Couple with social assistance payments and one of them has employment income
Test your knowledge
Question 1
That's correct
In the federal tax return, the individual with the higher net income must report all of the social assistance payments they and their spouse or common-law partner received if they are living together. The tax software will automatically report the social assistance payments on the tax return.
Sorry, that's incorrect
In the federal tax return, the individual with the higher net income must report all of the social assistance payments they and their spouse or common-law partner received if they are living together. The tax software will automatically report the social assistance payments on the tax return.
Question 2
That's correct
In the Quebec income tax return, social assistance benefits are taxable.
Sorry, that's incorrect
In the Quebec income tax return, social assistance benefits are taxable.
Instructions
- Open the UFile CVITP software
- Review the background information and slips required (tax slips, receipts, etc.). Enter all the necessary information into the required sections of the tax software
- Once completed, compare your results with the solution provided
- You don't have the same results? Consult the Reminder of key points of the tax software as needed
- Check out the Takeaway points at the end
| Categories | Datas |
|---|---|
| Family head | Nathan Lebrun |
| Social insurance number (SIN) | 000 000 000 |
| Address | 123 rue Principale City QC X0X 0X0 |
| Telephone number | 450-444-4444 |
| Date of birth (DOB) | September 21, 1997 |
| Marital status | Married: Sophia Tremblay since June 7, 2019 SIN: 000 000 000 DOB: May 16, 1997 |
| Dependant | Émily Lebrun (daughter) DOB: February 1, 2016 |
Details
- Nathan and Sophia each received $6,132 in social assistance benefits over a 12-month period
- Sophia also worked occasionally during the year and earned $759.23 in employment income
- They both signed the lease to their apartment
- Nathan will be claiming the solidarity tax credit for both of them
- They paid Sophia's mother to look after Émily while they looked for work, Sophia's mother issued a RL-24 slip for it
Slips required
T5007 – Statement of Benefits for Nathan
Text version for the above image
T5007 – Statement of Benefits
Protected B
Box 11: Social assistance payments or provincial or territorial supplements: 6,132.00
Box 12: Social insurance number: 000 000 000
Recipient's name and address:
Last name: Lebrun
First name: Nathan
123 Principale
City QC X0X 0X0
Payer's name and address: Ministère du Travail, de l'Emploi et de la Solidarité sociale
RL-5 – Prestations et indemnités (Benefits and indemnities) for Nathan
Text version for the above image
Relevé 5 Prestations et indemnités
Code du relevé: R
Box A- Prestations d'assistance sociale: 6,132.00
Nom de famille, prénom et adresse du bénéficiaire des prestations ou des indemnités:
Lebrun, Nathan
123 Principale
City QC X0X 0X0
Numéro d'assurance sociale du bénéficiaire: 000 000 000
Nom et adresse de l'organisme: Ministère du Travail, de l'Emploi et de la Solidarité sociale
RL-31 – Renseignements sur l'occupation d'un logement (Information about a leased dwelling) for Nathan
Text version for the above image
Relevé 31 Renseignements sur l'occupation d'un logement
Code du relevé: R
Box A- Numéro de logement: 76C1B - 32670 - 2B178
Box B- Nombre de locataires ou de sous-locataires qui ont conclu le bail du logement visé à la case C: 02
Box C- Adresse du logement:
Box C2- Numéro: 123
Box C3- Rue: Principale
Box C4- Ville, village ou municipalité: City
Box C5- Code postal: X0X 0X0
Nom de famille, prénom et adresse du locataire ou du sous-locataire:
Lebrun, Nathan
123 Principale
City QC X0X 0X0
Nom et adresse du propriétaire: Legault, David
T5007 – Statement of Benefits for Sophia
Text version for the above image
T5007 – Statement of Benefits
Protected B
Box 11: Social assistance payments or provincial or territorial supplements: 6,132.00
Box 12: Social insurance number: 000 000 000
Recipient's name and address:
Last name: Tremblay
First name: Sophia
123 Principale
City QC X0X 0X0
Payer's name and address: Ministère du Travail, de l'Emploi et de la Solidarité sociale
RL-5 – Prestations et indemnités (Benefits and indemnities) for Sophia
Text version for the above image
Relevé 5 Prestations et indemnités
Code du relevé: R
Box A- Prestations d'assistance sociale: 6,132.00
Nom de famille, prénom et adresse du bénéficiaire des prestations ou des indemnités:
Tremblay, Sophia
123 Principale
City QC X0X 0X0
Numéro d'assurance sociale du bénéficiaire: 000 000 000
Nom et adresse de l'organisme: Ministère du Travail, de l'Emploi et de la Solidarité sociale
RL-31 – Renseignements sur l'occupation d'un logement (Information about a leased dwelling) for Sophia
Text version for the above image
Relevé 31 Renseignements sur l'occupation d'un logement
Code du relevé: R
Box A- Numéro de logement: 76C1B - 32670 - 2B178
Box B- Nombre de locataires ou de sous-locataires qui ont conclu le bail du logement visé à la case C: 02
Box C- Adresse du logement
Box C2- Numéro: 123
Box C3- Rue: Principale
Box C4- Ville, village ou municipalité: City
Box C5- Code postal: X0X 0X0
Nom de famille, prénom et adresse du locataire ou du sous-locataire:
Tremblay, Sophia
123 Principale
City QC X0X 0X0
Nom et adresse du propriétaire: Legault, David
T4 – Statement of Remuneration Paid – Le Papier gratuit for Sophia
Text version for the above image
T4 – Statement of Remuneration Paid
Protected B
Employer's name: Le Papier gratuit
Employee's name and address:
Last name: Tremblay
First name: Sophia
123 Principale
City QC X0X 0X0
Box 10: Province of employment: QC
Box 12: Social insurance number: 000 000 000
Box 14: Employment income: 759.23
Box 45: Employer-offered dental benefits: 1
RL-1 – Revenus d'emploi et revenus divers (Employment and other income) for Sophia
Text version for the above image
Relevé 1 Revenu d'emploi et revenus divers
Code du relevé: R
Box A- Revenus d'emploi: 759.23
Box G- Salaire admissible au RRQ: 759.23
Numéro d'assurance sociale du particulier: 000 000 000
Nom de famille, prénom et adresse du particulier:
Tremblay, Sophia
123 rue Principale
Ville QC X0X 0X0
Nom et adresse de l'employeur ou du payeur: Le Papier gratuit
RL-24 – Frais de garde d'enfants (Child care expenses) for Sophia
Text version for the above image
Relevé 24 Frais de garde d'enfants
Code du relevé: R
Nom de chacun des enfants:
Nom de famille: Lebrun
Prénom: Émily
Box A: Date de naissance: 2016 02 01
Box B.1: Nombre de jours de garde: 1
Box C: Total des frais payés: 200.00
Box E: Frais donnant droit au crédit d'impôt: 200.00
Box G: Numéro d'assurance sociale de la personne qui a payé les frais de garde: 000 000 000
Nom de famille, prénom et adresse de la personne qui a payé les frais de garde:
Tremblay, Sophia
123 Principale
City QC X0X 0X0
Nom et adresse du fournisseur des services de garde:
Tremblay, Marthe
123 Principale
City QC X0X 0X0
Solutions
Reminder of key points of the tax software
Note:
To access complete instructions on the various steps of entering data into the tax software, click on the title of each section below.
-
Nathan's interview
Social assistance – T5007/RL-5
- Click Interview setup in the left-side menu
- In the Employment and other benefits section, tick the box next to Social assistance, worker's compensation (T5007/RL-5)
- Click Social assistance, worker’s compensation in the left-side menu
- In the Workers' compensation benefits section, click the + sign next to RL-5/T5007 – Workers' compensation benefits, social assistance, etc.
- Enter the information into the corresponding fields
- Select Yes for the question Did you live with your spouse or common-law partner when you received the social assistance benefits?
- Select Family head for the Select the person whose name appears on the slip field
Additional steps to consider
Ensure you have:
- answered the questions related to the Quebec prescription drug insurance plan premium
- answered the questions related to the Quebec solidarity tax credit
-
Sophia's interview
- Click add spouse, to the right of the name Nathan Lebrun, at the top of the screen
- Enter Sophia's identification information into the Spouse Identification page, including the province of residence
Social assistance – T5007/RL-5
- Repeat the same steps you did for Nathan
- Select Yes for the question Did you live with your spouse or common-law partner when you received the social assistance benefits?
- Select Spouse of family head for the Select the person whose name appears on the slip field
Employment income – T4 and RL-1
- Click T4 and employment income in the left-side menu
- Click the + sign next to T4 and RL-1 (Relevé 1) income earned in Quebec with QPP contributions
- Enter the amounts from Sophia's T4 and RL-1 slips into the corresponding fields
Additional steps to consider
Ensure you have:
- answered the questions related to Quebec prescription drug insurance plan premium
-
Émily's interview
- Click add dependant, to the right of the name Sophia Tremblay, at the top of the screen
- Enter the identification information for Sophia and Nathan's child, note that the relationship between them must be indicated
- Select Let MaxBack decide for the question Who should claim this dependant on the Quebec return?
- Click Child care in the left-side menu
- Click the + sign next to Babysitter
- On the Child care expenses – Babysitter page, enter $200 into the Amount paid to the babysitter for this child for federal tax purposes field and into the Child care expenses paid for this child for Quebec tax purposes (RL-24 or receipt) box E field
- Enter the babysitter's name and address into the corresponding fields
Takeaway points
- For the federal tax return, social assistance benefits are not taxable, they must be reported as income on the tax return but are subsequently deducted
- Since Sophia's net income is higher than Nathan's, the total amount of social assistance benefits was reported on her federal tax return even though Nathan received his own T5007 slip
- For the Quebec income tax return, social assistance payments are taxable and each member of the couple declares their benefits in their own tax return
Deduction for child care expenses and Tax credit for childcare expenses
- In the federal tax return, the spouse with the lower net income can claim the deduction for child care expenses
- Nathan is not entitled to the deduction because his earned income is $0
- The tax credit for childcare expenses is a refundable tax credit that can be claimed in either parent’s Quebec income tax return
Canada employment amount and Deduction for workers
- Sophia is entitled to the Canada employment amount (federal tax credit) and to the deduction for workers (provincial tax credit)
- Individuals who received social assistance benefits all year are exempt from paying the Quebec prescription drug insurance plan premium
Canada workers benefit and Work premium
- Sophia is not entitled to the Canada workers benefit (federal tax credit) or the work premium (provincial tax credit) because her work income is not high enough