD (For deemed residents and for non residents)

Students who do not need to claim all of their eligible tuition fees (line 320) or their education amount (line 322) may be able to transfer the unused part to you, if you are the parent or grandparent of that student or of that student's spouse. However, if the total of the tuition fees and education amount that a student needs to claim on his or her return is $4,000 or more, you are not entitled to claim a transfer from that student.

HOW TO CLAIM

The student has to use Form T2202 or the back of Form T2202A to calculate the transfer amount and to designate you as the parent or grandparent. If the tuition fees being transferred to you are not shown on the Form T2202 or T2202A, you should have a copy of the student's official tuition fees receipt.

Student with a spouse - If a student's spouse claims the spousal amount (line 303) or the amounts transferred from the spouse (line 326), you cannot claim the tuition fees and education amount transfer. However, the student's spouse can claim the transfer on Schedule 2.

Student claimed as a dependant - If another parent or grandparent claims the student as a dependant (lines 305 or 306), only that person can claim the tuition fees and education amount transferred from the student.

Student not claimed as a dependant - The student has to choose the parent or grandparent who can claim the tuition fees and education amount transfer. Only one person can claim the transfer from the student.

Receipts - Do not include Form T2202, Form T2202A, or the student's official tuition fees receipt with your return. However, you have to keep them in case we ask to see them.

LINE 326 - AMOUNTS TRANSFERRED FROM YOUR SPOUSE (For deemed residents and for non residents)

You can transfer from your spouse (see definition of spouse on page 9) any of the following amounts that your spouse does not need to reduce his or her federal income tax to zero:

• the age amount (if your spouse was 65 or older);
• the pension income amount;
• the disability amount; and
• tuition fees and the education amount.

Use Schedule 2 to calculate your claim and attach a completed copy to your return. Be sure to show your marital status, and your spouse's name and social insurance number in the Identification area on page 1 of your return.

Receipts - Attach to your return your spouse's Form T2201, Disability Tax Credit Certificate. If you were allowed a disability amount in a previous taxation year, and your spouse's condition has not changed, you can claim the disability amount without sending us another Form T2201. However, you have to send us a new form if the period stated on the certificate ended before 1995.

Do not include your spouse's receipts or forms for tuition fees or the education amount with your return. However, you have to keep them in case we ask to see them.

Note
You cannot transfer any unused amounts from your spouse if you were separated because of a breakdown in your relationship at the end of the year, and for a period of 90 days or more that included December 31, 1995.

LINE 330 - MEDICAL EXPENSES (For deemed residents and for non residents)

You can claim medical expenses that were paid for:

• yourself;
• your spouse;
• your or your spouse's children or grandchildren who were dependent on you for support; and
• your or your spouse's parent, grandparent, brother, sister, uncle, aunt, niece, or nephew who lived in Canada (or were deemed residents of Canada), and who were dependent on you for support.

Note
If you claim medical expenses for a dependant, other than your spouse, whose net income is more than $6,456, see line 331 for more details.

You can claim medical expenses that were paid in any 12-month period ending in 1995 and were not claimed in 1994.

Your total expenses have to be more than either 3% of your net income (line 236) or $1,614, whichever is less.

HOW TO CLAIM

Calculate your allowable medical expenses as follows:

• Decide the 12-month period ending in 1995 for which you will claim the medical expenses (you cannot include any expenses that were deducted on your 1994 return).
• Total your allowable medical expenses, and enter the total on line 330.
• Attach your receipts to your return.

ALLOWABLE MEDICAL EXPENSES

The following are some examples of medical expenses you can claim:

• payments to a doctor, dentist, or nurse, or to a public or licensed private hospital;
• payments for artificial limbs, wheelchairs, crutches, hearing aids, prescription eyeglasses, contact lenses, dentures, pacemakers, and prescription drugs;
• payments for certain prescription medical devices;
• expenses for modifying your home to allow you or a person for whom you can claim medical expenses to be mobile and functional, if you or the person has a mobility impairment, or lacks normal physical development;
• expenses for guide and hearing-ear dogs;
• premiums paid to private health services plans (do not send us the receipts);
• the cost of visual or vibratory signalling devices to help people with a hearing impairment (for example, a visual fire alarm); and
• payments for rehabilitative therapy to help people adjust to a speech or hearing loss, including training in lip-reading and sign language.

Reimbursements - You cannot claim medical or dental expenses for which you have been or will be reimbursed. However, you can claim the expense if the reimbursement is included in your income, such as a benefit shown on a T4 slip, and you did not deduct the reimbursement anywhere else on your return.

Example

Daniel was in the hospital while on vacation in Mexico. He paid $2,800 in Canadian dollars for allowable medical expenses (allowable medical expenses are not limited to those paid in Canada). He was reimbursed for $1,500 of these expenses by his provincial health care plan. He did not include the reimbursement in income. Therefore, Daniel can claim the remaining $1,300.

Travelling expenses - If medical treatment is not available locally, you may be able to claim the cost of travelling to get the treatment somewhere else. Attach to your return your receipts and a statement listing your travelling expenses.

EXPENSES FOR AN ATTENDANT OR FOR FULL-TIME CARE IN A NURSING HOME

You may be able to claim either:

• amounts paid for a full-time attendant, provided the expenses were paid to a person who is not your spouse and is 18 years of age or older, or for full-time care in a nursing home (a doctor has to certify by letter or signing a valid Form T2201, Disability Tax Credit Certificate, that the person receiving such care had a severe mental or physical impairment in 1995); or
• amounts paid for part-time or full-time attendant care provided in Canada that are not more than $5,000 ($10,000 in the year of death). You can claim these expenses if the patient is entitled to claim the disability amount (line 316), and the expenses were paid to a person 18 years of age or older who is not your spouse. However, if you made a claim for either attendant care expenses on line 215 or child care expenses on line 214 for that patient, you cannot make this claim.

Note
If you claim expenses paid for a full-time attendant that are more than $5,000 ($10,000 in the year of death), or for full-time care in a nursing home, neither you nor anyone else can claim a disability amount for the disabled person. You can claim the more favourable amount, but not both. Compare with line 316 to decide which claim is better.

Tax Tip

If you meet certain conditions, you can claim the disability amount (line 316), and either expenses for attendant care that allowed you to earn income (line 215), or expenses for part-time or full-time attendant care provided in Canada that are not more than $5,000 ($10,000 in the year of death) as a medical expense (line 330). See the explanations at these lines for details.

For more information on medical expenses, get Interpretation Bulletin IT-519, Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction.

LINE 331 - MEDICAL EXPENSES ADJUSTMENT (For deemed residents and for non residents)

If you claimed medical expenses for a dependant whose net income was more than $6,456, you have to reduce your medical expenses.

To calculate your adjustment, complete the chart that follows. This does not apply to medical expenses you are claiming for your spouse.

---------------------------------------------------------------- Calculation of medical expenses adjustment

Dependant's net income (line 236 of your dependant's return or what it would be if your dependant completed a return) $ _______ 1

Basic personal amount - 6,456.00 2

Line 1 minus line 2 (if negative, enter "0") $ _______ 3

x 4 _______ MEDICAL EXPENSE ADJUSTMENT: Multiply the amount on line 3 by 4 $ _______ 4 ======= Complete this calculation for each dependant for whom you claimed medical expenses. Add all the amounts from line 4 together, and enter the total on line 331 of your return. ----------------------------------------------------------------

Tax Tip

If the medical expenses adjustment you calculate for a dependant is more than the medical expenses you claimed for that dependant, it is not to your benefit to claim the medical expenses for that dependant.

LINE 335 (For deemed residents, for non-residents and for non-residents electing under section 217 of the Income Tax Act)

You do not have to complete the rest of Step 5 if the amount on line 335 is the same as, or more than, the amount on line 260, and is less than $29,591. If this is the case, go to Step 6, enter "0" on line 406, and complete the rest of your return.

In any other case, see line 338.

LINE 338 (For deemed residents, for non-residents and for non-residents electing under section 217 of the Income Tax Act)

To calculate your non-refundable tax credits, multiply the amount on line 335 by 17%. If you are not claiming charitable donations or cultural, ecological, and government gifts, transfer your credits from line 338 to line 350 and go to Step 6.

Capital gains and capital gains deduction. . . . . . . . . .15, 26

LINE 340 - CHARITABLE DONATIONS (For deemed residents and for non residents)

You can claim the lower of:

• the total donations made in 1995 plus any donations made in any of the previous five years that you did not claim before; and
• 20% of your net income (line 236).

Tax Tip

You can claim donations that your spouse made as long as your spouse will not claim them.

You can claim a tax credit of 17% of your donations up to and including $200, and 29% of your donations that are more than $200.

To qualify, the donations have to be made to:

• Canadian registered charities;
• registered Canadian amateur athletic associations;
• prescribed universities outside Canada;
• Canadian non-profit organizations that only provide low-cost housing for seniors;
• Canadian municipalities;
• registered national arts service organizations;
• the United Nations (or its Specialized agencies); or
• charities outside Canada to which the Government of Canada has made a donation in 1994 or 1995.

Note
If you are a member of a religious order and you have taken a vow of perpetual poverty, claim your deduction on line 256 of your return.

RECEIPTS

Attach to your return official receipts for all donations you are claiming, except for those shown in box 46 of your T4 or T4A slip, box 36 of your T3 slip, box 34 of your T5013 slip, or those allocated to you by a partnership in its financial statements. If you included such receipts with a previous return, please attach a note to tell us in which return this was.

We will not accept as proof of payment cancelled cheques, photocopies (unless the issuer certifies them to be true copies), credit card slips, pledge forms, or stubs.

DONATIONS OTHER THAN CASH

You may be able to claim donations other than cash. For details, get the pamphlet called Gifts and Income Tax. If you donated land, see line 342 for more details.

DONATIONS TO U.S. CHARITIES

You can claim donations to U.S. charities that would be allowed on a U.S. return as long as they are not more than 20% of your net U.S. income, which you report on your Canadian return. However, you can use the limit of 20% of the net income on your Canadian return (line 236) if you lived near the border in Canada throughout the year and commuted to your workplace or business in the U.S. You can only use this limit if your main source of income for the year is from that employment or business.

CARRYING FORWARD DONATIONS

You do not have to claim the charitable donations you made in 1995 on your 1995 return. You can carry them forward and claim them for up to five years, as long as you only claim them once.

If you need more details on charitable donations, get Interpretation Bulletin IT-110, Deductible Gifts and Official Donation Receipts, and its Special Release.

LINE 342 - CROWN, ECOLOGICAL, AND GOVERNMENT GIFTS (For deemed residents and for non residents)

Enter on line 342 the amount of your gift to Canada, a province, or territory. Attach your receipt to your return (unless the amount is shown on a T5013 slip or is allocated to you by a partnership in its financial statements). You have to report any capital gain or loss on the property (other than cultural property) that you donated to Canada, a province, or territory. See the income tax guide called Capital Gains for details.

You can include the amount of your gift to a designated institution for property that the Canadian Cultural Property Export Review Board has certified. Attach to your return both the official receipt and Form T871, Cultural Property Income Tax Certificate.

Under proposed legislation, you can claim the amount of your gift of land, donated after February 27, 1995, to a Canadian municipality, or a registered charity that the Minister of the Environment has designated. The land must be certified by that Minister to be important to the preservation of Canada's environmental heritage. Attach to your return both the official receipt and the certificate called, Certificate for Donation of Ecologically Sensitive Land, issued by the Minister of the Environment. You may have to report any capital gain or loss on the property that you donated. For details, see the income tax guide called Capital Gains.

Unlike other donations, your claim for these types of donations is not limited to 20% of your net income. You can choose the part of your donations you want to claim in the year and you can carry forward any unused part for up to five years.

If you need more information, get the pamphlet called Gifts and Income Tax.

Note
If you make a monetary gift to Canada, you can choose to apply it to the Debt Servicing and Reduction Account. Make your gift out to the Receiver General for Canada and mail it to: Place du Portage, Phase 3, 11 Laurier Street, Hull, QC K1A 0S5. Public Works and Government Services Canada will provide you with a receipt. Be sure to include a note saying that you want your gift applied to this account. All such gifts will only be used to service the public debt.

LINES 346 AND 348 - CHARITABLE DONATIONS CREDIT (For deemed residents and for non residents)

To calculate your credit, follow the instructions in Step 5 of your return (lines 344 to 348).

STEP 6 - REFUND OR BALANCE OWING

LINE 400 - TAXABLE INCOME (For deemed residents, for non-residents and for non-residents electing under section 217 of the Income Tax Act)

Generally, the tax you have to pay is based on your taxable income (line 260).

We have replaced the tax tables with a simplified tax calculation. Use Schedule 1, Federal Tax Calculation, to determine your federal income tax, federal non-resident and deemed resident surtax, and federal individual surtax. For details, see the section called Schedule 1, Federal Tax Calculation, on page 39.

MINIMUM TAX

Read the following information to determine if minimum tax applies to you and whether you will need to complete Form T691, Calculation of Minimum Tax.

Minimum tax limits the tax advantage you can receive in a year from certain incentives. You have to pay minimum tax if this tax is more than the federal tax you calculate in the usual manner. You are allowed a basic exempt amount of $40,000 in calculating your taxable income for this tax. Minimum tax does not apply to people who died in 1995.

You may have to pay minimum tax if any of the following situations apply to you:

A. You claimed any of the following tax credits:

• an investment tax credit on line 412;
• an overseas employment tax credit;
• a federal political contribution tax credit on lines 409 and 410; or
• a labour-sponsored funds tax credit on line 414.

B. You reported a taxable capital gain on line 127.

C. You claimed any of the following:

• a deduction on line 207 for RPP contributions;
• a deduction on line 208 for RRSP contributions which were based on your 1995 RRSP deduction limit;
• a deduction for transferring retiring allowances to an RRSP (line 208) or an RPP (line 207);
• a deduction on line 248 for an employee home relocation loan;
• a loss (including your share of a partnership loss) resulting from, or increased by, claiming capital cost allowance on certified films and videotapes;
• a loss from resource properties resulting from, or increased by, claiming a depletion allowance, exploration expenses, development expenses, or Canadian oil and gas property expenses; or
• a deduction on line 249 for employee stock option and shares.

In most cases, you can determine whether you have to pay this tax by totalling the deductions mentioned in paragraph C above and one-third of the taxable capital gain amount on line 044 of Schedule 3. If the total is $40,000 or less, you probably do not have to pay minimum tax. If the total is more than $40,000, you may have to pay this tax. To calculate if you have to pay minimum tax, get Form T691, Calculation of Minimum Tax, from us.

Example

Josh claimed a deduction in 1995 for transferring $50,000 of his retiring allowance to his registered retirement savings plan. Since the deduction he claimed for transferring his retiring allowance to an RRSP is more than $40,000, Josh will probably have to pay minimum tax. To be certain, he should complete Form T691, Calculation of Minimum Tax.

Tax Tip

If you paid minimum tax for any years from 1988 to 1994, but you do not have to pay minimum tax for 1995, you may be able to apply the minimum tax you paid in those years against your 1995 taxes. See line 504 for details.

LINES 409 AND 410 - FEDERAL POLITICAL CONTRIBUTION TAX CREDIT (For deemed residents)

Enter on line 409 the total you contributed during 1995 to a registered federal political party or a candidate for election to the House of Commons.

Use the chart that follows to calculate the credit you can enter on line 410. If your total political contributions are $1,150 or more, enter $500 on line 410. ----------------------------------------------------------------

Calculation of federal political contribution tax credit

IF YOUR TOTAL FEDERAL CONTRIBUTION IS $100 OR LESS:

Your total contribution $_____ x 75% = $ _______ 1

Enter on line 410 of your return the amount on line 1.

IF YOUR TOTAL FEDERAL CONTRIBUTION IS MORE THAN $100 BUT NOT MORE THAN $550:

Your total contribution $ _______

On the first - 100.00 credit is $ 75.00 1

On the rest $ _______ x 50% = + _______ 2

Add lines 1 and 2 $ _______ 3

Enter on line 410 of your return the amount on line 3.

IF YOUR TOTAL FEDERAL CONTRIBUTION IS MORE THAN $550:

Your total contribution $ _______

On the first - 550.00 credit is $ 300.00 1

On the rest $ _______ x 33.33% = + _______ 2

Add lines 1 and 2 $ _______ 3 ======= Enter on line 410 of your return, the amount from line 3 or $500, whichever is less.

Receipts - Attach to your return your official receipts (unless the amount is shown in box 36 of your T5013 slip, or in the financial statements a partnership gives to you).

LINE 412 - INVESTMENT TAX CREDIT (For deemed residents)

You may be eligible for this credit if any of the following apply to you:

• You bought certain new buildings, machinery, or equipment and they were used in certain areas of Canada in qualifying activities such as farming, fishing, logging, or manufacturing.
• You bought qualified small business property after December 2, 1992, and before 1994.
• You received a T101 or T102 slip with an amount in box 13.
• You received a T3 slip with an amount in box 41.
• You received a T5013 slip with an amount in box 38, or an amount is shown in the financial information given to you by a partnership.

HOW TO CLAIM

Attach a completed copy of Form T2038(IND.), Investment Tax Credit (Individuals), to your return.

For a general explanation of the investment tax credit, get either the income tax guide called Farming Income or the guide called Fishing Income. You can get these guides and Form T2038(IND.) from us.

Tax Tip

You may be able to reduce your federal individual surtax by any unclaimed investment tax credit, or claim a refund of your unused investment tax credit. For details, see lines 419 and 454.

LINES 413 AND 414 - LABOUR-SPONSORED FUNDS TAX CREDIT (For deemed residents, for non-residents and for non-residents electing under section 217 of the Income Tax Act)

You may be able to claim a credit of up to $1,000 if you acquired, or irrevocably subscribed and paid for, an approved share of the capital stock of a prescribed labour-sponsored venture capital corporation at any time from January 1, 1995, to February 29, 1996. You also had to be the first registered holder of the approved share.

If you acquired, or irrevocably subscribed, and paid for an approved share between January 1, 1995, and March 1, 1995, and claimed the credit for it on your 1994 return, you cannot claim a credit for that share on your 1995 return.

Enter your net cost on line 413. Net cost is the amount you paid for your shares minus any government assistance, other than federal or provincial tax credits on the shares. Enter your allowable credit, which may not be more than 20% of the net cost, up to a maximum of $1,000, on line 414.

Receipts - To make a claim, you have to file with your return either a T5006 slip, Statement of Registered Labour-Sponsored Venture Capital Corporation Class A Shares, or an official provincial slip.

LINE 419 - FEDERAL INDIVIDUAL SURTAX (For deemed residents, for non- residents and for non-residents electing under section 217 of the Income Tax Act)

You have to pay a federal individual surtax of 3% of your basic federal tax after deducting any federal forward-averaging tax credit you are entitled to claim on your 1995 return. If your basic federal tax less your federal forward-averaging tax credit is more than $12,500, you have to pay an extra surtax of 5% (for a total of 8%) on the amount that is more than $12,500. Use Schedule 1 to determine your federal individual surtax.

Tax Tip

If you can claim a foreign tax credit or investment tax credit, you may be able to reduce the federal individual surtax you have to pay by the unused part of these credits. For details, get Form T2209, Calculation of Federal Foreign Tax Credits, and Form T2038(IND.), Investment Tax Credit (Individuals).

LINE 421 - CANADA PENSION PLAN CONTRIBUTIONS PAYABLE ON SELF-EMPLOYMENT AND OTHER EARNINGS (For deemed residents)

Enter the Canada Pension Plan contribution you have to pay, as calculated on Schedule 8.

LINE 422 - SOCIAL BENEFITS REPAYMENT (For deemed residents)

Enter the amount of social benefits you have to repay, as calculated in the charts under line 235 in this guide.

LINE 428 - PROVINCIAL OR TERRITORIAL TAX (For deemed residents)

This line applies to you only if you are a deemed resident and had income from a business with a permanent establishment in a province or territory in Canada in 1995. If this is the case, complete Form T2203, Calculation of Tax for 1995 - Multiple Jurisdictions, to calculate the provincial or territorial tax you have to pay (except for Quebec tax). Attach a copy of the form to your return.

LINE 437 - TOTAL INCOME TAX DEDUCTED (For deemed residents, for non- residents and for non-residents electing under section 217 of the Income Tax Act)

Enter the total of the amounts shown in the "Income tax deducted" box from all of the information slips in your name.

If you are subject to Quebec tax, do not include any Quebec provincial income tax deducted on this return.

Note
If you paid foreign taxes in 1995, you may be entitled to a foreign tax credit. To claim this credit you have to complete Schedule 1, Federal Tax Calculation.

LINE 448 - CANADA PENSION PLAN OVERPAYMENT (For deemed residents)

If you are not subject to Quebec tax and you contributed more than you had to, as explained at line 308, enter the difference on line 448. We will refund the excess contributions to you or use them to reduce your balance owing.

LINE 450 - UNEMPLOYMENT INSURANCE OVERPAYMENT (For deemed residents)

If you contributed more than the maximum amount that applies to you, as explained at line 312, enter the difference on line 450. We will refund the excess premiums to you or use them to reduce your balance owing.

Note
If you had to repay some of the Unemployment Insurance benefits you received, do not claim the repayment on this line. See line 232 for details on how to claim a deduction for the benefits you repaid.

LINE 454 - REFUND OF INVESTMENT TAX CREDIT (For deemed residents)

If you are eligible for an investment tax credit (line 412), based on expenditures you made in 1995, you may be able to claim a refund of your unused investment tax credit.

Calculate the refundable part of your investment tax credit on Form T2038(IND.), Investment Tax Credit (Individuals).

The refund you claim reduces the amount of credit available to you for other years.

LINE 456 - PART XII.2 TRUST TAX CREDIT (For deemed residents)

Enter the amount shown in box 38 of your T3 slip.

LINE 457 - EMPLOYEE AND PARTNER GST REBATE

If you deducted expenses from your income as an employee (lines 212 or 229) or as a partner (lines 135 to 143), you may be eligible for a rebate of the GST you paid for these expenses.

Generally, you can claim a rebate of the GST you paid if:

• you are an employee whose employer is a GST registrant (i.e. your employer has a registration number and files a GST return); or
• you are a member of a registered partnership, and you have reported on your return your share of the income from that partnership.

To claim this rebate, get the publication called Completion Guide and Form for: Employee and Partner GST Rebate from us. The guide lists the expenses that qualify. It also includes a copy of Form GST-370, Employee and Partner Goods and Services Tax Rebate, which you need to make your claim. Attach a completed copy of this form to your return.

Note
Generally, any rebate you receive has to be reported in income in the year in which you receive the rebate. For example, if you claim and are allowed a rebate on your 1995 return, and that return is assessed in 1996, you have to report the rebate you received on your 1996 return.

You may have received a GST rebate in 1995. If you did and you are an employee, see line 104. If you are a partner, get the income tax guide called Business and Professional Income.

LINE 476 - TAX PAID BY INSTALMENTS (For deemed residents and for non residents)

If you made instalment payments for your 1995 taxes, enter on line 476 your total instalments. We will be able to process your return faster if you correctly enter the instalment payments you made for 1995.

In February 1996, we will issue you either Form INNS1, Instalment Reminder, or Form INNS2, Instalment Payment Summary, that shows your total 1995 instalment payments that we have on record. If you made an instalment payment for your 1995 taxes that does not appear on this reminder or summary, also include that amount on line 476.

Non-residents - If you disposed of taxable Canadian property in 1995, enter the amount of tax withheld on the disposition.

LINE 478 - FORWARD-AVERAGING TAX CREDIT (For deemed residents)

If you are withdrawing some of your forward-averaging amount on line 237, enter the total forward-averaging tax credit from Form T581, Forward Averaging Tax Credits, on line 478. See line 237 for details.

LINES 484 AND 485 - REFUND OR BALANCE OWING (For deemed residents, for non-residents and for non-residents electing under section 217 of the Income Tax Act).

Your refund or balance owing is the difference between your total payable (line 435) and your total credits (line 482).

If your total payable (line 435) is less than your total credits (line 482), enter the difference on line 484. This amount is your refund.

If your total payable (line 435) is more than your total credits (line 482), enter the difference on line 485. This amount is your balance owing.

If the difference is less than $2, you do not have to make a payment and you will not receive a refund.

LINE 484 - REFUND (For deemed residents, for non-residents and for non- residents electing under section 217 of the Income Tax Act)

If you are expecting a refund for 1995, but our records show that you owe an amount, or are about to owe an amount for another year, we may keep some or all of your refund and apply it against the amount you owe.

We may also have to apply your income tax refund against certain outstanding government debts. The most common types of government debts are: a Canada Student Loan, an Unemployment Insurance benefit overpayment, an Immigration loan, and a training allowance overpayment. We may also apply your refund to satisfy a garnishment order under the Family Orders and Agreements Enforcement Assistance Act.

DIRECT DEPOSIT

You can have your income tax refund, GST credit, and your Child Tax Benefit payments deposited directly into your account at a financial institution in Canada.

To start direct deposit, or to change information you already provided to us, complete the Direct Deposit Request at the bottom of page 4 of your return. You don't have to complete this area if you already have direct deposit service and the information you provided before hasn't changed.

Your direct deposit request will stay in effect until you change the information or cancel the service. However, if your financial institution advises us that you have a new account, we may deposit your payments into the new account. If we cannot deposit a payment into a designated account, we will mail a cheque to you at the address we have on file.

If you need help to complete the information on page 4, or to cancel direct deposit service for one or more of these payments, contact us.

Note
If you want your Child Tax Benefit payments deposited into a different account, you will have to send us a completed Form T1- DD(1), Direct Deposit Request - Individuals. You can get this form from us.

If you are changing the account to which we deposit a payment, do not close the old account before we deposit the payment into the new account.

LINE 485 - BALANCE OWING (For deemed residents and for non residents)

Attach to the front of your return a cheque or money order made out to the Receiver General. Do not mail cash. To help us credit your payment properly, please write your social insurance number on the back of your cheque or money order.

Enter the amount of your payment on line 486.

Paying your balance owing with postdated cheques - If you pay your balance owing with postdated cheques, your Notice of Assessment will not take into account the cheques that are still postdated when we prepare the notice. We will credit them to your account when they become negotiable and will send you an acknowledgement. However, we will charge compound interest from April 30, 1996, until you pay the account in full.

Note
If you cannot pay your balance owing when you file, contact us to arrange a payment schedule. See the telephone listings included with this package.

Tax Tip

You can avoid a late-filing penalty by filing your return on or before the due date. See page 6 for details.

SCHEDULE 1, FEDERAL TAX CALCULATION (LINES 500 TO 518) (For deemed residents, for non-residents and for non-residents electing under section 217 of the Income Tax Act)

There are two methods (Method A or Method B) on Schedule 1 that you can use to calculate your federal tax and surtax for non-residents and deemed residents of Canada. If you have a straightforward tax situation, use Method A, and follow the instructions on Schedule 1. If you have to use Method B, the information that follows will help you complete Schedule 1.

If you have to pay minimum tax, or if you are claiming an overseas employment tax credit, see Form T691, Calculation of Minimum Tax, or Form T626, Overseas Employment Tax Credit Calculation, before completing the schedule.

LINE 500 - TAX ADJUSTMENTS (For deemed residents, for non-residents and for non-residents electing under section 217 of the Income Tax Act)

You may be entitled to a tax adjustment if you:

• reported on lines 114 and 152 of your return a lump-sum Canada Pension Plan or Quebec Pension Plan disability benefit; or
• reported on line 130 of your return a lump-sum amount from your pension or deferred profit-sharing plan for benefits that accrued before 1972.

If either of these situations apply to you, we will use this line to record any tax adjustment to which you are entitled.

LINE 502 - FEDERAL DIVIDEND TAX CREDIT (For deemed residents)

If you reported dividends on line 120, enter the dividend tax credit on line 502. This amount is the total of the dividend tax credits from taxable Canadian corporations shown on the dividend information slips. If you didn't receive dividend information slips, the dividend tax credit is 13.33% of the taxable amount of dividends from taxable Canadian corporations (see line 120).

Note
Foreign dividends do not qualify for this credit.

LINE 504 - MINIMUM TAX CARRY-OVER (For deemed residents, for non- residents and for non-residents electing under section 217 of the Income Tax Act)

If you paid minimum tax for any year from 1988 to 1994, and you do not have to pay minimum tax on your 1995 return, you may be able to deduct part or all of that tax from your 1995 taxes payable. To calculate your claim, complete Part VIII of Form T691, Calculation of Minimum Tax. Attach the completed form to your return.

LINE 506 - BASIC FEDERAL TAX (For deemed residents, for non-residents and for non-residents electing under section 217 of the Income Tax Act)

Your basic federal tax is a subtotal you use for certain calculations. For example, the federal individual surtax is a percentage of your basic federal tax.

Overseas employment tax credit - To make your claim, use Form T626, Overseas Employment Tax Credit Calculation. Enter the result of the calculation on line 506. For details, get Interpretation Bulletin IT-497, Overseas Employment Tax Credit, from us.

SURTAX FOR NON-RESIDENTS AND DEEMED RESIDENTS OF CANADA

You pay this tax instead of a provincial or territorial tax.

If you did not have a business with a permanent establishment in Canada, use Schedule 1 to calculate this surtax for non-residents and deemed residents of Canada.

If you had income from a business with a permanent establishment in Canada, you have to pay provincial or territorial tax on that income. Use Form T2203, Calculation of Tax for 1995 - Multiple Jurisdictions, to calculate your provincial or territorial tax (except Quebec). Attach a copy of the form to your return.

LINES 507 AND 508 - FEDERAL FOREIGN TAX CREDIT (For deemed residents and for non residents)

This credit is for foreign income or profits taxes you paid on income you received from outside Canada. Certain tax treaties with other countries may affect whether you are eligible for this credit.

You have to do a separate calculation for each country for which you claim a foreign tax credit, unless the total tax you paid to all foreign countries is $200 or less.

You also have to do a separate calculation for business income taxes and non-business income taxes paid to each foreign country. You can carry unclaimed foreign business income taxes back three years and forward seven years.

In most cases, the foreign tax credit you can claim for each foreign country is the lower of the following two amounts:

• the foreign income tax you actually paid; and
• the tax due to Canada on your net foreign business and non-business income from that country.

Note
If you paid taxes on income from foreign property (other than real property), your foreign tax credit cannot be more than 15% of your net income from that foreign property. However, you can deduct on line 232 the part of the foreign taxes you paid on income from a foreign property that is more than 15%.

For details on how to calculate your claim, get Interpretation Bulletin IT-270, Foreign Tax Credit.

Non-residents - If you were a former resident of Canada who disposed of taxable Canadian property in 1995, you may be able to claim a foreign tax credit. Contact the International Tax Services Office for the special rules that may apply to you.

HOW TO CLAIM

• Complete the federal foreign tax credit area on Schedule 1 and attach the schedule to your return. For a more detailed calculation, complete Form T2209, Calculation of Federal Foreign Tax Credits. Attach it to your return.
• Attach a note showing your calculations. Show all amounts in Canadian dollars. See "How do you report foreign income and other amounts?" on page 7 of this guide.
• Attach proof, such as an official receipt, showing the foreign taxes you paid.
• If you paid taxes to the U.S., attach a copy of your W2 information slip, U.S. 1040 return, and any other supporting documents that apply.
• If you were a member of a partnership and are entitled to claim a part of the foreign taxes the partnership paid, include in your calculation the amount shown in the financial statements or in box 33 of your T5013 slip.

Tax Tip

Your federal foreign tax credit may be less than the tax you paid to a foreign country. If the total of all your foreign tax credits on non-business income is less than the net foreign taxes you paid, you may be able to claim a deduction for the unused amount on line 232.

FEDERAL LOGGING TAX CREDIT

If you paid logging tax to a province for logging operations you performed in the province, you may be able to claim a logging tax credit. For details on how to calculate your credit, contact us.

Since there is no line on the return to claim your tax credit, write in "federal logging tax credit" and your allowable credit below line 30 on Schedule 1. Subtract your allowable credit from the amount on line 30 and enter the result on line 406 of your return (if negative, enter "0").

LINE 511 - ADDITIONAL FEDERAL FOREIGN TAX CREDIT (For deemed residents)

If you claimed a foreign tax credit, you may be able to claim an additional federal foreign tax credit. Use Part II of Form T2209 to calculate this credit. Claim this amount on line 511.

LINE 518 - ADDITIONAL INVESTMENT TAX CREDIT (For deemed residents)

You may also be able to reduce your individual surtax by part of your unused investment tax credit for 1995. See Form T2038(IND.) for details.