Archives: FAQs

Can I claim the transit pass costs incurred by my family members?

You can only claim the public transit amount for yourself, spouse or common-law partner, and your or your partner’s children who are below the age of nineteen. Ensure that you keep all passes as proof for your claim. According to the Canada Revenue Agency, the passes must contain all the following data: Name of the … Continue reading Can I claim the transit pass costs incurred by my family members?

What options do I have, for tax purposes, for inducement payments I receive on leaseholds?

There are two options available: first, you can reduce the un-depreciated capital cost (UCC) of the leaseholds by the amount of the inducement. For example, if the leasehold is $50,000, and you received an inducement payment of $10,000, you can choose to include the leaseholds at a UCC of $40,000. On the other hand, you … Continue reading What options do I have, for tax purposes, for inducement payments I receive on leaseholds?

Do I have to pay tax on the Universal Child Care Credit (UCCB) payments I receive?

Yes, you must report this income on your personal income tax return and pay income tax. Should you fail to do so, the Canada Revenue Agency will adjust your tax return based on on the Universal Child Care Credit (UCCB) payments that you received in the year. Failure to report will likely result in interest … Continue reading Do I have to pay tax on the Universal Child Care Credit (UCCB) payments I receive?

I have a rental property and for few months of this year, there were no tenants. Can I still claim rental expenses for those months on my tax return?

You can still claim rental expenses for those months as long as you were actively seeking for new tenants and the space was available for rent during the period.    

As a small business owner planning on doing my own personal taxes, which tax software would you recommend?

Each individual’s tax needs are unique but the following tax preparation software will be able to effectively service the needs of most individuals: TurboTax This is a user-friendly Canadian tax software that makes preparing your taxes easy. It walks you through the tax preparation and filing process by asking easy-to-understand questions. Further, it offers tax … Continue reading As a small business owner planning on doing my own personal taxes, which tax software would you recommend?

What happens if I filed an NR6 that was approved by the CRA but I did not file the section 216 return by the deadline of June 30th?

By way of background, the Section 216 Tax Return reports the net rental profits (i.e. revenues – expenses) earned on an Canadian rental property, which is owned by a Non-resident of Canada. The NR6 Form is a waiver that reduces the withholding tax rate of 25% on gross rents received by the landlord to only … Continue reading What happens if I filed an NR6 that was approved by the CRA but I did not file the section 216 return by the deadline of June 30th?

I have been assigned to a temporary assignment (few years) by my employer to work in a foreign country. Will this affect my Old Age Security eligibility?

Normally, your Old Age Security eligibility will depend on the number of years you physically lived in Canada after the age of 18. This means that your OAS eligibility will very much be affected by your temporary assignment. However, Canada has a Social Security Totalization Agreement with various countries around the world which states that … Continue reading I have been assigned to a temporary assignment (few years) by my employer to work in a foreign country. Will this affect my Old Age Security eligibility?

I’m starting a new business and have come across something called a “shelf corporation”. What is a shelf corporation?

A ‘shelf corporation’ is an incorporated entity that either: Never carried on a business and never owned any assets; Carried on a business and owned assets in the past, but is now inactive without any assets. Shelf corporations that carried on a business in the past for a number of years, and have a good … Continue reading I’m starting a new business and have come across something called a “shelf corporation”. What is a shelf corporation?

What types of tax credits are available to Canadian university students?

Canadian university students are able to claim several lucrative tax credits: The first tax credit that a student can claim is for tuition fees. In order to claim this credit the student must be taking courses costing $100 or more in a recognized educational institution. The second tax credit is the education amount. You are … Continue reading What types of tax credits are available to Canadian university students?

Can I receive a tax credit or deduction for fees paid to a private high school for my children?

Typically, parents are unable to claim a tuition credit or tax deduction for fees paid to a private high school. However, there are special circumstances where parents can claim tax credits for a portion of the fees paid to a private high school in respect of their children as indicated below: Parents can claim a … Continue reading Can I receive a tax credit or deduction for fees paid to a private high school for my children?

What is the longest fiscal year that a corporation can have?

The maximum fiscal period can be 53 weeks or 371 days.  

In addition to reporting my income, what other information would be useful to share with the CRA?

To avoid headaches in the future by way of reduced or withheld tax refunds, and extensive paperwork thereafter, you should inform the CRA if the following events happen (among others), with appropriate supporting documentation. Date of marital status change, either when you marry or, undergo a separation/divorce. Spousal and child support payments, as per court … Continue reading In addition to reporting my income, what other information would be useful to share with the CRA?

I am a non-resident of Canada and I’d like to draw funds from my RRSP. What is the most tax efficient method?

Should you make a lump sum withdrawal from your RRSP as a non-resident, you are required to pay a flat 25% withholding tax to the CRA on the amount, which you will most likely never recover. A more tax efficient method would be to first turn your RRSP into an annuity such as RRIF. Depending … Continue reading I am a non-resident of Canada and I’d like to draw funds from my RRSP. What is the most tax efficient method?

What are the tax implications for support payments received from a former spouse?

Child support payments made under a court order or written agreement after April 1997 are generally not taxable and hence do not have to be included in income by the recipient. It is also not deductible by the payer.In contrast, spousal support payments made under a court order or written agreement are usually taxable to … Continue reading What are the tax implications for support payments received from a former spouse?

If GST was not collected on taxable products/services at the time of sale, what options do suppliers/purchasers have?

Section 224 of the Excise Tax Act authorizes suppliers to initiate legal action against a recipient for the recovery of unpaid tax if they account for the tax payable and disclose the tax payable (on the invoice) for the supply. In the event that the original invoice does not indicate the purchase is tax-extra (tax … Continue reading If GST was not collected on taxable products/services at the time of sale, what options do suppliers/purchasers have?
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