Federal Income Tax and Benefit Guide – 2021
Completing your return (Step 5)
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- Step 5 – Federal tax
- Part A – Federal tax on taxable income
- Part B – Federal non-refundable tax credits
- Newcomers to Canada and emigrants
- Amounts for non-resident dependants
- Line 30800 – Base CPP or QPP contributions through employment income
- Line 31000 – Base CPP or QPP contributions on self-employment income and other earnings
- Line 31200 – Employment insurance premiums through employment
- Line 31205 – Provincial parental insurance plan (PPIP) premiums paid
- Line 31350 – Digital news subscription expenses
- Line 32400 – Tuition amount transferred from a child or grandchild
- Line 33099 – Medical expenses for self, spouse or common-law partner, and your dependent children born in 2004 or later
Complete the appropriate column of the chart using the amount from line 26000 of your return.
These credits reduce the federal tax you have to pay. If the total of these credits is more than the federal tax you have to pay, you will not get a refund for the difference.
If you became or ceased to be a resident of Canada for tax purposes during 2021, you may have to reduce your claim for the amounts on lines 30000, 30100, 30300, 30400, 30425, 30450, 30500, 31800, 32400, and 32600, and in some cases, line 31600 of your return. For more information, see Pamphlet T4055, Newcomers to Canada, or go to Individuals – Leaving or entering Canada and non-residents.
You may be able to claim an amount for certain dependants who live outside Canada if they depended on you for support.
If the dependants already have enough income or assistance for a reasonable standard of living in the country where they live, the CRA does not consider them to be dependent upon you for support.
Gifts are not considered support.
Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) rates for base contributions are different.
If you contributed to:
- CPP only, complete Schedule 8 to calculate your CPP contributions
- QPP (or the QPP and CPP), complete Form RC381, Inter-provincial Calculation for CPP and QPP Contributions and Overpayments
If you contributed to:
- QPP only, complete Schedule 8 to calculate your QPP contributions
- CPP (or the CPP and QPP), complete Form RC381, Inter-provincial Calculation for CPP and QPP Contributions and Overpayments
If you are 60 to 70 years of age, employed or self-employed, and receiving a CPP or QPP retirement pension, you must make contributions to the CPP or the QPP. However, if you are at least 65 years of age but under 70 years of age, you can elect to stop contributing to the CPP or revoke a prior-year election.
For more information, see Form CPT30, Election to Stop Contributing to the Canada Pension Plan or Revocation of a Prior Election, and Schedule 8 or Form RC381, whichever applies.
You may not have contributed to the CPP for certain income that you earned through employment or you may have contributed less than required. This can happen if:
- You had more than one employer in 2021
- You had income, such as tips, that your employer did not have to withhold contributions from
- You were in a type of employment not covered under CPP rules, such as casual employment
Generally, if the total of your CPP, QPP, or both contributions through employment, from boxes 16 and 17 of your T4 slips, is less than $3,166.45, you can contribute 10.9% on any part of the income you have not already made contributions.
The maximum pensionable earnings under the CPP for 2021 is $61,600.
Form CPT20, Election to Pay Canada Pension Plan Contributions, lists the eligible employment income that you can make additional CPP contributions on. To calculate and make additional CPP contributions for 2021, complete Form CPT20 and Schedule 8 or Form RC381, whichever applies.
Tax-exempt employment income earned by a person registered or entitled to be registered under the Indian Act
If you are registered or entitled to be registered under the Indian Act and have tax- exempt employment income, and there is no amount in boxes 16 or 17 of your T4 slips, you may be able to contribute to the CPP on this income. For more information, go to Employer source deductions.
If you contributed to the CPP only:
- Do not claim more than $2,875.95 on line 30800 of your return for your base contributions on employment income
- Do not claim more than $290.50 on line 22215 of your return for your enhanced contributions
- Claim any overpayment on line 44800 of your return
If you made contributions to the QPP (or the QPP and CPP), complete Form RC381 to calculate your overpayment, if any.
If you contributed to the QPP only:
- Do not claim more than $3,137.40 on line 30800 of your return for your base contributions on employment income
- Do not claim more than $290.50 on line 22215 of your return for your enhanced contributions
- Claim any overpayment on your Revenu Québec Income Tax Return
If you made contributions to the CPP (or the CPP and QPP), complete Form RC381 to calculate your overpayment, if any.
Even if you contributed less than the maximums noted above, you may have an overpayment if your claim was prorated in 2021 for any of the following reasons:
- You were a CPP participant who turned 18 or 70 years of age, or received a CPP disability pension
- You were a QPP participant who turned 18 years of age, or received a QPP disability pension
- You were a CPP working beneficiary who elected to stop paying CPP contributions or revoked an election made in a previous year
- You are filing a return for a person who died in 2021
If you started receiving CPP retirement benefits in 2021, your basic exemption may be prorated by the CRA.
If you contributed to a foreign employer-sponsored pension plan or to a social security arrangement (other than a United States Arrangement), see Form RC269, Employee Contributions to a Foreign Pension Plan or Social Security Arrangement – Non-United States Plans or Arrangements.
Under the Canada Pension Plan, you must ask for a refund of your CPP over-contributions no later than four years from the end of the year the overpayment occured in.
Claim, in dollars and cents, the total base Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) contributions calculated on your self-employment income and other earnings. For more information, see line 22200.
Claim the total of the amounts you contributed to employment insurance (EI) from box 18, and a provincial parental insurance plan (PPIP) from box 55, if applicable, of all of your T4 slips.
If you worked only in Quebec during the year, claim the total of the amounts from box 18 of all your T4 slips.
If you worked outside Quebec and your employment income was $2,000 or more, complete Schedule 10.
This is the total of all earnings you pay EI premiums on. These amounts are shown in box 24 of your T4 slips (or box 14 if box 24 is blank).
If your total insurable earnings are $2,000 or less, do not enter any premiums on line 31200 of your return. Instead, enter the total on line 45000 of your return.
You may have an overpayment of your premiums even if you contributed the maximum amount or an amount that is less than what is required for the year.
The CRA will calculate the overpayment for you. If you want to calculate your overpayment, complete Form T2204, Employee Overpayment of Employment Insurance Premiums, or complete Schedule 10 if you were a resident of Quebec who worked outside Quebec.
If you repaid some of the EI benefits that you received, do not claim the repayment on line 31200. You may be able to claim a deduction on line 23200 of your return for the benefits you repaid.
If you contributed more than $889.54, claim the overpayment on line 45000 of your return.
If you contributed more than $664.34, claim the overpayment on line 45000 of your return. However, if you completed Schedule 10, enter the amount from line 23 on line 45000 of your return. The overpayment on line 45000 is reduced by the PPIP premiums that you have to pay (line 31210 of your return). The part of the overpayment used will be transferred directly to Revenu Québec.
The CRA will refund the unused overpayment to you or use it to reduce your balance owing. If the difference is $1 or less, you may not receive a refund.
Under the Employment Insurance Act, you must ask for a refund of your EI overpayment no later than three years from the end of the year the overpayment occurred in.
If you were a resident of Quebec on December 31, 2021, who worked in Quebec during the year, claim, in dollars and cents, the total of the amounts from box 55 of your T4 slips.
Claim any overpayment on your Revenu Québec Income Tax Return.
If your PPIP insurable earnings are less than $2,000, do not claim any PPIP premiums on line 31205. Instead, claim this amount as an overpayment on your Revenu Québec Income Tax Return.
You can claim up to $500 for amounts you paid in 2021 for qualifying subscription expenses.
A qualifying subscription expense is the amount a subscriber paid in the year for a digital news subscription with a qualified Canadian journalism organization (QCJO) that does not hold a licence to carry on a broadcasting undertaking. To qualify, a digital news subscription must give access to digital content that is primarily written news.
Only the individuals who entered into the agreement for the subscription can claim the expenses. If you and another person can claim the same qualifying subscription expenses, you can split the claim for that digital news subscription expenses. However, the total amount of your claim and the other person’s claim cannot be more than the maximum amount allowed for this credit.
A digital news subscription may also give you access to non-digital content or content that comes from a partner organization of the QCJO that is not a QCJO. Only the cost of a comparable stand-alone digital subscription to the content of the QCJO will be eligible. If there is no comparable stand-alone digital subscription, only half of the amount paid is eligible.
You may be able to claim the transfer of all or part of the unused 2021 tuition amount from your child or grandchild, or their spouse or common-law partner.
The maximum amount each student can transfer to you is $5,000 minus the amount that they used to reduce their own tax payable.
The student has to complete the “Transfer or carryforward of unused amount” section of their Schedule 11 to transfer an amount to you. The student must also designate and transfer the amount to you using any of the following applicable forms:
- Form T2202, Tuition and Enrolment Certificate
- Form TL11A, Tuition and Enrolment Certificate – University Outside Canada
- Form TL11C, Tuition and Enrolment Certificate – Commuter to the United States
If the amount being transferred to you is not shown on any of these forms, you should get a copy of the student’s official tuition fee receipt and keep it in case you are asked to provide it later.
The student must enter this amount on line 32700 of their federal Schedule 11. They may choose to transfer an amount that is less than the federal unused tuition amount available to transfer.
Only one person can claim this transfer from a student; however, it does not have to be the same parent or grandparent who claims an amount on line 30400 or line 30450 of their return for the student.
You can claim eligible medical expenses paid in any 12-month period ending in 2021 and not claimed for 2020. Generally, you can claim all amounts paid that are more than a certain threshold, even if they were not paid in Canada. Medical expenses for other dependants must be claimed on line 33199 of your return.
On the return for a person who died in 2021, a claim can be made for expenses paid on behalf of the deceased in any 24-month period that includes the date of death if they were not claimed for any other year. This also applies if you are claiming expenses paid for a dependant who died in the year.
You can claim, on line 33099 of your return, the total eligible medical expenses that you or your spouse or common-law partner paid for each of the following persons:
- your spouse or common-law partner
- your or your spouse’s or common-law partner’s children under 18 years of age at the end of the year
The most common eligible medical expenses are:
- payments to a medical doctor, dentist, nurse, or certain other medical professionals or to a public or licensed private hospital
- payments for prescription drugs, artificial limbs, wheelchairs, crutches, hearing aids, prescription eyeglasses or contact lenses, dentures, pacemakers, and certain prescription medical devices
- premiums paid to private health services plans (other than those paid by an employer, such as the amount from box J of your Quebec Relevé 1 slip)
- premiums paid under a provincial or territorial prescription drug plan, such as the Quebec Prescription Drug Insurance Plan and the Nova Scotia Seniors’ Pharmacare Program (amounts or premiums paid to provincial or territorial government medical or hospitalization plans are not eligible)
- certain cannabis products purchased for a patient for medical purposes
- certain expenses incurred for an animal specially trained to assist a patient in coping with any of the following impairments:
- profound deafness
- severe autism
- severe diabetes
- severe epilepsy
- a severe and prolonged impairment that markedly restricts the use of the patient’s arms or legs
- a severe mental impairment, if the animal is specially trained to do specific tasks (excluding the provision of emotional support)
These expenses include such things as the cost of the animal, care and maintenance of the animal (including food and veterinary care), reasonable travel expenses for the patient to attend a facility that trains individuals in the handling of these service animals, and reasonable board and lodging for full-time attendance at the facility. The special training of the animal has to be one of the main purposes of the person or organization that provides the animal.
For more information about medical expenses you can claim, including reimbursement and travel expenses, go to lines 33099 and 33199 – Eligible medical expenses you can claim on your tax return or use the CRA’s Tax Information Phone Services. You can also see Guide RC4065, Medical Expenses, and Income Tax Folio S1-F1-C1, Medical Expense Tax Credit.
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