Incarcerated individuals
Before you start
As a CVITP volunteer, you may assist incarcerated individuals, individuals who were previously incarcerated, or their spouses/common-law partners with completing their income tax and benefits returns.
Before you begin preparing a return, always ask if the individual has a spouse, common-law partner, or any dependants.
If an individual does not have some, or all, of their information slips, you may be able to complete their return(s) using Auto-fill my return (AFR). For more information, refer to Auto-fill my return.
If the individual has a spouse or common-law partner, you must indicate whether you are completing a separate tax return for the spouse or common-law partner or only reporting their net income on the individual’s return.
If the individual has dependants, it is also important to add each dependant in UFile. Not including this information could affect the calculation of the family’s benefits and credits. For more information, refer to Families.
When preparing a return for an incarcerated individual, it is important to be aware that their eligibility for certain benefits and credits may be affected by the period of incarceration. For more information on the eligibility of benefits and credits, please see Tax credits and benefits for individuals.
-
Need to know
An individual’s marital status does not change as a result of being incarcerated. They are still considered married or living common-law if they are separated involuntarily due to a period of incarceration, not because of a breakdown in the relationship. To receive or to continue receiving certain benefits and credits, individuals must keep their information up to date and file their income tax returns each year. An incorrect marital status or an unfiled return can have a significant impact on the calculations and entitlements of certain payments.
For more marital status information and definitions, see Income tax basic concepts.
What to consider when filing an income and benefits return for an incarcerated individual
Returns to be filed every year by each individual
If an individual is married or in a common-law relationship, both individuals must file their own income tax and benefits returns.
For example, if an individual is receiving the Canada child benefit, that individual and their incarcerated spouse or common-law partner must each file their taxes on time every year, even if they had no income to report. If either the individual or their spouse/common-law partner fails to file a tax return, it could result in their benefits being cut off.
Benefits and credits
The goods and services tax/harmonized sales tax (GST/HST) credit is a non-taxable amount paid four times a year (July, October, January, and April) to individuals and families to help offset all or part of the GST/HST that they pay on everyday goods and services.
An incarcerated individual becomes ineligible to receive GST/HST credit when they have been confined to a prison or similar institution for a period of 90 consecutive days or more. As such, a family member cannot receive the credit for a spouse, common-law partner, or child who has become ineligible.
Generally, an individual will become ineligible the quarter following the date of incarceration. They become eligible the quarter following their release date.
For example, an individual whose first day of incarceration is April 1 would be eligible to receive the April quarterly payment, but not the July quarterly payment. If they are released on July 1, they would not receive the July quarterly payment but would be eligible to receive payments as of the October quarterly payment.
The Canada workers benefit (CWB) is a refundable tax credit that supplements the earnings of low-income workers. An individual’s eligibility to claim the CWB can also be affected by a period of incarceration.
An individual is not eligible to claim the CWB if they were confined to a prison or similar institution for a period of at least 90 days in the year. Similarly, they are also not considered to be an eligible spouse for the purpose of the calculation. However, their spouse or common-law partner may still be eligible to claim the CWB as a single individual or parent.
For more information on the eligibility criteria for the specific credits being claimed, refer to the Income Tax and Benefit Guide.
Child care expenses (special cases)
Child care expenses are amounts an individual paid to have someone look after an eligible child. Generally, when an individual is either married or in a common-law relationship, the child care expenses are claimed by the spouse with the lower net income.
However, when the lower net income spouse was confined to a prison or similar institution for a period of at least two weeks during the year in which the expenses were incurred, the child care expenses can be claimed by the higher net income spouse or in part by both individuals. This type of situation falls under child care – special cases.
For more information on child care expenses (special cases), please refer to Families.
-
Screen-by-screen instructions
Disclaimer
This training uses screenshots taken from prior versions of the UFile CVITP software. Consequently, the images may differ slightly from the current version of UFile CVITP. The content is accurate and generally, the only difference will be the tax year being referenced. Should the current year’s software contain any significant changes, a new screenshot will be published as soon as possible.
Text version
UFile screen
Under Interview tab
Lower Income sub-tab
Interview setup topic is highlighted
Prison in 2021 is highlighted
How to identify if the individual was incarcerated
In the Interview setup, check the box next to Prison in 2021 from the Specific situations section
Click Next
Text version
UFile screen
Under Interview tab
Lower Income sub-tab
Prison in 2019 page
Indicate if you were in prison for 90 days or more in 2019 is highlighted
Prison in 2021
On the Prison in 2021 screen, select the situation that applies to the question Indicate if you were in prison for 90 days or more in 2021
Note: UFile will automatically determine the individual’s eligibility for the CWB and/or the GST/HST credit based on the situation selected.
-
Example: Incarcerated individual (Long-term incarceration and Incarcerated individual with a spouse)
Instructions: Practice entering information into the mock profile
Open the UFile CVITP software and use the background information, slips required (tax slips, receipts, etc.), and points to remember sections provided in the example to enter all the necessary information. Once completed, compare your results with the solution provided.
Disclaimer
Examples have been created using fictional names. Any resemblance to persons real, imaginary, or deceased is purely coincidental. There is no intention for examples to depict stereotyping on any basis.
Background information Name Jason Simpson Social insurance number (SIN) 000 000 000 Address 123 Main Street
City, Province X0X 0X0
Date of birth April 22, 1977 Marital status Single Slips included:
- T4 – Statement of Remuneration Paid (Hardware Inc.)
- T4 – Statement of Remuneration Paid (Hardwire Inc.)
Situation 1: Long-term incarceration
Jason has been incarcerated since September 1, 2021 and will be released on April 30, 2023. Jason has no income and therefore has no tax slips. He is filing his return to keep his information up to date with the Canada Revenue Agency.
Points to remember:
Even though the UFile software may show an estimate of Jason’s GST/HST credit entitlement, Jason will not receive the credit as he would be in prison for 90 consecutive days at the beginning of the month in which the GST/HST credit quarterly payments are issued.
Slips required:
None.
Situation 2: Incarcerated individual with a spouse
Jason was incarcerated on June 4, 2021 and will be released earliest in January 2026. Jason needs to file his return for Jennifer to continue receiving her GST/HST credit and Canada workers benefit (CWB).
Background information Marital status Married to: Jennifer Simpson
DOB: May 22, 1977
Points to remember:
Although we are only transmitting the return for Jason, we are still required to provide complete information for Jennifer when completing his tax return.
- Jason will not be eligible for the CWB, as he was in prison for more than 90 days during the year. However, Jennifer is still entitled to her CWB credit
- Jennifer is still entitled to receive GST/HST credit for herself. However, she cannot receive any entitlements on behalf of her incarcerated spouse
Slips required:
T4 – Statement of Remuneration Paid (Hardware Inc.)
T4 – Statement of Remuneration Paid (Hardwire Inc.)
Information slip for Jason:
T4 – Statement of Remuneration Paid (Hardware Inc.)
Text version
T4 – Statement of Remuneration Paid
Protected B
Employer’s name: Hardware Inc.
Employee’s name and address:
Last name: Simpson
First name: Jason
123 Main Street
City, Province X0X 0X0
Box 12: Social insurance number: 000 000 000
Box 14: Employment income – line 10100: 12,500.00
Box 16: Employee’s CPP contributions – line 30800: 400.00
Box 18: Employee’s EI premiums – line 31200: 185.00
Box 22: Income tax deducted – line 43700: 1,250.00
Box 24: EI insurable earnings: 12,500.00
Box 26: CPP/QPP pensionable earnings: 12,500.00
Information slip for Jennifer:
T4 – Statement of Remuneration Paid (Hardwire Inc.)
Text version
T4 – Statement of Remuneration Paid
Protected B
Employer’s name: Hardwire Inc.
Employee’s name and address:
Last name: Simpson
First name: Jennifer
123 Main Street
City, Province X0X 0X0
Box 12: Social insurance number: 000 000 000
Box 14: Employment income – line 10100: 22,500.00
Box 16: Employee’s CPP contributions – line 30800: 600.00
Box 18: Employee’s EI premiums – line 31200: 350.00
Box 22: Income tax deducted – line 43700: 2,250.00
Box 24: EI insurable earnings: 22,500.00
Box 26: CPP/QPP pensionable earnings: 22,500.00
-
Solution: Incarcerated individual (Long-term incarceration and Incarcerated individual with a spouse)
Instructions
This solution was calculated using the 2021 version of UFile CVITP, with Ontario as the province of residence. To validate your results, refer to the federal totals generated on lines 15000, 23600, 26000, and 42000. Calculations may vary depending on the province/territory selected in the Identification section. To view your results, click the Federal summary link found under the Review tab when you have completed the example.
Solution for situation 1: Long-term incarceration
Text version
Situation 1: Long-term incarceration
Jason Simpson
Total income
15000 Total income: $0.00
Net income
23600 Net income: $0.00
Taxable income
26000 Taxable income: $0.00
Non refundable tax credits
30000 Basic personal amount: $13,808.00
33500 Total: $13,808.00
33800 Total @ 15%: $2,071.20
35000 Non refundable tax credits: $2,071.20
Refund or balance owing
42900 Basic federal tax: $0.00
40500 Federal foreign tax credit (T2209): $0.00
40600 Federal tax: $0.00
42000 Net federal tax: $0.00
42800 Provincial or territorial tax: $0.00
43500 Total payable: $0.00
Payments and credits
48200 Total credits: $0.00
Solution for situation 2: Incarcerated individual with a spouse
Text version
Situation 2: Incarcerated individual with a spouse
Jason Simpson
Total income
10100 Employment income: $12,500.00
15000 Total income: $12,500.00
Net income
22215 Deduction for CPP and QPP enhanced contributions: $36.70
23600 Net income: $12,463.30
Taxable income
26000 Taxable income: $12,463.30
Non refundable tax credits
30000 Basic personal amount:$13,808.00
30300 Spouse or common-law partner amount:
30800 CPP or QPP contributions through employment: $363.30
31200 Employment Insurance premiums through employment: $185.00
31260 Canada employment amount: $1,257.00$
33500 Total: $15,613.30
33800 Total @ 15%: $2,342.00
35000 Non refundable tax credits: $2,342.00
Refund or balance owing
42900 Basic federal tax: $0.00
40500 Federal foreign tax credit (T2209): $0.00
40600 Federal tax: $0.00
41700 Line 40600 – 41600:
42000 Net federal tax: $0.00
42800 Provincial or territorial tax: $0.00
43500 Total payable: $0.00
43700 Total income tax deducted: $1,250.00
Payments and credits
45300 Canada workers benefit (CWB) (Schedule 6):
48200 Total credits: $1,250.00
48400 Refund: $1,250.00
Jennifer Simpson
Total income
10100 Employment income: $22,500.00
15000 Total income: $22,500.00
Net income
22215 Deduction for CPP and QPP enhanced contributions: $55.05
23600 Net income: $22,444.95
Taxable income
26000 Taxable income: $22,444.95
Non refundable tax credits
30000 Basic personal amount: $13,808.00
30300 Spouse or common-law partner amount: $1,344.70
30800 CPP or QPP contributions through employment: $544.95
31200 Employment Insurance premiums through employment: $350.00
31260 Canada employment amount: $1,257.00
33500 Total: $17,304.65
33800 Total @ 15%: $2,595.70
35000 Non refundable tax credits: $2,595.70
Refund or balance owing
42900 Basic federal tax: $771.04
40500 Federal foreign tax credit (T2209): $0.00
40600 Federal tax: $771.04
41700 Line 40600 – 41600: $771.04
42000 Net federal tax: $771.04
42800 Provincial or territorial tax: $146.70
43500 Total payable: $917.74
43700 Total income tax deducted: $2,250.00
Payments and credits
45300 Canada workers benefit (CWB) (Schedule 6): $1,395.00
48200 Total credits: $3,645.00
48400 Refund: $2,727.26
Report a problem or mistake on this page
- Date modified: