Why File?			Are you a student?
	Homeowners			Employed vs self-employed
	Canada Child Tax Credit			Non-Residents/International
	Some tips for seniors			Fairness and Appeals
	People with disabilities			General Filing Information
	It pays to invest			Community Volunteer Tax Program
	Deductions / Tax credits & student deductions

Why file?

• Receive a refund
• Apply for the GST credit
• Apply for or continue to receive the Child Tax Benefit
• Support an application for or a renewal of the Guaranteed Income Supplement or OAS Allowance

While these are the most common claims, there are several other advantages such as carrying forward non-capital losses and unused portions of tuition or education amounts or protecting your RRSP deduction limit.

If you have any questions about the tax filing process, or your tax return, please feel free to contact either the CRA.

The extensive CRA website contains answers to many frequently asked questions and has resources you can download.

These specific CRA numbers may be helpful:

Individual income tax inquiries 1-800-959-8281
Income tax refund inquiries 1-800-959-1956
Canada Child Tax Benefit 1-800-387-1193
GST credit 1-800-959-1953
Forms and publications 1-800-959-2221
Payment arrangements 1-888-863-8657

Avoid enforcement action
If you have failed to file your income tax, you can contact CRA through the Voluntary Disclosure Program at one of the following numbers: 905 389--7697, 905-570-7334 or 905 572-4633.

Homeowners

Interested in buying your first home or already own one?

If you are looking for better value from your investment, the Government of Canada has a series of special programs and credits which provide incentives and assistance.

First Time Home Buyers' Plan
You can withdraw up to $20,000 from your RRSP for yourself as a first time buyer or for a disabled relative. This plan may apply if you own a rental property or if you have not owned a home for a long period of time.

GST Housing Rebate
New construction or renovation. If you build a new home, you may qualify for a GST rebate on all or part of the labour and material costs. If you substantially renovate your home, you may qualify for a GST rebate on all or part of the materials and labour costs.

Working at Home
If you are self-employed or a professional, you may be able to deduct expenses for the business use of a work space in your home.

Selling Your Home
If the property you are selling was not your principal place of residence at any time during the period you owned it, you may have to pay tax on part or all of the capital gain.

For more information about any of the above credits and incentives, please contact the CRA at 1-800-267-6999 or www.cra-arc.gc.ca

Provincial Credit (Ontario)
Information on the Ontario Property Tax Credit and the Ontario Homeownership Savings Plan Tax Credit is available by contacting your provincial representative, or visiting the Ontario Ministry of Finance website.

Canada Child Tax Credit

The Canada Child Tax Benefit (CCTB) is a federal-provincial/territorial program designed to help Canadian families raise their children. In order to qualify, the child must live with you and you must be a resident of Canada. The amount of the benefit is based upon the net income declared on your income tax return and that of your spouse or common law partner.

To be considered for the CCTB, you must complete a Child Tax Benefit Application (Form RC66) as soon as possible after the child's birth and ensure that your income tax return is filed on time.

Filing on time will provide the information CRA needs to calculate the initial amount of the benefit and will ensure subsequent renewals of the CCTB. The amount of the benefit is re-calculated each year from July 1st to June 30th of the following year.

The CCTB provides a tax-free monthly payment to help families raise children under 18 years of age. It may include the National Child Benefit Supplement (NCBS) and the Child Disability Benefit (CDB) depending upon your and your child's circumstances.

The NCBS is an additional monthly benefit for low income families. The CDB is a monthly benefit providing financial assistance for qualified families caring for children with severe and prolonged mental or physical disabilities. A child also qualifies for the disability amount when the Disability Tax Credit Certificate (Form 2201) has been approved for that child. The amount of the CDB is based on your family's net income.

If there is a change in your marital status while you are in receipt of any of these benefits, you must complete the Marital Status Change form (RC65) on line at www.cra-arc.gc.ca If your marital status changes, your benefit is recalculated based on the number of children you have and their ages as well as the net family income.

To obtain more information on the Child Tax Benefit, you can refer to the publication Your Canada Child Tax Benefit (T4114) on line at www.cra-arc.gc.ca

Some tips for seniors

If you are over 65 years of age and have a limited income, you may be eligible to participate in the Community Volunteer Income Tax Program. Single persons whose income is less than $20,000 and couples whose combined income is less than $30,000 can access this program.

• Filing your income tax return allows you to apply for the GST rebate by completing the GST/HST credit application section of your income tax return.
• Filing on time will provide CRA the information it needs to calculate the amount of Guaranteed Income Supplement (GIS) you may be eligible for and will ensure that subsequent renewals of the GIS are not delayed. The amount of the GIS is recalculated yearly for the period from July 1st to June 30th.
• You could be eligible for deductions or credits available to people with disabilities as outlined in section "Some Tips for Seniors". The CRA publication Information Concerning People With Disabilities 2004 (RC4064) is very helpful.

Some people choose to have income tax deducted at source from their Old Age Security pension and their Canada Pension Plan benefits. Your local Member of Parliament or tax advisor could help you to make these arrangements.

You may have to pay your income tax in quarterly installments if there is not enough income tax withheld at source. Income such as pensions, interest, investments, rent and self-employment are examples. In most cases, installments are due on March 15, June 15, September 15 and December 15. For more information, you can consult the publication Paying Your Income Tax by Installments (P110)

By the end of the year that you turn 69, you must start receiving pension benefits from your Registered Pension Plan (RPP) and you must convert your Registered Retirement Savings Plan (RRSP) so that you are provided with a retirement income. You may convert your RRSP by either cashing it in and paying tax on the money that you receive that year, buying an annuity that is payable over a number of years, or establishing a Registered Retirement Income Fund (RRIF). For more information, please consult the publication RRSP's and Other Registered Plan for Retirement (T4040)

People with disabilities

In order to support people facing the increased costs of living with disabilities, the Income Tax Act provides several deductions. Full details are available in the publication Information Concerning People With Disabilities 2004 (RC4064).

Disability supports deduction:
If you have a mental or physical impairment and have incurred costs for services or devices in order to be able to work, go to school or do research, you may be able to deduct some of these expenses. Some expenses must be certified by a medical practitioner.

Eligible dependant:
You may be able to claim an amount for a dependant if you were single, separated, divorced or widowed at any time in 2004 and supported a dependant who was not your spouse and lived with you in a house that you maintained.

Infirm dependant 18 years or older:
You may be able to claim an amount if you or your spouse or common law partner have a dependent child or grandchild who is mentally or physically infirm and was born in 1986 or earlier. This may apply to other dependants who are not your children or grandchildren.

Caregiver amount:
You may be able to claim an amount if you or your spouse have a child, grandchild, brother, sister, niece, nephew, parent or grandparent who was either physically or mentally infirm, was a dependant of yours at any time during 2004 and meets certain conditions.

Other deductions:
Child care expenses, tuition, education and medical expenses are other deductions that people with disabilities can apply for as well.

Medical expense tax credit:
The medical expense tax credit is available for individuals who have incurred significant medical expenses for themselves or certain of their dependants. For more information, please consult the General Income Tax and Benefit Guide 2004 (5000-G-NCP)

Disability tax credit:
If you have a severe and prolonged disability, you should file a Disability Tax Credit Certificate (Form T2201). This form can be completed at any time during the year and must certified by a physician. CRA will review your application and advise you in writing whether or not you can claim a disability amount on your income tax return. As mentioned above, this form is also used for purposes of the Child Disability Benefit.

This non-refundable tax credit reduces the amount of income tax one has to pay. A supplement for persons who are under 18 at the end of the calendar year is included in this amount. All or part of the disability tax credit may be transferred to your spouse or common-law partner, or another supporting person.

Attendant care expense deduction:
The attendant care expense deduction is available to individuals who are entitled to the disability tax credit and have had expenses for personal care that are necessary to allow them to work.

It pays to invest

Registered Education Savings Plan (RESP)
To help families cope with the increased costs of post-secondary education, the federal government established generous tax incentives and grants for RESP's.

An RESP is an education plan registered with CRA. Parents and grand parents can help save money for their children's education; contributions earn tax-free interest and grants are provided.

There are various plans including:

• The family plan that can have more than one beneficiary who must be related to the contributor by blood or adoption
• That can only have one beneficiary who need not be related and
• The group plan that usually pertains to foundations and other non taxable entities.

For more information, you can consult the publication Registered Education Savings Plan (RC4092).

Registered Retirement Pension Plan (RRSP)
An RRSP is a pension plan registered with CRA. It allows you to set aside money tax-free for your retirement years. The interest that you earn from your RRSP is not taxable as long as the income remains in the plan. Tax is payable when you cash in or receive payments from your plan. The deadline for contributing to your RRSP for the 2005 taxation year is March 1, 2006.

If you are a first-time home buyer or you are buying a home for a disabled relative, you may be able to withdraw up to $20,000 from your RRSP tax-free provided you repay the amount within a 15-year period. There are other eligibility possibilities that you can refer to by consulting the publication Home Buyers' Plan (RC4135)

The Lifelong Learning Plan (LLP) allows you to withdraw funds for training or education for yourself, your spouse or your common-law partner. You can withdraw up to $20,000 from your RRSP tax-free ($10,000 annual limit). To obtain more information on conditions to qualify for the LLP, consult Lifelong Learning Plan (LLP) (RC96)

For information regarding retirement, consult the publication RRSPs and Other Registered Plans for Retirement 2004 (T4040). It can be downloaded from the website www.cra-arc.gc.ca

Deductions / Tax credits and student deductions

Donations and gifts:
If you made a charitable donation to an eligible registered charity for the Tsunami Relief Effort between January 1, 2005 and January 11, 2005, it can be claimed on your 2004 tax return. Charities provide important enhancement to our quality of life. You can claim a tax credit for a donation to a registered Canadian charity or to any other recognized recipient. For more information, visit www.cra-arc.gc.ca and view Charitable Donations and Gifts (T2SCH2

Dues to unions or professional associations:
You can claim dues paid to a trade union, an association of public servants, certain professional boards and other recognized associations.

Support payments:
Support payments are monies that an individual is required to pay to a recipient for the maintenance of that recipient, children of that recipient or both. The payments should be part of an agreement or order that is registered with CRA. Support payments for a former spouse or common-law partner are taxable for the recipient and deductible for the individual who is making the payments. Since April 1997, support payments for a child are not taxable or deductible. In the case of support payments that combine both, other circumstances have to be taken into consideration.

Employment expenses:
Canadians are able to deduct expenses incurred in order to earn income as an employee when they are required to pay those expenses and do not receive an allowance to do so or have received an allowance that was included in their income. For more information on allowable expenses, please refer to Employment Expenses 2004 (T4044)

Moving expenses:
You may be able to deduct moving expenses from your employment or self-employment income at your new place of residence if the move has taken place for employment purposes or to conduct a business. Students may also deduct certain moving expenses.

Are you a student?

Education and tuition amounts:
Including these amounts help students pay less income tax. Students can claim certain eligible tuition fees paid for courses. These amounts may be carried forward to other years to offset income earned. You can claim either a full-time or a part-time education amount in your income tax return if you are enrolled in a program at a designated educational institution (university, college, private academy).

Scholarships, fellowships, bursaries, study grants and artists' project grants:
Scholarships, bursaries and grants are declared as income, a portion of which will be exempted. In order to calculate the amount of the exemption you are entitled to, please refer to the publication on students and income tax.

GST Credit:
Students may be eligible for a GST credit to offset the costs of the GST that they pay. It is necessary to apply even if you have received the GST rebate in a previous year. GST rebate cheques are payable in July, October and January and April.

Interest paid on your student loan:
If you are re-paying a loan available through government legislation, i.e. Canada Students Loan, that pertains to post-secondary education, you can claim the interest that you or a person related to you paid on that loan. If you wish, you can carry these amounts forward up to five years instead of claiming them for the year during which they were paid.

Employed vs self-employed

For the employer, the implications are serious: CPP and El premiums can be assessed for a period of 2 years and other tax issues such as GST are reviewed. For individuals who are working for this employer, their income tax would have to be re-assessed.

Generally, CRA auditors use some of the following criteria to evaluate whether someone is an employee or self-employed.

Employee:
The employee agrees to work for the employer part-time or full-time for a period of time or indefinitely and is paid a wage. The employer determines the way the work is done, assigns specific tasks and has the right to do so. The employer supplies the tools to do the work and decides on the time and place of work. In some cases, employees supply their own tools.

Self-employed:
One party agrees to perform specific work for another party without supervision. There is no commitment for number of hours or company benefits. The party performing the work does so from her own house or office using her own equipment, covering the costs related to its use. The latter may perform services to more than one company at a time. There is no guarantee of a steady income and there could be either a profit or loss.

As a self-employed individual, you are considered to have a business that is either a sole proprietorship or a partnership. A sole proprietorship is a business that is not incorporated and is owned by one person whose goal is to make a profit. A partnership is a business owned by two or more persons who have the same goal.

If you are in doubt of your status, refer to the CRA publication entitled Employee or Self-employed (RC4110)

Non-Residents/International

Residency status:
CRA is responsible for determining the residency status of an individual for income tax purposes. While this evaluation is done on a case by case basis, as a general rule, a person is considered to be a resident of Canada as long as he or she maintains residential ties with Canada while abroad - dwelling place, spouse or common-law partner or dependants.
As a resident of Canada, you are subject to paying tax on your world wide income for the entire calendar year. If you are here for only part of the year, you are responsible for the income tax on your worldwide income during the period that you reside in Canada and you are taxed as a non-resident for the remaining part. As a non-resident, your income tax is only payable on income earned inside Canada.

If you leave Canada and sever all residential ties, you are considered to be a non-resident of Canada for income tax purposes. If you enter Canada, CRA will have to determine whether or not you are a resident of Canada based on whether or not you have established residential ties to Canada. For further information about residency status for income tax purposes, refer to Emigrants and Income Tax (T4056) or you may call 1-800-267-5177.

Visitor Rebate Program:
Your visitors to Canada may claim a rebate on the GST paid on purchases made while in Canada but they must provide proof that the goods were exported from Canada. Upon their departure, their goods are inspected and the original receipts, validated by a customs officer. Forms are available on the CRA website at www.cra-arc.gc.ca or by certain private companies that provide this service for a fee.

Fairness and Appeals

The Canada Revenue Agency strives to treat all its clients with fairness, to ensure they are aware of all their rights and obligations and to work with each individual client according to their means. These rights are outlined in the publication Your Rights (RC4213) on the website
www.cra-arc.gc.ca

You may obtain clarification of your assessment by visiting your tax services office. If you do not agree with the information that you receive, you can file an objection by sending a letter or completing the form Objection - Income Tax Act (T400A) to the Chief of Appeals at your local Tax Services You should provide the reasons for your objection and send all documentation that you have on hand.

An objection has to filed no later than 90 days of the mailing of the Notice of Assessment. If you miss the deadline, you can apply for an extension but that must be done no later than one year from the original deadline. If you do not obtain an extension, you may apply to the Tax Court of Canada for further consideration.

Your objection will be reviewed by the Appeals Division which operates at arm's length. They will contact you or your representative to discuss the matter and will render a decision. If your tax return is adjusted, you will receive a Notice of Reassessment. If the original assessment is upheld, you will receive a Notice of Confirmation.

If you disagree with the Appeals Division's decision, you may appeal to the Tax Court of Canada. This appeal must be received no later than 90 days from the day following the mailing date of the decision.

Judgments from the Tax Court of Canada can be appealed to the Federal Court of Appeal and that judgment can be appealed to the Supreme Court of Canada with that court's permission. Each year, individual Canadians do make changes to our tax laws through such processes.

General Filing Information

Canadians are able to file income tax using EFILE, NETFILE or TELEFILE. You can prepare your own income tax return for an EFILE service provider or you can have an EFILE service provider prepare it for you and EFILE it.

You can complete your income tax return using computer software and file it over the Internet. Visit www.netfile.gc.ca for more information.

You may be able to file your income tax return at no charge by telephone or TELEFILE. You can call 1-800-959-8281 or visit www.cra.gc.ca/telefile to see if you qualify. If you are unable to use the touch tone keypad because of a disability, please call 1-800-714-7257 for assistance.

Income tax returns have to be filed on or before April 30th.

Community Volunteer Income Tax Program

We wish to gratefully acknowledge Paddy Torsney, MP Burlington, Ontario and her staff with the preparation of this information