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Instructions

1. Open the tax software
2. Review the Background information and Required slips (tax slips, receipts, etc.)
3. Provide all required information for the appropriate sections of the tax software
4. Once completed, compare your results with the solution provided
5. Afterwards, refer to the Takeaway points

Background information

Situation

Rosa lives on a reserve, and she received $6,000 in OAS payments, and $12,500 in Canada Pension Plan (CPP) of which $10,000 is tax exempt. Rosa also received $5,000 in social assistance from the band council for which she has a letter from the band council that explains the social assistance payments.

Identification information

Identification information

Name	Rosa Oakland
Social insurance number (SIN)	000 000 000
Address	123 Main Street City, Province  X0X 0X0
Date of birth	November 22, 1939
Marital status	Single

Required slips

T4A(P) - Statement of Canada Pension Plan Benefits

Text version of the above image

T4 - Statement of Canada Pension Plan Benefits
Protected B
Issued by Service Canada
Oakland Rosa
123 Main Street
City, Province X0X 0X0
Box 20: Taxable CPP benefits: 12,500.00
Box 23: Number of months – retirement: 12
Box 22: Income tax deducted: 0.00
Box 12: Social insurance number: 000 000 000
Box 14: Retirement benefit: 12,500.00

T4A (OAS) – Statement of Old Age Security

Text version of the above image

T4A (OAS) – Statement of Old Age Security
Protected B
Sent by Service Canada
Oakland, Rosa
123 Main Street
City, Province X0X 0X0
Box 18: Taxable pension paid: 6,000.00
Box 19: Gross pension paid: 6,000.00
Box 22: Income tax deducted: 0.00
Box 12: Social insurance number: 000 000 000

Review your results

Solution to reporting tax exempt social assistance payments.

Takeaway points

Steps to follow

1. Review their background information and required slips
2. In Interview setup, tick the boxes next to:
   • Tax return for a Status Indian in the Specific situations section
   • Social assistance, worker’s compensation (T5007/RL-5) in the Employment and other benefits section
   • Pension income, other income and split pension income, COVID-19 benefits (T4A, T4A(OAS), T4A(P), T4A-RCA, T4RSP, T4RIF, T1032) in the Pension section
3. Click Status Indian in the left-side menu and select Yes from the Please confirm that you are a registered Indian, or entitled to be registered as an Indian under the Indian Act drop-down menu
4. Enter $10,000 into the Exempt CPP/QPP benefits field, and $5,000 into the Exempt social assistance payments field
5. Click Social assistance, worker’s compensation in the left-side menu, then click the + sign next to T5007-Worker’s compensation benefits, social assistance, etc. (federal lines 14400, 14500, 14600) to enter $5,000 into field 11
6. Click T4A and pension income in the left-side menu, then click the + sign next to T4A(P) – Statement of Canada or Quebec pension plan benefits to enter $12,500 in field 14, and 12 in field 23
7. Click T4A and pension income in the left-side menu, then click the + sign next to T4A (OAS) – Old age security pension income to enter the information from the T4A(OAS) into the tax software

Rosa’s social assistance payments are tax exempt because she lives on a reserve, has Indian status, and received the payments from a First Nation or band council. They are not reported on line 14500 and there is no deduction on line 25000. The software automatically reports tax-exempt income, under the Indian Act, on form T90.

For more information refer to UFile instructions.