General Income Tax and Benefit Guide - 2017 - Deductions (Net income and Taxable income)

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Step 3 – Net income

Calculation of net income (page 3 of your return)

To determine your net income at line 236, claim any deductions that apply to you.

Line 205 – Pooled registered pension plan (PRPP) employer contributions

Report the total of all amounts shown in the designated "employer contribution amount" box of your PRPP receipts.

Do not report this amount as income, and do not deduct it on your return. We will use it to calculate your RRSP/PRPP deduction limit and to determine the over-contribution tax (if applicable). See line 208.

If you have any questions about your employer's contributions to your PRPP, contact your employer.

Line 206 – Pension adjustment

Report on line 206 the total of all amounts shown in box 52 of your T4 slips or box 034 of your T4A slips. Generally, this total represents the value of the benefits you earned in 2017 under a registered pension plan or a deferred profit-sharing plan.

Do not report the pension adjustment (PA) amount as income, and do not deduct it on your return. Report the amount on line 206. We will use it to calculate your RRSP/PRPP deduction limit for 2018, which we will show on your latest notice of assessment or reassessment, or T1028 statement, Your RRSP/PRPP Information for 2017. You can also view your RRSP/PRPP deduction limit at My Account for Individuals or go to Mobile apps and select MyCRA.

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

Notes

If you lived in Canada and participated in a foreign pension plan in 2017, you may have to report an amount on this line. For more information, contact us.

If you contributed to a foreign employer-sponsored pension plan or to a social security arrangement (other than a United States (U.S.) arrangement), see Form RC269, Employee Contributions to a Foreign Pension Plan or Social Security Arrangement for 2017 – Non-United States Plans or Arrangements.

If you were a U.S. resident working in Canada and contributed to a U.S. employer-sponsored retirement plan, see Form RC267, Employee Contributions to a United States Retirement Plan for 2017 – Temporary Assignments.

If you were a commuter from Canada and contributed to a U.S. retirement plan, see Form RC268, Employee Contributions to a United States Retirement Plan for 2017 – Cross-Border Commuters.

You can get these forms by going to Forms and publications, or by contacting us.

Line 207 – Registered pension plan (RPP) deduction

Generally, you can deduct the total of all amounts shown in box 20 of your T4 slips, in box 032 of your T4A slips, or on your union or RPP receipts. Go to RRSPs and related plans, see Guide T4040, RRSPs and Other Registered Plans for Retirement, or contact us to find out how much you can deduct if any of the following apply:

  • the total is more than $3,500 and your information slips show a past-service amount for service before 1990;
  • you contributed in a previous year and could not deduct part of the contributions; or
  • you made contributions to a pension plan in a foreign country.

Notes

If you contributed to a foreign employer-sponsored pension plan or to a social security arrangement (other than a United States (U.S.) arrangement), see Form RC269, Employee Contributions to a Foreign Pension Plan or Social Security Arrangement for 2017 – Non-United States Plans or Arrangements.

If you were a U.S. resident working in Canada and contributed to a U.S. employer-sponsored retirement plan, see Form RC267, Employee Contributions to a United States Retirement Plan for 2017 – Temporary Assignments.

If you were a commuter from Canada and contributed to a U.S. retirement plan, see Form RC268, Employee Contributions to a United States Retirement Plan for 2017 – Cross-Border Commuters.

You can get these forms by going to Forms and publications or by contacting us.

Supporting documents – If you are filing electronically, keep all your documents in case we ask to see them later. If you are filing a paper return, attach your T4 and T4A slips but do not send your other documents. Keep them in case we ask to see them later.

Line 208 – RRSP/PRPP deduction

This section gives general information about registered retirement savings plans (RRSPs) and pooled registered pension plans (PRPPs). If you need more information after reading this section, go to RRSPs and related plans or see Guide T4040, RRSPs and Other Registered Plans for Retirement.

Specified pension plan (SPP) contributions generally have the same rules as RRSP contributions.

Note

Currently, the Saskatchewan Pension Plan is the only arrangement prescribed to be a specified pension plan. For more information about the Saskatchewan Pension Plan, visit Saskatchewan Pension Plan.

The PRPP is an accessible retirement savings option for individuals, including those who are self-employed. For more information, go to Pooled Registered Pension Plan (PRPP) – information for individuals.

Complete Form RC383, Tax-exempt Earned Income and Contributions for a Pooled Registered Pension Plan, if you would like to contribute to a PRPP based on tax-exempt income you earned as a registered Indian or a person entitled to be registered as an Indian under the Indian Act. The CRA will calculate your exempt PRPP room based on this income. Do not report contributions made from exempt earnings on Schedule 7.

To know your RRSP, PRPP, and SPP information currently on file with the CRA, see your latest notice of assessment or reassessment, or T1028 statement, Your RRSP/PRPP Information for 2017. If you do not have these documents, go to My Account for Individuals or Mobile apps – Canada Revenue Agency and select MyCRA, or use our Tax Information Phone Services.

Maximum contributions you can deduct:

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

  • contributions available to deduct:
    – the unused RRSP/PRPP contributions previously reported and available to deduct for 2017 as shown on your latest notice of assessment or reassessment, or T1028 statement, Your RRSP/PRPP Information for 2017;
    plus
    – the total of the contributions you made from March 2, 2017, to March 1, 2018, to your or your spouse’s or common-law partner’s RRSP and SPP, and your PRPP; minus
    – any contributions you designate as HBP or LLP repayments. See Part B.
  • Adjusted deduction limit:
    – your RRSP/PRPP deduction limit for 2017; minus
    – your employer PRPP contributions from line 205 of your return; plus
    – the amounts you transfer to your RRSP, PRPP, and SPP on or before March 1, 2018. For more information, see Line 14 – Transfers, in Part C.

 

Notes

After the end of the year you turn 71 years of age, you or your spouse or common-law partner cannot contribute to an RRSP, a PRPP, and a SPP under which you are the annuitant (recipient). However, you can still contribute to your spouse's or common-law partner's RRSP and SPP until the end of the year he or she turns 71 years of age, and you can deduct those contributions if you still have an unused RRSP/PRPP deduction limit.

If you contribute more to an RRSP, a PRPP, and a SPP than you can deduct, you may have to pay a tax of 1% per month. To pay this tax you must file a T1-OVP, 2017 Individual Tax Return for RRSP, PRPP and SPP Excess Contributions, for each applicable tax year. For more information, go to RRSPs and related plans or see "Tax on RRSP excess contributions" in Guide T4040, RRSPs and Other Registered Plans for Retirement.

Tax Tip

If you have made deductible RRSP, PRPP, and SPP contributions for 2017 (other than transfers) from March 2, 2017, to March 1, 2018, you do not have to claim the full amount on line 208 of your 2017 return. Depending on your federal and provincial or territorial rates of tax for 2017, and your expected rates of tax for future years, it may be more beneficial for you to claim, if applicable, only part of your contributions. The contributions you do not claim for 2017 will then be available for you to carry forward and claim for future years when your federal and provincial or territorial rates of tax are higher.

Supporting documents – If you are filing electronically, keep all your documents in case we ask to see them later. If you are filing a paper return, attach your completed Schedule 7 (if applicable). Also send your official receipts for all amounts you contributed from March 2, 2017, to March 1, 2018, including those you are not deducting on your return for 2017 and those you are designating as Home Buyers’ Plan (HBP) or Lifelong Learning Plan (LLP) repayments.

If you contributed to your spouse’s or common law partner’s RRSP or SPP, the receipt must show your name as the contributor and your spouse’s or common-law partner’s name as the annuitant (recipient).

How to complete Schedule 7

You may not have to complete Schedule 7. Read the information at the top of the schedule.

Part A – Contributions

Report on line 1 the total of your Unused RRSP/PRPP contributions previously reported and available to deduct for 2017 as shown on your latest notice of assessment or reassessment, or T1028 statement, Your RRSP/PRPP Information for 2017, if applicable.

Report on lines 2 and 3 all contributions made to your or your spouse’s or common-law partner’s RRSP and SPP, and your PRPP, from March 2, 2017 to March 1, 2018, even if you are not deducting or designating them on your return for 2017. Otherwise, we may reduce or disallow your claim for these contributions on your return for a future year.

Do not include the following contributions on lines 2 and 3:

  • any unused RRSP, PRPP, or SPP contributions you made after March 1, 2017, refunded to you or your spouse or common-law partner in 2017. Report the refund on line 129 of your return for 2017. You may be able to claim a deduction on line 232;
  • part or all of the contributions you made to your RRSP or an RRSP for your spouse or common law partner less than 90 days before either of you withdrew funds from that RRSP under the HBP or the LLP. For more information, go to What is the Home Buyers' Plan (HBP)? or see Guide RC4112, Lifelong Learning Plan (LLP);
  • your employer’s contributions to your PRPP (see line 205);
  • any payment directly transferred to your RRSP, PRPP, or SPP if you did not receive an information slip for it or if it is shown in box 35 of your T4RSP or T4RIF slips;
  • the part of an RRSP withdrawal you recontributed to your RRSP and deducted on line 232. This would have happened if, in error, you withdrew more RRSP funds than necessary to obtain past service benefits under a registered pension plan (RPP);
  • the excess part of a direct transfer of a lump-sum payment from your RPP to an RRSP, a PRPP, or a registered retirement income fund (RRIF) you withdrew and are including on line 129 or 130 of your return for 2017 and deducting on line 232; or
  • contributions made from exempt earnings. See Form RC383, Tax-Exempt Earned Income and Contributions for a Pooled Registered Pension Plan.
Part B– Repayments under the HBP and the LLP

If you withdrew funds from your RRSP under the Home Buyer’s Plan (HBP) or the Lifelong Learning Plan (LLP) before 2016, you may have to make a repayment for 2017.

Do not send your repayment to us.

For more information, see Part B of schedule 7, see Guide RC4112, Lifelong Learning Plan (LLP), or go to What is the Home Buyers' Plan (HBP)?.

Part C – RRSP/PRPP deduction

Complete this area to calculate your RRSP/PRPP deduction at line 208. For more information, see Guide T4040, RRSPs and Other Registered Plans for Retirement.

Note

In a previous year, you may have received income for which you could contribute to an RRSP, PRPP, and SPP, but you may not have filed a return for that year. To keep your RRSP/PRPP deduction limit current, you have to file a return for each year.

Remember! RRSP contributions are due on March 1, 2018

Make sure to contribute to your RRSP in time, so you can claim them on this year's return.

For more information, go to RRSPs and related plans

Line 14 – Transfers

You may have reported income on line 115, 129, or 130 of your return for 2017. If you contributed certain types of this income to your own RRSP, PRPP, and SPP on or before March 1, 2018, you can deduct this contribution, called a transfer, in addition to any contribution you make based on your RRSP/PRPP deduction limit for 2017.

For example, if you received a retiring allowance in 2017, report it on line 130 of your return. You can contribute to your RRSP, PRPP, and SPP up to the eligible part of that income (box 66 of your T4 slips or box 47 of your T3 slips) and deduct it as a transfer. Include the amounts you transfer on lines 2 or 3 and 14 of Schedule 7.

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

Part D - Unused contributions available to carry forward

You can carry forward indefinitely any unused part of your RRSP, PRPP, and SPP contributions accumulated after 1990.

Note

If you have unused RRSP, PRPP, or SPP contributions made from January 1, 1991, to March 1, 2017, you should have filed a completed Schedule 7 with the tax returns for those previous years. If you did not, see How to change a return.

Part E – 2017 withdrawals under the HBP and the LLP

Report the total of your Home Buyer’s Plan (HBP) and your Lifelong Learning Plan (LLP) withdrawals for 2017.

Note

You can change the person you designate as the student only on the return for the year you make your first withdrawal under the LLP.

For more information, see Guide RC4112, Lifelong Learning Plan (LLP), or go to What is the Home Buyers' Plan?.

Part F – 2017 contributions to an amateur athlete trust

For more information, see Part F of Schedule 7.

Line 210 – Deduction for elected split-pension amount

If you and your spouse or common-law partner have made a joint election to split your eligible pension income by completing Form T1032, Joint Election to Split Pension Income, you (the transferring spouse or common-law partner) can claim on this line the elected split-pension amount from line G of Form T1032.

Form T1032 must be attached to both your and your spouse’s or common-law partner’s paper returns and filed by your filing due date for the year (see What date is your return for 2017 due?). The information provided on the forms must be the same. If you are filing electronically, keep your election form in case we ask to see it later.

Notes

Only one joint election can be made for a tax year. If both you and your spouse or common-law partner have eligible pension income, decide if you are splitting your pension income or your spouse's or common-law partner's pension income.

Under certain circumstances, we may allow you to make a late or amended election or revoke an original election. For more information, contact us.

Line 212 – Annual union, professional, or like dues

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

  • annual dues for membership in a trade union or an association of public servants;
  • professional board dues required under provincial or territorial law;
  • professional or malpractice liability insurance premiums or professional membership dues required to keep a professional status recognized by law; and
  • parity or advisory committee (or similar body) dues required under provincial or territorial law.

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

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

Tax Tip

You may be eligible for a rebate of any GST/HST you paid as part of your dues. See line 457.

Supporting documents – If you are filing electronically, keep all your documents in case we ask to see them later. If you are filing a paper return, attach your T4 slips but do not send your other documents. Keep them in case we ask to see them later.

Line 213 – Universal child care benefit (UCCB) repayment

The person who reported the UCCB income in the previous year can claim the related 2017 repayment amount on line 213. The UCCB repayment amount is shown in box 12 of the RC62 slip. To view your UCCB information, go to My Account for Individuals.

Line 214 – Child care expenses

You or your spouse or common-law partner may have paid for someone to look after your child so one of you could earn employment or self-employment income, go to school, or conduct research in 2017. The expenses are deductible only if at some time in 2017 the child was under 16 years of age or had an impairment in physical or mental functions. Generally, only the spouse or common-law partner with the lower net income (even if it is zero) can claim these expenses.

For more information and to make your claim, get Form T778, Child Care Expenses Deduction for 2017.

Tax Tips

You may be able to claim payments you made to a boarding school, sports school, or camp. For more information, see Form T778.

If your child needs special attendant care or care in an establishment, see Guide RC4065, Medical Expenses, for more information about different amounts you may be able to claim.

Supporting documents – If you are filing electronically, keep all your documents in case we ask to see them later. If you are filing a paper return, attach your completed Form T778 but do not send your other documents. Keep them in case we ask to see them later.

Line 215 – Disability supports deduction

Claim expenses you paid for personal attendant care and other disability supports expenses allowing you to go to school or earn certain income. This includes income from employment or self-employment and a grant you received for conducting research.

Note

Only the person with the impairment can claim expenses for the disability supports deduction.

For a complete list of allowable expenses, see Guide RC4064, Disability-Related Information. You can claim these expenses on this line only if you or someone else did not claim them as medical expenses on line 330 or 331 of Schedule 1.

To calculate your claim, complete Form T929, Disability Supports Deduction. For more information, see Guide RC4064, Disability– Related Information or use Info-Tax, one of our Tax Information Phone Services.

Supporting documents – Do not send any supporting documents when you file your tax return. Keep them in case we ask to see them later.

Line 217 – Business investment loss

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

If you have a tax shelter, see Tax shelters.

Line 219 – Moving expenses

Generally, you can claim moving expenses you paid in 2017 if both of the following apply:

  • You moved to work or to run a business, or you moved to study courses as a full-time student enrolled in a post-secondary program at a university, a college, or another educational institution.
  • You moved at least 40 kilometres closer to your new workplace or school.

Notes

If you moved before 2017 but could not claim all your expenses on your return for that year or later, you may be able to claim the remaining expenses on your return for 2017.

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

Your deduction is limited to the net eligible income you earned at the new location. Also, you cannot deduct moving expenses against certain non-taxable scholarship, fellowship, bursary, prize, and research grant income. For more information, see Scholarships, fellowships, bursaries, and artists' project grants.

For more information and to calculate how much you can deduct, get Form T1-M, Moving Expenses Deduction, or by calling 1-800-959-8281. If you move, give us your new address as soon as possible. You can change your address by going to My Account for Individuals or Mobile apps and selecting MyCRA or MyBenefits CRA.

Supporting documents – Do not send any supporting documents when you file your tax return. Keep them in case we ask to see them later.

Line 220 – Support payments made

Report on line 230 the total of all deductible and non-deductible support payments for a spouse or common-law partner, or for a child, you made (or, if you are the payee, that you repaid under a court order) in 2017. Claim on line 220 only the deductible amount.

Note

Most child support payments made according to a written agreement or court order dated after April 1997 are not deductible. For more information, see Guide P102, Support Payments.

To avoid your claim being delayed or disallowed, register your written agreement or court order (including any amendments) with us by completing and sending us Form T1158, Registration of Family Support Payments.

Supporting documents – Do not send any supporting documents when you file your tax return. Keep them in case we ask to see them later.

Line 221 – Carrying charges and interest expenses

Claim the following carrying charges and interest you paid to earn income from investments:

  • fees to manage or take care of your investments (other than any fees you paid for services in connection with your pooled registered pension plan, registered retirement income fund, registered retirement savings plan, specified pension plan, and tax-free savings account);
  • fees for certain investment advice (see Interpretation Bulletin IT-238, Fees Paid to Investment Counsel) or for recording investment income;
  • fees to have someone complete your return, but only if you have income from a business or property, accounting is a usual part of the operations of your business or property, and you did not use the amounts claimed to reduce the business or property income you reported (see Interpretation Bulletin IT-99, Legal and Accounting Fees);
  • most interest you pay on money you borrow for investment purposes, but generally only if you use it to try to earn investment income, including interest and dividends. However, if the only earnings your investment can produce are capital gains, you cannot claim the interest you paid. For more information, contact us; and
  • legal fees you incurred relating to support payments that your current or former spouse or common law partner, or the natural parent of your child, will have to pay to you. Legal fees you incurred to try to make child support payments non-taxable must be deducted on line 232. For more information, see Guide P102, Support Payments.

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

  • the interest you paid on money you borrowed to contribute to a registered retirement savings plan, a pooled registered pension plan, a specified pension plan, a registered education savings plan, a registered disability savings plan, or a tax-free savings account (TFSA);
  • safety deposit box charges;
  • the interest part of your student loan repayments (although you may be able to claim a credit on line 319 of Schedule 1 for this amount);
  • subscription fees paid for financial newspapers, magazines, or newsletters;
  • brokerage fees or commissions you paid when you bought or sold securities. Instead, use these costs when you calculate your capital gain or capital loss. For more information, see Guide T4037, Capital Gains, and Interpretation Bulletin IT-238, Fees Paid to Investment Counsel; and
  • legal fees you paid to get a separation or divorce or to establish custody of or visitation arrangements for a child.

Policy loan interest – To claim interest paid during 2017 on a policy loan made to earn income, have your insurer complete Form T2210, Verification of Policy Loan Interest by the Insurer, on or before the date your return is due.

Refund interest – If we paid you interest on an income tax refund, report the interest in the year you receive it at line 121. If we then reassessed your return and you repaid any of the refund interest in 2017, you can claim the amount you repaid, up to the amount you had reported as income.

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

Supporting documents – If you are filing electronically, keep all your documents in case we ask to see them later. If you are filing a paper return, attach your Schedule 4 with Part III completed but do not send your Form T2210 or any other documents. Keep them in case we ask to see them later.

If you have a tax shelter, see Tax shelters.

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

Claim the amount from line 24 of Schedule 8 (line 23 of Schedule 8 for Quebec) or from line 33 of Part 3 or line 32 of Part 4 of Form RC381, Inter-provincial calculation for CPP and QPP contributions and overpayments for 2017 whichever applies.

You can claim contributions you:

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

Note

Do not calculate CPP contributions for earnings identified in box 81 on the T4 slips you received from a placement agency.

Making additional CPP contributions

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

How to calculate your contributions

Complete Schedule 8 or Form RC381, whichever applies, to determine the CPP or QPP payable on your self-employment income or on income for which you can make more contributions.

Because CPP and QPP rates are different, read the following instructions and choose the one that applies to your situation.

If you were a resident of a province other than Quebec on December 31, 2017, and contributed only to the CPP, or if you were a resident of Quebec on December 31, 2017, and contributed only to the QPP, complete Schedule 8 to calculate your CPP or QPP contributions and attach it to your paper return. If you were a member of a partnership, include on Schedule 8 only your share of the net profit. You cannot use self-employment or partnership losses to reduce the CPP or QPP contributions you paid on your employment earnings.

If you contributed to the QPP in 2017 but resided outside Quebec on December 31, 2017, or if you contributed to the CPP in 2017 but resided in Quebec on December 31, 2017, complete Form RC381 to calculate your CPP or QPP contributions and attach it to your paper return. If you were a member of a partnership, include on Form RC381 only your share of the net profit. You cannot use self-employment or partnership losses to reduce the CPP or QPP contributions you paid on your employment earnings.

If you were not a resident of Quebec on December 31, 2017, enter on line 222 and on line 310 of Schedule 1, in dollars and cents, the amount from Schedule 8, or Form RC381, whichever applies. Enter on line 421 of your return the amount from Schedule 8 or Form RC381, whichever applies.

If you were a resident of Quebec on December 31, 2017, enter on line 222 and on line 310 of Schedule 1, in dollars and cents, the amount from Schedule 8 or Form RC381, whichever applies. Line 421 does not apply to you.

Your CPP or QPP contributions must be prorated in certain situations, such as if in 2017:

  • you were a CPP participant and turned 18 or 70 years of age or received a CPP disability pension;
  • you were a QPP participant and turned 18 years of age or received a QPP disability pension;
  • you were a CPP working beneficiary (see line 308) and elected to stop paying CPP contributions or revoked an election made in a previous year; or
  • you are filing a return for a person who died in 2017.
Note

If you started receiving CPP retirement benefits in 2017, your basic exemption may be prorated by the CRA.

Request for refund of CPP contributions

Under the Canada Pension Plan, all requests for a refund of CPP over-contributions must be made within four years after the end of the year for which the request is being made. See line 448.

Line 223 – Deduction for provincial parental insurance plan (PPIP) premiums on self-employment income

If you were a resident of Quebec on December 31, 2017, you have to pay PPIP premiums if one of the following conditions applies:

  • your net self-employment income on lines 135 to 143 of your return is $2,000 or more; or
  • the total of your employment income (including employment income from outside Canada) and your net self-employment income is $2,000 or more.

Complete Schedule 10 to calculate your PPIP premiums and attach it to your paper return. On this line you can claim 43.68% of the total of your PPIP premiums. Claim on this line, in dollars and cents, the amount from line 9 of Schedule 10 and claim the same amount on your provincial income tax return for Quebec, if applicable.

Line 224 – Exploration and development expenses

If you invested in petroleum, natural gas, mining or certain clean energy generation and energy conservation ventures in 2017 but did not participate actively, claim your exploration and development expenses on this line. If you participated actively, follow the instructions for line 135.

How to claim this deduction

Complete Form T1229, Statement of Resource Expenses and Depletion Allowance, using the information the principals of the venture give you, such as T5, T101, or T5013 slips. Read the instructions on the back of these slips.

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

If you have any questions about these expenses, call our business enquiries line at 1-800-959-5525.

If you have a tax shelter, see Tax shelters.

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

Line 229 – Other employment expenses

You can claim certain expenses (including any GST/HST) you paid to earn employment income if the following two conditions apply:

  • Your employment contract required you to pay them.
  • You did not receive an allowance for the expenses or the allowance you received is reported as income.

Note

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

Repayment of salary or wages – You can claim salary or wages you reported as income for 2017 or a previous year if you repaid them in 2017. This includes amounts you repaid for a period when you were entitled to receive wage-loss replacement benefits or workers' compensation benefits. However, you cannot claim more than the income you received when you did not perform the duties of your employment.

Legal fees – You can claim legal fees you paid to collect or establish a right to salary or wages. It is not necessary for you to be successful; however, the amount sought must be for salary or wages owed. You must reduce your claim by any amount awarded to you for those fees or any reimbursement you received for your legal expenses.

You can claim legal fees you paid to collect or establish a right to collect other amounts that must be reported in employment income even if they are not directly paid by your employer.

Employees profit-sharing plan (EPSP) – You may be eligible to claim as a deduction the excess EPSP amount contributed on your behalf to an EPSP. For more information and to calculate your deduction, complete Form RC359, Tax on Excess Employees Profit-Sharing Plan Amounts.

Complete Form T777, Statement of Employment Expenses, to give us details of your deductions and calculations for your expenses (except those related to an EPSP). Guide T4044, Employment Expenses, contains Form T777 and other forms you will need. The guide also explains the conditions that apply when you claim these expenses.

Supporting documents – If you are filing electronically, keep all your documents in case we ask to see them later. If you are filing a paper return, attach your completed Form T777 and/or Form RC359 but do not send your other documents. Keep them in case we ask to see them later.

Tax Tip

You may be eligible for a rebate of any GST/HST you paid as part of your expenses. See line 457.

Line 231 – Clergy residence deduction

If you are a member of the clergy, use this line to claim a deduction for your residence. Your employer has to certify that you qualify for this deduction. Complete Form T1223, Clergy Residence Deduction, to find out what you can claim. For more information, see Information Bulletin IT-141, Clergy Residence Deduction.

Supporting documents – Do not send any supporting documents when you file your tax return. Keep them in case we ask to see them later.

Line 232 – Other deductions

Claim on this line allowable amounts not deducted elsewhere on your return. For clarification of your request, specify the deduction you are claiming in the space to the left of line 232. If you have more than one amount, or to explain your deduction more fully, attach a note to your paper return.

Supporting documents – Do not send any supporting documents when you file your tax return. Keep them in case we ask to see them later.

Note

Children born in 2000 or later can claim a deduction for certain income they report. For more information, see Split income of a child under 18.

If you have a tax shelter, see Tax shelters.

Income amounts repaid

If in 2017 you repaid amounts you received and reported as income (other than salary or wages) for 2017 or a previous year, you can claim most of these amounts on line 232 of your return for 2017. However, if you repaid, under a court order, support payments you reported on line 128, claim the repayment on line 220.

If in 2017 you repaid an amount you received from a registered disability savings plan and reported it as income in 2017 or a previous year, you can claim the amount on line 232. For more information, go to Registered disability savings plan (RDSP), see Information Sheet RC4460, Registered Disability Savings Plan, or contact us.

In 2017, you may have had an amount recovered from your gross old age security (OAS) pension (shown in box 20 of your T4A(OAS) slip) because of an overpayment you received in a previous period. If so, you can claim a deduction on line 232 for the amounts repaid.

Notes

If you had an OAS repayment for 2016, tax may have been withheld from your OAS benefits for 2017. The amount deducted is shown in box 22 of your T4A(OAS) slip for 2017. Do not claim it on line 232. Claim it on line 437. To calculate your 2017 OAS repayment, see line 235 and complete the chart for line 235 on the federal worksheet.

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

Employment insurance (EI) benefits – You may have received more benefits than you should have and already paid them back to the payer of your benefits. For example:

  • The payer of your benefits may have reduced your EI benefits after discovering the mistake. Your T4E slip will show only the net amount you received, so you cannot claim a deduction.
  • If you repaid excess benefits you received directly to the payer of your benefits, box 30 of your T4E slip will show the amount you repaid. Include this amount on line 232. This is not the same as repaying a social benefit as explained under line 235.

Supporting documents – If you are filing electronically, keep all your documents in case we ask to see them later. If you are filing a paper return, attach your documents showing the amounts you repaid.

Legal fees

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

  • You paid fees (including any related accounting fees) for advice or assistance to respond to us when we reviewed your income, deductions, or credits for a year or to object to or appeal an assessment or decision under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan, or the Quebec Pension Plan.
  • You paid fees to collect (or establish a right to) a retiring allowance or pension benefit. However, you can claim only up to the retiring allowance or pension income you received in the year, minus any part of these amounts transferred to a registered retirement savings plan or registered pension plan. You can carry forward, for up to seven years, legal fees you cannot claim in the year.
  • You paid fees to collect (or establish a right to) salary or wages. It is not necessary for you to be successful; however, the amount sought must be for salary or wages owed. You must reduce your claim by any amount awarded to you for those fees or any reimbursement you received for your legal expenses. (These fees must be claimed on line 229.)
  • You can claim legal fees you paid to collect (or establish a right to) other amounts that must be reported in employment income even if they are not directly paid by your employer. (These fees must be claimed on line 229.)
  • You incurred certain fees to try to make child support payments non-taxable. Fees relating to support payments that your current or former spouse or common-law partner, or the natural parent of your child, paid to you must be claimed on line 221. You cannot claim legal fees you incurred to get a separation or divorce or to establish custody of or visitation arrangements for a child. For more information, see Guide P102, Support Payments.

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

For more information about other legal fees you may deduct, see Interpretation Bulletin IT-99, Legal and Accounting Fees.

Other deductible amounts

The following are examples of other amounts you can claim:

Line 235 – Social benefits repayment

Employment insurance (EI) benefits

You have to repay part of the EI benefits (line 119) you received in 2017 if all the following conditions are met:

  • there is an amount shown in box 15 of your T4E slip;
  • the rate shown in box 7 is 30%; and
  • the result of the following calculation is more than $64,125:
    • the amount from line 234; minus
    • the amounts on lines 117 and 125; plus
    • the amounts deducted on line 213 and/or the amount for a repayment of registered disability savings plan income included on line 232.

Complete the chart on your T4E slip to calculate the EI benefits you have to repay. If you also have to repay old age security (OAS) benefits you received, enter the EI benefits you have to repay on lines 7 and 20 of the chart for line 235 on the federal worksheet.

Old age security (OAS) benefits

You may have to repay all or a part of your OAS pension (line 113) or net federal supplements (line 146) if the result of the following calculation is more than $74,788:

  • the amount from line 234; minus
  • the amounts reported on lines 117 and 125; plus
  • the amounts deducted on line 213 and/or the amount for a repayment of registered disability savings plan income included on line 232.

Complete the chart for line 235 on the federal worksheet to calculate your repayment, even if tax was withheld by Service Canada.

Notes

If you had an OAS repayment for 2016, tax may have been withheld from your OAS pension for 2017. The amount deducted is shown in box 22 of your T4A(OAS) slip for 2017. Claim it on line 437. Similarly, if you have an OAS repayment for 2017, tax may be withheld starting with your July 2018 OAS payment.

If your net income exceeded the threshold for 2017 and your net income for 2018 is expected to be substantially lower, you can request a waiver from the CRA to have Service Canada reduce your income tax withheld at source beginning July 2018. The request must be made in writing. Send us a completed Form T1213(OAS), Request to Reduce Old Age Security Recovery Tax at Source.

For more information, contact us.

Line 236 – Net income

We use this amount for calculations such as the Canada child benefit, the GST/HST credit, and other tax credits.

Notes

If it applies, report your spouse's or common-law partner's net income in the "Information about your spouse or common-law partner" area on page 1 of your return. Report this amount even if it is zero.

If the amount you calculate for line 236 is negative, you may have a non-capital loss. To find out, use Form T1A, Request for Loss Carryback. If you have a loss for 2017, you may want to carry it back to your 2014, 2015, or 2016 return. To do this, attach a completed Form T1A to your paper return (or send one to us separately). Do not file an amended return for the year or years to which you apply the loss.

Step 4 – Taxable income

Calculation of taxable income (page 3 of your return)

To determine your taxable income at line 260, claim any deductions that apply to you.

Line 244 – Canadian Forces personnel and police deduction

Claim the total of the amounts shown in box 43 of your T4 slips.

Line 248 – Employee home relocation loan deduction

Claim the total of the amounts shown in box 37 of your T4 slips.

Line 249 – Security options deductions

Claim the total of the amounts shown in boxes 39 and 41 of your T4 slips. In addition, if you disposed of securities for which you had previously deferred the taxable benefit (see Security options benefits), claim 50% of the amount from line 4 of Form T1212, Statement of Deferred Security Options Benefits.

You may be able to claim a deduction for donating securities you acquired through your employer's security options plan. For more information, see "Gifts of securities acquired under a security option plan" in Pamphlet P113, Gifts and Income Tax.

Line 250 – Other payments deduction

Generally, you can deduct 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 reported on lines 144, 145, and 146.

Note

If you reported net federal supplements on line 146, you may not be entitled to claim the whole amount from line 147. Complete the calculation below:

  • the amount from line 234; minus
  • the amounts on lines 117 and 125; plus
  • the amounts deducted on line 213 and/or the amount for a repayment of registered disability savings plan income included on line 232.

If the result is greater than $74,788, contact us to find out how much you can deduct.

Line 251 – Limited partnership losses of other years

If you had limited partnership losses in previous years which you have not already claimed, you may be able to claim part of these losses this year. For more information, contact us.

You can carry forward limited partnership losses indefinitely. You cannot use the amount shown in box 108 of your T5013 slips for 2017 on your return for 2017.

Supporting documents – If you claim these losses, attach to your paper return a statement showing a breakdown of your total losses, the year of each loss, and the amounts claimed in previous years.

Line 252 – Non-capital losses of other years

For 2017, claim the unapplied non-capital losses you reported on your 2006 to 2016 returns you would like to apply.

Also claim any unapplied farming and fishing losses you reported on your 2006 to 2016 returns that you want to apply in 2017. Your available losses are shown on your notice of assessment or notice of reassessment for 2016.

Losses incurred in 2006 and later years can be carried forward for 20 years. 

There are restrictions on the amount of certain farm losses you can claim each year. If you have a farming or fishing business, see Guide T4002, Self-employed Business, Professional, Commission, Farming and Fishing Income, Guide RC4060, Farming Income and the AgriStability and AgriInvest Programs Guide – Joint Forms and Guide, or Guide RC4408, Farming Income and the AgriStability and AgriInvest Programs Harmonized Guide, for more information.

If you need more information about losses, see Interpretation Bulletin IT-232, Losses – Their Deductibility in the Loss Year or in Other Years.

Line 253 – Net capital losses of other years

Within certain limits, you can claim your net capital losses of previous years which you have not already claimed. Your available losses are shown on your notice of assessment or reassessment for 2016. You will probably have to adjust any losses you incurred after 1987 and before 2001. For more information, see Guide T4037, Capital Gains.

Line 254 – Capital gains deduction

You may be able to claim a capital gains deduction for gains realized on the disposition of qualified small business corporation shares, qualified farm or fishing property. For more information, see Guide T4037, Capital Gains.

Line 255 – Northern residents deductions

To make your claim, use Form T2222, Northern Residents Deductions. For more information, see Information Sheet RC4650, Northern Residents Deductions. For a list of the areas that qualify, go to Northern residents.

Supporting documents – If you are filing electronically, keep all your documents in case we ask to see them later. If you are filing a paper return, attach your completed Form T2222 but do not send your other documents. Keep them in case we ask to see them later.

Line 256 – Additional deductions

In the space to the left of line 256, specify the deduction you are claiming. If you have more than one amount, or to explain your deduction more fully, attach a note to your paper return.

Exempt foreign income

If you reported foreign income on your return (such as support payments you received from a resident of another country and reported on line 128) that is tax-free in Canada because of a tax treaty, you can claim a deduction for it. If you do not know if any part of the foreign income is tax-free, contact us.

Under the Canada–United States tax treaty, you can claim on line 256 a deduction equal to 15% of the U.S. Social Security benefits, including U.S. Medicare premiums, which you reported as income on line 115.

If you have been a resident of Canada and have received U.S. Social Security benefits continuously during the period starting before January 1, 1996, and ending in 2017, you can claim a deduction equal to 50% of the U.S. Social Security benefits received in 2017.

This 50% deduction also applies to you if you are receiving benefits related to a deceased person and you meet all the following conditions:

  • The deceased person was your spouse or common-law partner immediately before their death.
  • The deceased person had, continuously during a period starting before 1996 and ending immediately before their death, been a resident of Canada and received benefits to which paragraph 5 of Article XVIII of the Canada–United States tax treaty applied.
  • You have, continuously during a period starting at the person's time of death and ending in 2017, been a resident of Canada and received such benefits.
Vow of perpetual poverty

If you have taken a vow of perpetual poverty as a member of a religious order, you can claim the earned income and pension benefits you have given to the order. For more information, see Interpretation Bulletin IT-86, Vow of Perpetual Poverty.

Supporting documents – Keep all supporting documents in case we ask to see them later.

Adult basic education tuition assistance

Adult basic education (ABE) is primary or secondary level education, or certain other forms of training.

If you reported income assistance to cover all or part of the tuition fees for your ABE, you can claim a deduction for the total of:

Note

If you received taxable tuition assistance for post‑secondary level courses or courses that provide or improve skills in an occupation and the educational institution has been certified by Employment and Social Development Canada as reported in box 20 of the T4E slip or in box 105 of the T4A slip, these amounts cannot be claimed on line 256. Instead, you may be eligible for the tuition amount. See line 323.

Employees of prescribed international organizations

If in 2017 you were employed by a prescribed international organization, such as the United Nations, you can claim a deduction for the net employment income you report from that organization. Net employment income is your employment income minus the related employment expenses you are claiming. If you do not know if your employer is a prescribed international organization, contact your employer.

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