Northern residents
Before you start
The northern residents deductions recognize that individuals living in the prescribed zones are often faced with a higher cost of living, environmental hardships, and limited access to services. These deductions provide relief to those living in a prescribed zone through a residency deduction (for living costs) and a deduction for travel benefits. The deduction is calculated on form T2222 and claimed on line 25500.
To claim northern residents deductions, an individual must have lived permanently, in a prescribed northern zone (Zone A), or in a prescribed intermediate zone (Zone B), for at least six consecutive months, beginning or ending in the tax year for which you are preparing the return.
If the individual has not lived in a prescribed zone for at least six consecutive months at the time of completing their return, they do not yet qualify. You can complete the individual's return without making the claim and, when they qualify, they can ask the CRA to adjust their return.
To determine whether the individual’s residence is in Zone A or Zone B, go to Line 25500 - Northern residents deductions and click Places located in prescribed zones.
The UFile tax software also provides a list of places, by province, that are prescribed as Zone A or Zone B. This can be accessed by searching zone in the ?help function.
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Need to know
The residency deduction is made up of two parts:
- the basic residency amount
- the additional residency amount
The basic residency amount is calculated from details about the individual’s address and how long they lived in prescribed Zone A or Zone B. This can be updated using the start and end dates or by the number of days in the year that they were living in a prescribed zone.
The additional residency amount can be claimed for up to the same number of days that were used to calculate the individual’s basic residency amount if:
- they lived in a dwelling in the prescribed zone during that time; and
- they are the only person claiming the basic residency amount for living in that dwelling for that period.
Note
UFile will not calculate the additional residency amount if you do not enter a number under Number of days to consider for the additional residency amount.
Under proposed changes, individuals can claim a travel deduction for costs related to vacation, family or medical travel that started from a prescribed zone and was taken by themselves or an eligible family member, even if neither received a taxable travel benefit for that trip.
Under proposed changes, an eligible family member is someone who lived with the individual at the time of the trip and was one of the following:
- their spouse or common-law partner,
- their or their spouse or common-law partner's child under the age of 18,
- another individual who is wholly dependent for support on the individual, their spouse or common-law partner, or both, and who is either:
- the individual's or their spouse or common-law partner's parent or grandparent,
- related to the individual and wholly dependent by reason of mental or physical infirmity.
Note
Individuals can claim a deduction for travel benefits even if they are not claiming a residency deduction.
For example, if a spouse or common-law partner claims both the basic and the additional residency amounts, the individual can still claim a travel deduction.
To calculate the travel deduction, the individual can use either the value of the taxable travel benefit received from employment (if any) or, under proposed changes, a portion of the $1,200 standard amount.
The maximum deduction an individual can claim for each eligible trip is the lowest of the following three amounts:
- the value of the taxable travel benefit received from employment (if any) or, under proposed changes, the portion of the individual's or their eligible family member's $1,200 standard amount that is allocated to the trip
- the total travel expenses paid for the trip using either the detailed or simplified calculation methods
- the cost of the lowest return airfare available at the time of the trip, between the airport closest to their residence and the nearest designated city to that airport (even if they did not actually travel by air or to that city)
If an individual uses the standard amount to calculate a travel deduction for themselves or an eligible family member, the maximum total amount that may be claimed for all trips taken in the year by that individual is $1,200, whether the trips were medical or non-medical, and regardless of who (the individual or an eligible family member) is claiming the travel deduction. It is an amount per person, not per trip.
If the individual (for themselves or an eligible family member) uses the taxable travel benefit received from employment to calculate a travel deduction in a year for an individual, then nobody (including the individual) can use any part of that individual's $1,200 standard amount to calculate a travel deduction for a trip taken by that individual.
An individual cannot claim a travel deduction if one of the following applies:
- they or their eligible family member received or was entitled to receive non-taxable amounts as travel assistance, travel allowance, or reimbursement for travel expenses
- someone else has already claimed the deduction for travel benefits for this trip on their return
Under proposed changes, an individual can claim up to two trips that they and each eligible family member took for non-medical personal reasons, and any number of trips that they or an eligible family member took for medical purposes. However, no more than two non-medical personal trips taken by each person (the individual or an eligible family member) can be claimed in total for the year by all taxpayers.
If the individual is claiming a deduction for medical travel on form T2222, no one can claim it as a medical expense on their return.
For detailed information, including meal and vehicle flat rates, as well as the list of nearest designated cities for the lowest airfare, refer to form T2222, Northern residents deductions.
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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
Family Head sub-tab
Interview setup topic is highlighted
Other deductions and credits (including school supply and home buyers’ amount) is highlighted
Other deductions and credits, Interview setup
- Select the Interview setup from the left side menu
- Check the box next to Other deductions and credits (including school supply and home buyers’ amount) from the Other topics section (if it was not already checked by default)
- Click Next
Text version
UFile screen
Under Interview tab
Family Head sub-tab
Other deductions and credits topic is highlighted
Other deductions and credits page
Federal line 25500 – T2222 – Northern residents deduction is highlighted
Other deductions and credits
- Select Other deductions and credits in the left side menu
- In the Other deductions section, click the plus + sign to add the Federal line 25500 – T2222 – Northern residents deduction
- The next screen will prompt you to enter the details about the claim
Text version
UFile screen
Under Interview tab
Family Head sub-tab
Other deductions and credits topic
UFile help – Northern residents deduction is highlighted
Other deductions and credits, UFile help
Note: You can access a list of places located in a prescribed zone by clicking the ? found next to the + sign. A help window will open where you can click the link to access the list.
Text version
UFile screen
Under Interview tab
Family Head sub-tab
T2222 – Northern resident topic is highlighted
Residency deduction – List your places of residence section is highlighted
T2222 – Northern residents deduction, Residency deduction
- Select the area for which the individual is claiming the northern residents deduction, Zone A or Zone B
- Enter the northern residence address for which the individual is making a claim, if different from their current address
- Enter the Full names of other residents at the same address who lived in the individual’s northern residence during the period claimed for the basic residency deduction
- Click on the + sign to the right of Full names of other residents at the same address for each additional person
- Enter the dates the individual resided in the northern area
- Enter the number of days for both the claim of the basic and the additional residency amount
- Scroll down to Deduction for travel benefits
Text version
UFile screen
Under Interview tab
Family Head sub-tab
T2222 – Northern resident topic is highlighted
Deduction for travel benefits section is highlighted
T2222 – Northern residents deduction, Deduction for travel benefits
- Complete the fields under Deduction for travel benefits (Northern area where you travelled, date, purpose, name of the person who travelled, and destination of the trip)
- Scroll down to continue entering the next three sections
Text version
UFile screen
Under Interview tab
Family Head sub-tab
T2222 – Northern resident topic is highlighted
Deduction for travel benefits section is highlighted
Employee benefits with respect to northern travel
Northern travel expenses
- Lowest return air fare for the northern area travel
+ Add Another is highlighted
T2222 – Northern residents deduction, Deduction for travel benefits
- To support a Northern travel expenses claim, enter:
- the taxable benefits received from the employer or, under proposed changes, the portion of the $1,200 standard amount for the person travelling. The choice made here must be the same for all trips for this individual
- the northern travel expenses incurred
- the lowest cost quoted for a flight from the airport closest to the individual's residence to the nearest designated city (even if they did not actually travel by air or to that city)
- For each additional trip,click on the + sign next to Add Another. An additional Details of trips section will open
Note
It is not the volunteer's responsibility to determine whether it is more beneficial for the individual to calculate using benefits received from the employer, or, under proposed changes, the portion of the $1,200 standard amount.
It is the individual's responsibility to get the quote for the lowest return air fare.
Note: UFile will determine the maximum deduction that can be claimed for each eligible trip from the lowest of:
- the taxable benefits received from the employer for the trip or, under proposed changes, the portion of the $1,200 standard amount
- the total of the travel expenses paid for the trip
- the cost of the lowest return airfare available at the time of the trip, between the airport closest to their residence and the nearest designated city
- Click Next
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Example 1: Family head claiming the additional residency amount
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 Pierre Jack Social insurance number (SIN) 000 000 000 Address 123 Main Street
City, Province X0X 0X0
Date of birth May 05, 1988 Marital status Married to:
Bora Jack on August 2, 2018
SIN: 000 000 000
DOB: July 07, 1988
Slips required:
T4 – Statement of Remuneration Paid (Lumber Inc.) – Pierre Jack
T4 – Statement of Remuneration Paid (Lumber Inc.) – Bora Jack
Pierre and Bora are employees of Lumber Inc. in a Zone A – Prescribed Northern Zone. They live in Zone A and are allowed to claim the Northern residents deduction for the full year.
Points to remember:
- Although Pierre and Bora are both entitled to claim the basic residency amount, in this case, they have decided that it is more beneficial for Pierre to claim both the basic residency amount and the additional residency amount since Bora works part-time
- To enter the T2222 information, click Other deductions and credits in the left side menu and click the plus + sign next to Federal line 25500 – T2222 – Northern residents deduction on the Other deductions and credits page
- Select Zone A (Resident of prescribed northern area) to the statement, Area for which you are claiming the Northern residents deduction
- Enter Bora Jack in the field Full names of other residents at the same address
- Enter the Start and end dates of the northern residence under Basic residency amount, beginning (01-01-2021) and Basic residency amount, end (31-12-2021)
- The Number of days to consider for the basic residency amount does not need to be completed since a start and end date were provided
- Enter 365 for the Number of days to consider for the additional residency amount. (Pierre should claim the additional residency amount. Bora should not claim the basic nor the additional residency amounts.)
Information slip for Pierre:
T4 – Statement of Remuneration Paid (Lumber Inc.)
Text version
T4 – Statement of Remuneration Paid
Protected B
Employer’s name: Lumber Inc.
Employee’s name and address:
Last name: Jack
First name: Pierre
123 Main Street
City, Province X0X 0X0
Box 12: Social insurance number: 000 000 000
Box 14: Employment income – line 10100: 43,251.00
Box 16: Employee’s CPP contributions – line 30800: 1,997.75
Box 18: Employee’s EI premiums – line 31200: 625.66
Box 22: Income tax deducted – line 43700: 6,205.00
Box 24: EI insurable earnings: 43,251.00
Box 26: CPP/QPP pensionable earnings: 43,251.00
Information slip for Bora:
T4 – Statement of Remuneration Paid (Lumber Inc.)
Text version
T4 – Statement of Remuneration Paid
Protected B
Employer’s name: Lumber Inc.
Employee’s name and address:
Last name: Jack
First name: Bora
123 Main Street
City, Province X0X 0X0
Box 12: Social insurance number: 000 000 000
Box 14: Employment income – line 10100: 15,000.00
Box 16: Employee’s CPP contributions – line 30800: 555.00
Box 18: Employee’s EI premiums – line 31200: 233.00
Box 22: Income tax deducted – line 43700: 2500.00
Box 24: EI insurable earnings: 15,000.00
Box 26: CPP/QPP pensionable earnings: 15,000.00
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Solution 1: Family head claiming the additional residency deduction
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.
Text version
Pierre Jack
Total income
10100 Employment income: $43,251.00
15000 Total income: $43,251.00
Net income
22215 Deduction for CPP and QPP enhanced contributions: $183.28
23600 Net income: $43,067.72
Taxable income
25500 Northern residents deductions (T2222): $8,030.00
26000 Taxable income: $35,037.72
Non-refundable tax credits
30000 Basic personal amount: $13,808.00
30800 CPP or QPP contributions through employment: $1,814.47
31200 Employment Insurance premiums through employment: $625.66
31260 Canada employment amount: $1,257.00
33500 Total: $17,505.13
33800 Total @ 15%: $2,625.77
35000 Non refundable tax credits: $2,625.77
Refund or balance owing
42900 Basic federal tax: $2,629.89
40500 Federal foreign tax credit (T2209): $0.00
40600 Federal tax: $2,629.89
41700 Line 40600 – 41600: $2,629.89
42000 Net federal tax: $2,629.89
42800 Provincial or territorial tax: $1,396.73
43500 Total payable: $4,026.62
43700 Total income tax deducted: $6,205.00
Payments and credits
48200 Total credits: $6,205.00
48400 Refund: $2,178.38
Bora Jack
Total income
10100 Employment income: $15,000.00
15000 Total income: $15,000.00
Net income
22215 Deduction for CPP and QPP enhanced contributions: $50.92
23600 Net income: $14,949.08
Taxable income
25500 Northern residents deductions (T2222):
26000 Taxable income: $14,949.08
Non refundable tax credits
30000 Basic personal amount: $13,808.00
30800 CPP or QPP contributions through employment: $504.08
31200 Employment Insurance premiums through employment: $233.00
31260 Canada employment amount: $1,257.00
33500 Total: $15,802.08
33800 Total @ 15%: $2,370.31
35000 Non refundable tax credits: $2,370.31
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: $2,500.00
Payments and credits
48200 Total credits: $2,500.00
48400 Refund: $2,500.00
T2222 - Northern Residents Deductions for 2021
Text version
T2222E (21) – Northern Residents Deductions for 2021
Protected B
Step 1 – List your places of residence
Zone A
Address: 123 Main Street, City, X0X 0X0 ON
Period of residence: From: 2021-01-01 To: 2021-12-31
Step 2 – Calculate your residency deduction
Line 1: Basic residency amount: 365 x $11.00 = 4,015.00
Line 2: Additional residency amount: 365 x $11.00 = 4,015.00
Line 3: Line 1 plus line 2 = 8,030.00
Line 5: Line 3 minus line 4 (if negative, enter "0") = 8,030.00
Line 11: Line 5 plus line 10 = 8,030.00
Line 12: Enter your net income from line 23600 of your return: 43,136.84 x 20% = 8,613.54
Line 13: Enter the amount from line 11 or line 12, whichever is less: Residency deduction: 8,030.00
Text version
T2222E (21) – Northern Residents Deductions for 2021
Protected B
Step 3 – Calculate your deduction for travel benefits
If you qualify for this deduction, enter the names and addresses of all individuals who lived in your residence during the period(s) entered in Step 1 for the tax year and complete the following chart to calculate your deduction for the travel benefits.
Name: Bora Jack
Address: 123 Main Street, City ON X0X 0X0
Step 4 – Calculate your northern residents deductions
Line 17: Residency deduction: 8,030.00
Line 19: Line 17 plus line 18: Enter this amount on line 25500 of your return. Northern residents deductions = 8,030.00
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Example 2: A northern resident's deduction claim
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 Paul Matthews Social insurance number (SIN) 000 000 000 Address 123 Main Street
City, Province X0X 0X0
Date of birth August 25, 1997 Marital status Single Slip included:
- T4 – Statement of Remuneration Paid
Paul is an employee of Northern Mining in a Zone A – Prescribed Northern Zone. Each year, he works at the mine for six months, so he is eligible to claim 184 days for the basic residency amount and the additional residency amount. Paul received the following taxable amounts from his employer:
- Board and lodging allowance: $7,200 (box 30 of the T4 slip)
- Travel assistance in a prescribed zone: $1,000 (total taxable travel benefits from box 32 of the T4 slip, minus any amount received for medical travel from box 33 of the T4 slip)
- Medical travel assistance: $1,500 (box 33 of the T4 slip)
Paul has provided us with the lowest quoted cost for each trip’s return airfare (using the designated city list found on form T2222) as well as the actual cost of his travels.
- Quote for the trip for medical travel: $1,500
- Actual cost of the trip for medical travel: $1,780
- Quote for the trip for other reasons: $1,000
- Actual cost of the trip for other reasons: $1,250
For the travel benefits, Paul choses to claim the employer paid benefits instead of the standard amount ($1,200 total for all trips in the year, under proposed changes) as it is more beneficial for him. Individuals can choose either the standard rate for all trips or the employer paid benefits for all trips, but not both.
Points to remember:
- Although Paul is over the recommended income threshold, the organization running the tax clinic for the CVITP has modified the minimum amount to $50,000 due to their local economic environment and the population they serve
- To enter the T2222 information, click Other deductions and credits in the left side menu and click the plus + next to Federal line 25500 – T2222 – Northern residents deduction on the Other deductions and credits page
- Select Zone A (Resident of prescribed northern area) as your response to, Area for which you are claiming the northern residents deduction
- Enter Paul's Northern residence address (if different from current address) as: Box 1000, Northern Village, Ontario X0X 0X0
- Enter the Start and end dates of the northern residence under Basic amount, beginning (01-05-2021) and Basic residency amount, end (31-10-2021)
- The Number of days to consider for the basic residency amount does not need to be completed since a start and end date were provided
- Enter 184 for the Number of days to consider for the additional residency residency amount (Paul can claim the additional residency amount because he lived in a prescribed zone for an eligible period of time and he is the only one from that dwelling claiming the basic residency amount for that same time period)
- Paul had a Deduction for travel benefits.
- Select Zone A (Resident of prescribed northern area) as your response to, Northern area where you travelled
- Select Other as your response to, Purpose of the trip to a northern area
- Enter Paul Matthews in the field Name of the person who travelled to or from the northern destination
- Enter $1,000 in the field for 1 – Employee benefits with respect to northern travel.
- Enter $1,250 in the field for 2 – Northern travel expenses, under Plane. This is the cost of the actual ticket he paid
- Enter $1,000 in the field for 3 – Lowest return air fare for the northern area travel. This is the lowest cost quoted.
- Add an additional trip by clicking + Add Another and enter the following information for the medical trip he took.
- Select Zone A (Resident of prescribed northern area) as your response to, Northern area where you travelled
- Select Medical reasons as your response to, Purpose of the trip to a northern area
- Enter Paul Matthews in the field Name of the person who travelled to or from the northern destination
- Enter $1,500 in the field for 1 – Employee benefits with respect to northern travel
- Enter $1,780 in the field for 2 – Northern travel expenses, under Plane. This is the cost of the actual ticket he paid
- Enter $1,500 in the field for 3 – Lowest return air fare for the northern area travel. This is the lowest cost quoted
Information slip for Paul:
T4 – Statement of Remuneration Paid (Northern Mining)
Text version
T4 – Statement of Remuneration Paid
Protected B
Employer’s name: Northern Mining
Employee’s name and address:
Last name: Matthews
First name: Paul
123 Main Street
City, Province X0X 0X0
Box 12: Social insurance number: 000 000 000
Box 14: Employment income – line 10100: 50,000.00
Box 16: Employee’s CPP contributions – line 30800: 2,300.00
Box 18: Employee’s EI premiums – line 31200: 730.00
Box 22: Income tax deducted – line 43700: 10,000.00
Box 24: EI insurable earnings: 50,000.00
Box 26: CPP/QPP pensionable earnings: 50,000.00
Box 44: Union dues – line 21200: 420.00
Other information:
Box 30: 7,200.00
Box 32: 2,500.00
Box 33: 1,500.00
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Solution 2: A northern resident's deduction claim
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.
Text version
Paul Matthews
Total income
10100 Employment income: $50,000.00
15000 Total income: $50,000.00
Net income
21200 Annual union, professional, or like dues: $420.00
22215 Deduction for CPP and QPP enhanced contributions: $211.01
23600 Net income: $49,368.99
Taxable income
25500 Northern residents deductions (T2222): $6,548.00
26000 Taxable income: $42,820.99
Non refundable tax credits
30000 Basic personal amount: $13,808.00
30800 CPP or QPP contributions through employment: $2,088.99
31200 Employment Insurance premiums through employment: $730.00
31260 Canada employment amount: $1,257.00
33500 Total: $17,883.99
33800 Total @ 15%: $2,682.60
35000 Non refundable tax credits: $2,682.60
Refund or balance owing
42900 Basic federal tax: $3,740.55
40500 Federal foreign tax credit (T2209): $0.00
40600 Federal tax: $3,740.55
41700 Line 40600 – 41600: $3,740.55
42000 Net federal tax: $3,740.55
42800 Provincial or territorial tax: $1,920.66
43500 Total payable: $5,661.21
43700 Total income tax deducted: $10,000.00
Payments and credits
48200 Total credits: $10,000.00
48400 Refund: $4,338.79
T2222 – Northern Residents Deductions for 2021
Text version
T2222E (21) – Northern Residents Deductions for 2021
Protected B
Step 1 – List your places of residence
Zone A
Address: Box 1000 Northern Village X0X 0X0 ON
Period of residence: From: 2021-05-01 To: 2021-10-31
Step 2 – Calculate your residency deduction
Line 1: Basic residency amount: 184 x $11.00 = 2,024.00
Line 2: Additional residency amount: 184 x $11.00 = 2,024.00
Line 3: Line 1 plus line 2 = 4,048.00
Line 5: Line 3 minus line 4 (if negative, enter "0") = 4,048.00
Line 11: Line 5 plus line 10 = 4,048.00
Line 12: Enter your net income from line 23600 of your return: 49,368.99 x 20% = 9,873.80
Line 13: Residency deduction: Enter the amount from line 11 or line 12, whichever is less: 4,048.00
Text version
T2222E (21) – Northern Residents Deductions for 2021
Protected B
Step 3 – Calculate your deduction for travel benefits
Other travel (Trip 1 and Trip 2): 1; Paul Matthews; Other travel; 1,000.00; 1,250.00; 1,000.00; 1,000.00
Medical travel: 1; Paul Matthews; Medical travel; 1,500.00; 1,780.00; 1,500.00; 1,500.00
Total: 2,500.00 (A)
Line 14: Enter the total from box (A): 2,500.00
Line 16: Deduction for travel benefits: 2,500.00
Step 4 – Calculate your northern residents deductions
Line 17: Residency deduction: 4,048.00
Line 18: Deduction for travel benefits: 2,500.00
Line 19: Line 17 plus line 18: Enter this amount on line 25500 of your return. Northern residents deductions = 6,548.00
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