Social assistance payments issued by a band council
Test your knowledge
Question 1
Sorry, that's incorrect.
Not all income is tax exempt under the Indian Act, regardless of where the individual lives or works. For example, the Old Age Security benefits and the Guaranteed Income Supplement are not tax exempt under the Indian Act.
That's correct.
Not all income is tax exempt under the Indian Act, regardless of where the individual lives or works. For example, the Old Age Security benefits and the Guaranteed Income Supplement are not tax exempt under the Indian Act.
Question 2
Sorry, that's incorrect.
A First Nations member can claim a deduction only for income situated on a reserve or premises. The amount they can claim cannot exceed their total income from all sources situated on a reserve or premises, minus any deductions.
That’s correct.
A First Nations member can claim a deduction only for income situated on a reserve or premises. The amount they can claim cannot exceed their total income from all sources situated on a reserve or premises, minus any deductions.
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 section 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.
| Category | Information |
|---|---|
| Family head | Rose Oakland |
| Social insurance number | 000 000 000 |
| Address | 123 rue Principale City QC X0X 0X0 |
| Telephone number | 450-444-4444 |
| Date of birth | November 22, 1969 |
| Marital status | Single |
Details
- Rose has Indian Status and lives on a reserve.
- She received $6,696 in social assistance payments from her band council for which she has a letter that explains the payments received.
- She owns her home and received an RL-31 slip from the band council.
Slips Required
RL-31 – Renseignements sur l'occupation d'un logement (Information about a leased dwelling)
Text version for the above image
RL-31 Renseignements sur l'occupation d'un logement
Code du relevé: R
Box A- Numéro de logement: 00000-00000-00000
Box B- Nombre de locataires ou de sous-locataires qui ont conclu le bail du logement visé à la case C: 01
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:
Oakland, Rose
123 Principale
City QC X0X 0X0
Solution
Reminder of key points of the tax software
Note:
To access complete instructions on the various steps of entering data into the software, click on the title of each section below.
Rose’s interview
- Click Revenu Québec questions in the left-side menu
- Select Yes for the question Are you eligible for the Quebec amount for a person living alone?
- Select Yes for the question Do you wish to apply for the Quebec solidarity tax credit?
Quebec prescription drug insurance plan
- Click Quebec prescription drug insurance plan in the left-side menu
- Select 4 – Exceptions, Québec prescription drug insurance plan, all year for the statement Specify the situation that applied to you in 20XX for the purpose of the Quebec prescription drug insurance:
- Select Registered Indian [code 24] for the statement Specify the exception(s) that applied to you in 20XX:
- Click Solidarity tax credit in the left-side menu
- Complete the A. Information about you section based on Rose’s situation:
- select Yes for the question Throughout the year 20XX, did you live in a dwelling, either alone or only with one or more people under 18?
- select Yes for the question Is the address of your principal residence on December 31, 20XX the same as the one in your tax return?
- select No for the question Is your principal residence located in a northern village?
- select Tenant or subtenant (RL-31) for the question Were you or your spouse tenants (received a RL-31) or owners on December 31, 20XX?, even if Rose was the owner
- Select Your name for the statement Please select to whom the RL-31 was issued, and fill out the fields as follows:
- enter 00000-00000-0000 into Dwelling number box A
- enter 1 into Total number of tenants or subtenants box B
- In section B. Information about your spouse:
- select No for the question Did you have a spouse on December 31, 20XX?
Tax return for a Status Indian
- Click Interview setup in the left-side menu
- In the Specific situations section, tick the box next to:
- No income to report in 20XX
- Tax return for a Status Indian
- Click Next
- Click Status Indian in the left-side menu
- Select Yes for the statement Please confirm that you are a registered Indian, or entitled to be registered as an Indian under the Indian Act.
- Enter 6696 into the Exempt social assistance payments field
Social assistance payments issued from a band council
- 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
- Click the + sign next to RL-5/T5007 – Workers’ compensation benefits, social assistance, etc.
- Enter 6696 into the RL-5 box A – Social assistance benefits: box 11 field
Takeaway points
Tax return for a Status Indian
- You must indicate in the software that the individual is a Status Indian, otherwise their income will not be tax exempt
- If an individual only has tax-exempt income, in the Interview setup, you need to tick the box next to No income to report in 20XX
- if not, an error message will prevent the transmission of the provincial tax return by NetFile Québec
Social assistance payments issued from a band council
- The social assistance payments Rose received are tax exempt on the federal tax return and are not taxed on the Quebec income tax return because she:
- lives on a reserve
- has Indian Status
- received the payments from her band council
- In the federal tax return, these payments are not reported on lines 14500 and 25000 because they are tax exempt
- the tax software automatically reported the payments on the form T90
- On the Quebec income tax return, these payments are reported on line 147
- since these payments were received from the band council, they were deducted from Rose’s income on line 293
Amount for a person living alone
- Rose can claim the amount for a person living alone on her Quebec income tax return because she lived alone the entire year
Solidarity tax credit
- Rose is eligible for the housing and QST components of the solidarity tax credit
- Rose’s RL-31 slip is entered as that of a tenant because she received the RL-31 slip from her band council
Quebec prescription drug insurance plan premium
- As status Indians, Rose is exempt from paying the premium under the Québec prescription drug insurance plan