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Foreign income

As a resident of Canada, you have to report your income from all sources, both inside and outside Canada.

How do you report foreign income and other amounts?

Report foreign income and other amounts (such as expenses and taxes paid) in Canadian dollars. Use the Bank of Canada exchange rate in effect on the day you received the income or paid the expense. If the amount was paid at various times throughout the year, visit the Bank of Canada Web site, or contact us for an average annual rate.

Tax Tip
If you paid foreign taxes on foreign income you received, do not reduce the amount you report by the amount of tax the foreign country withheld. However, you may be able to claim a foreign tax credit when you calculate your federal and provincial or territorial taxes. For more information, see Form T2209, Federal Foreign Tax Credits, and Form T2036, Provincial or Territorial Foreign Tax Credit.

Foreign property

On page 2 of your return, there is a question for you to answer about owning or holding foreign property at any time in 2011. This refers to:

  • foreign property you owned; and
  • your share of foreign property in which you had an interest.

Tick "Yes" if the total cost of all these properties was more than CAN$100,000 in 2011. Attach a completed copy of Form T1135, Foreign Income Verification Statement, to your paper return. If you are filing your return electronically, send Form T1135 to the address mentioned in the instructions on the form.

Note
Foreign property does not include:

  • property in your registered retirement savings plan (RRSP), registered retirement income fund (RRIF), or registered pension plan (RPP);
  • mutual funds registered in Canada that contain foreign investments;
  • property you used or held exclusively in the course of carrying on your active business; or
  • your personal-use property.

Form T1135 contains more information about filing and a complete list of the different kinds of foreign property.

Shares of a non-resident corporation

If you (either alone or with related persons) held 10% or more of the shares of a non-resident corporation, you may have to file an additional return. For more information, see Form T1135, Foreign Income Verification Statement, or contact us.

Loans and transfers to non-resident trusts

In 2011 or a previous year, you may have loaned or transferred funds or property to a non-resident trust. If so, you may have to complete and file Form T1141, Information Return in Respect of Transfers or Loans to a Non-Resident Trust. For more information, see Form T1141.

Beneficiaries of non-resident trusts

In 2011, you may have received funds or property from, or been indebted to, a non-resident trust under which you were a beneficiary. If so, you may have to complete and file Form T1142, Information Return in Respect of Distributions from and Indebtedness to a Non-Resident Trust. For more information, see Form T1142.

Total income (lines 101 to 146)

You have to report as income most amounts you received in 2011.

Amounts that are not taxed

You do not have to report certain amounts as income, including the following:

  • any GST/HST credit or Canada Child Tax Benefit payments, as well as those from related provincial or territorial programs;
  • child assistance payments and the supplement for handicapped children paid by the province of Quebec;
  • compensation received from a province or territory if you were a victim of a criminal act or a motor vehicle accident;
  • lottery winnings;
  • most gifts and inheritances;
  • amounts paid by Canada or an ally (if the amount is not taxable in that country) for disability or death due to war service;
  • most amounts received from a life insurance policy following someone's death;
  • most payments of the type commonly referred to as strike pay you received from your union, even if you perform picketing duties as a requirement of membership; and

    Note
    Income earned on any of the above amounts (such as interest you earn when you invest lottery winnings) is taxable.

Retroactive lump-sum payments

If you received a lump-sum payment of eligible income in 2011, parts of which were for previous years after 1977, you have to report the whole payment on the appropriate line of your return for 2011.

We will not reassess the returns for the previous years to include this income. However, you can ask us to tax the parts for the previous years as if you received them in those years. We can apply this calculation to the parts that relate to years throughout which you were resident in Canada, if the total of those parts is $3,000 or more (not including interest) and the result is better for you.

Eligible income includes:

  • employment income and damages for loss of employment received by order or judgment of a competent tribunal, as an arbitration award, or under a lawsuit settlement agreement;
  • periodic pension benefits, which do not include Canada Pension Plan or Quebec Pension Plan benefits (see Line 114);
  • wage-loss replacement plan benefits;
  • support payments for a spouse, common-law partner, or child; and
  • Employment or Unemployment Insurance benefits.

To ask us to apply this calculation, attach to your paper return all completed copies of Form T1198, Statement of Qualifying Retroactive Lump-Sum Payment, that payers have given you. We will tell you the results on your notice of assessment or notice of reassessment.

Loans and transfers of property

You may have to report income, such as dividends (see Line 120) or interest (see Line 121) from property (including money and any replacement property) you loaned or transferred to your spouse or common-law partner, child, or other relative. You may also have to report capital gains (see Line 127) or losses from property you loaned or transferred to your spouse or common-law partner.

For more information, see interpretation bulletins IT-510, Transfers and Loans of Property Made After May 22, 1985 to a Related Minor, and IT-511, Interspousal and Certain Other Transfers and Loans of Property.

Split income of a child under 18

Certain income of a child who was born in 1994 or later is not subject to the rules discussed under "Loans and transfers of property" in the previous section. It is subject to a special tax, but it also qualifies for a deduction. This applies to the following amounts received directly or through a trust (other than a mutual fund trust) or partnership:

  • shareholder benefits that relate to shares that are not listed on a designated stock exchange; and
  • dividends from shares (not including those in a mutual fund corporation or listed on a designated stock exchange).

Note
A child under 18 may be subject to the tax on split income in respect of dividends on shares of a corporation. Under proposed changes, after March 21, 2011, any capital gain from the disposition of those shares to a person who does not deal at arm’s length with the child, will be deemed to be a dividend. This deemed dividend is subject to the tax on split income and is considered to be an other than eligible dividend for the purposes of the dividend tax credit.

The above also applies to income from a trust (other than a mutual fund trust) or partnership for providing property or services to (or in support of) a business operated by:

  • someone related to the child at any time in the year;
  • a corporation that has a specified shareholder who is related to the child at any time in the year; or
  • a professional corporation that has a shareholder who is related to the child at any time in the year.

The special tax and deduction do not apply if:

  • the income is from property the child inherits from a parent;
  • the income is from property inherited by the child from anyone else and, during the year, he or she is enrolled full-time in a post-secondary institution or qualifies for the disability amount (line 316 of Schedule 1);
  • the child was a non-resident of Canada at any time in the year; or
  • neither of the child's parents was a resident of Canada at any time in the year.

How to report

The child still reports the income on the appropriate lines of his or her return. However, he or she can claim a deduction on line 232 for this income. The special tax is included in the calculation of his or her federal and provincial or territorial taxes. To calculate this tax, complete Form T1206, Tax on Split Income. Attach the form to the child's paper return.

Tax shelters

To claim deductions, losses, or credits from tax shelter investments, attach to your paper return any applicable T5003 slips and a completed Form T5004, Claim for Tax Shelter Loss or Deduction. Also, if applicable, attach any T5013A slips. Your form must show the tax shelter identification number.

Tax Tip
For information about how to protect yourself against tax schemes, go to our Tax Alert page.

Line 101 - Employment income

Enter the total of amounts shown in box 14 of all your T4 slips. If you have not received your slip by early April, or if you have any questions about an amount on a slip, contact your employer. For more information, see What if you are missing information?

If you have employment expenses, see Line 229 for more information.

If you received payments from a wage-loss replacement plan shown in box 14 of your T4 slips, you may not have to report the full amount on your return. Report the amount you received minus the contributions you made to the plan if you did not use them on a previous year’s return to calculate the amounts to report. For more information, see Interpretation Bulletin IT 428, Wage Loss Replacement Plans.

Notes
If you report employment income on line 101, you can claim the Canada employment amount on line 363 of Schedule 1.

If you received a housing allowance as a member of the clergy, the allowance may be shown in box 14 of your T4 slips. If so, subtract the amount of the allowance from the amount shown in box 14, and enter the difference on line 101. Report the allowance on line 104.

If you have employment income from another country, report it on line 104 of your return.

If tips you received through employment are not shown on your T4 slips, report them on line 104.

You may be able to make CPP contributions on certain employment income for which no contribution was made (for example, tips not shown on your T4 slips) or extra contributions on T4 income if you had more than one employer in the year. For more information, see Making additional CPP contributions under line 308.

Tax Tip
Your contributions to the Canada Pension Plan or Quebec Pension Plan (box 16 or 17 of your T4 slips and any amount on line 421) determine the amount of benefits you will receive under either of these plans. If there are no contributions shown in box 16 or 17 of your T4 slips, or if you have any questions about the amount of your contributions, contact your employer.

Emergency volunteers

In 2011, you may have received a payment from a government, municipality, or other public authority for your work as a volunteer ambulance technician, firefighter, or search, rescue, or other emergency worker. If so, the T4 slips issued by such an authority will generally show only the taxable part of the payment, which is the part that is more than $1,000. However, if that authority employed you (other than as a volunteer) for the same or similar duties, the whole payment will be taxable.

Volunteer firefighters

The exempt part of a payment for your work as a volunteer firefighter is shown in box 87 of your T4 slips. Under proposed changes, you cannot claim both this exemption and the volunteer firefighters’ amount. If you are claiming the exemption, report only the amount shown in box 14 of your T4 slips. If you claim the $3,000 volunteer firefighters’ amount, add the amounts shown in boxes 87 and 14 of your T4 slips and enter the result on line 101. For more information about the volunteer firefighters’ amount, see Line 362.

Security option benefits

Report taxable benefits you received in (or carried forward to) 2011 on certain security options you exercised. If you report any taxable benefits, see Line 249 for more information.

For eligible securities under option agreements exercised up to and including 4:00 p.m. Eastern standard time on March 4, 2010, that were not granted by a Canadian controlled private corporation (CCPC), an income deferral of the taxable benefit may have been allowable subject to an annual limit of $100,000 on the fair market value of the eligible securities.

If you exercised an option for eligible securities after 4:00 p.m. Eastern standard time, on March 4, 2010, that was not granted by a CCPC, the election to defer the benefit is no longer available for those securities.

Your notice of assessment or notice of reassessment will show the remaining balance of your deferred amounts. For more information, see Guide T4037, Capital Gains, or contact us.

Commissions (box 42)

Enter on line 102 the total commissions shown in box 42 of all your T4 slips you received as an employee. This amount is already included in your income on line 101, so do not add it again when you calculate your total income on line 150. If you have commission expenses, see Line 229 for more information.

If you are a self-employed commission salesperson, see Guide T4002, Business and Professional Income, to determine how to report your commission income and claim your expenses.

Line 104 - Other employment income

Report on this line the total of the following amounts:

  • Employment income not reported on a T4 slip - Report amounts such as tips and occasional earnings.

    Notes
    If you report employment income on line 104, you can claim the Canada employment amount on line 363 of Schedule 1.

    Fees for services shown in box 048 of your T4A slips must be reported on the applicable self-employment line of your return (lines 135 to 143).

  • Net research grants - Subtract your expenses from the grant you received and report the net amount on this line. Your expenses cannot be more than your grant. Attach to your paper return a list of your expenses. For more information, see Pamphlet P105, Students and Income Tax.
  • Clergy's housing allowance -Report the amount shown in box 30 on your T4 slips. You may be entitled to claim a deduction on line 231.

    Note
    If the allowance is shown in box 14 of your T4 slips, subtract the amount of the allowance from the amount shown in box 14 and enter the difference on line 101. Enter the allowance on line 104. You may be entitled to claim a deduction on line 231.

  • Foreign employment income - Report your earnings in Canadian dollars (see How do you report foreign income and other amounts?). The amount on your United States W-2 slip may have been reduced by contributions to a "401(k), 457 or 403(b) plan, US Medicare and Federal Insurance Contributions Act (FICA)". If this is the case, you must add these contributions to your foreign employment income on line 104 on your Canadian return. Based on the new Protocol between Canada and the United-States, these contributions may be deductible. For more information, see Line 207.
  • Income-maintenance insurance plans (wage-loss replacement plans) - This income is shown in box 107 of your T4A slips. You may not have to report the full amount on your return. Report the amount you received, minus contributions you made to the plan after 1967, if you did not use them on a previous year's return to calculate the amount to report. For more information, see Interpretation Bulletin IT-428, Wage Loss Replacement Plans.
  • Veterans' benefits - Report the amount shown in box 127 of your T4A slip.
  • Certain GST/HST and QST (Quebec sales tax) rebates - If you are an employee who paid and deducted employment expenses in 2010 or earlier, you may have received a GST/HST or QST rebate in 2011 for those expenses. If so, report on line 104 the rebate you received. However, a rebate on which you can claim capital cost allowance is treated differently. For more information, see Guide T4044, Employment Expenses.
  • Royalties - Report these amounts on this line if you received them for a work or invention of yours. Report other royalties (other than those included on line 135) on line 121.
  • Amounts you received under a supplementary unemployment benefit plan (a guaranteed annual wage plan) - Report the amount shown in box 152 of your T4A slips.
  • Taxable benefit for premiums paid to cover you under a group term life-insurance plan - Report the amount shown in box 119 of your T4A slips.
  • Employee profit-sharing plan - Report the amount shown in box 35 of your T4PS slips.
  • Medical premium benefits - Report the amount shown in box 118 of your T4A slips.
  • Wage Earner Protection Program - Report the amount shown in box 132 of your T4A slips.

Line 113 - Old Age Security pension (OAS)

Enter the amount shown in box 18 of your T4A(OAS) slip. For more information about how to report the amount shown in box 21, see Line 146. If you have not received your T4A(OAS) slip, visit the Service Canada Web site, or call 1-800-277-9914.

Notes
You may have to repay OAS benefits (see Line 235) if the result of the following calculation is more than $67,668:

The amount recovered from your gross OAS pension because of an overpayment you received in a previous period is shown in box 20 of your T4A(OAS) slip. You can claim a deduction on line 232 for the amounts repaid.

If, at any time in 2011 you were a non resident of Canada receiving an OAS pension, you may also have to complete Form T1136, Old Age Security Return of Income. For more information, see Guide T4155, Old Age Security Return of Income Guide for Non-Residents, or contact the International Tax Services Office. To get Form T1136 and Guide T4155, go to our Forms and publications page.

Line 114 - CPP or QPP benefits

Enter the total Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) benefits shown in box 20 of your T4A(P) slip. This amount is the total of the amounts shown in boxes 14 to 18. If your T4A(P) slip has an amount shown in box 16, 17, or 18, read the following sections that apply to you. If you have not received your T4A(P) slip, visit the Service Canada Web site, or call 1-800-277-9914.

Lump-sum benefits - If you received a lump-sum CPP or QPP payment in 2011, parts of which were for previous years, you have to report the whole payment on line 114 of your return for 2011. We will not reassess the returns for the previous years to include this income. However, if the total of the parts that relate to previous years is $300 or more, we will calculate the tax payable on those parts as if you received them in those years only if the result is better for you. If you received a letter from Service Canada showing amounts that apply to previous years, attach it to your paper return.We will tell you the results on your notice of assessment or notice of reassessment.

CPP or QPP disability benefit (box 16)

Enter on line 152, located below and to the left of line 114, the amount of your CPP or QPP disability benefits shown in box 16. This amount is already included in your income on line 114, so do not add it again when you calculate your total income on line 150.

CPP or QPP child benefit (box 17)

Report a child benefit only if you received it because you were the child of a deceased or disabled contributor. Any benefits paid for your children are their income, even if you received the payment.

CPP or QPP death benefit (box 18)

If you received this amount and you are a beneficiary of the deceased person's estate, you can choose to report it on line 114 of your own return or on a T3 Trust Income Tax and Information Return for the estate. Do not report it on the deceased person's individual return. The taxes payable may be different, depending on which return you use. For more information, see Guide T4013, T3 Trust Guide.

Line 115 - Other pensions or superannuation

Enter on line 115 any other pensions or superannuation you received, such as amounts shown in box 016 of your T4A slips and box 31 of your T3 slips. Report on line 130 any amount shown in box 018 of your T4A slips or box 22 of your T3 slips.

You may also have to report on this line other amounts you received. Read the following sections that apply to you.

Annuity and registered retirement income fund (RRIF), including life income fund, payments

Report the amount shown in box 024 or box 133 of your T4A slips, box 16 or 20 of your T4RIF slips, or box 19 of your T5 slips as follows:

  • If you were 65 years of age or older on December 31, 2011, report it on line 115.
  • Regardless of your age, if you received it because your spouse or common-law partner died, report it on line 115.
  • Otherwise, report on line 130 the amount shown in box 024 or box 133 of your T4A slips or box 16 or 20 of your T4RIF slips. Report on line 121 the amount shown in box 19 of your T5 slips.

Note
If there is an amount shown in box 18 or 22 of your T4RIF slips, see the instructions on the back of the slip.

Saskatchewan Pension Plan (SPP)

Report on line 115 SPP payments shown in box 016 of your T4A slip. For more information about the SPP, visit Saskatchewan Pension Plan.

SPP payments are eligible for the pension income amount (see Line 314).

Tax Tips
If you have to report your pension, annuity, and RRIF payments on line 115, you may be able to claim the pension income amount (see Line 314).

You may also be able to jointly elect with your spouse or common-law partner to split your pension, annuity, and RRIF (including life income fund) payments you reported on line 115 if both of the following apply:

  • you were both residents of Canada on December 31, 2011 (or were residents of Canada on the date of death); and
  • you and your spouse or common-law partner were not, because of a breakdown in your marriage or common-law relationship, living separate and apart from each other at the end of the year and for a period of 90 days commencing in the year.

To make this election, you and your spouse or common-law partner must complete Form T1032, Joint Election to Split Pension Income.

Note
If you elected to split your pension, superannuation, annuity, RRIF
(including life income fund) payments, and SPP payments with your spouse or common-law partner, you (the pensioner) must still report the full amount on line 115, but you can claim a deduction for the elected split pension amount. For more information, see Line 210.

Pensions from a foreign country

Report in Canadian dollars the gross amount of your foreign pension income you received in 2011. See How do you report foreign income and other amounts? Attach a note to your paper return identifying the type of pension you received and the country it came from. In some cases, amounts you receive may not be considered pension income, and you may have to report them elsewhere on your return.

United States individual retirement arrangement (IRA) - If, during 2011, you received amounts from an IRA or converted the IRA to a "Roth" IRA, contact us.

Tax Tip
You can claim a deduction on line 256 for the part of your foreign pension income that is tax-free in Canada because of a tax treaty. If you do not know whether any part of your foreign pension is tax-free, contact us.

United States Social Security - Report on line 115 the full amount, in Canadian dollars, of your U.S. Social Security benefits and any U.S. Medicare premiums paid on your behalf. You can claim a deduction for part of this income. For more information, see Line 256.

Benefits paid for your children are their income, even if you received the payments.

Line 116 - Elected split-pension amount

If you and your spouse or common-law partner have jointly elected to split your spouse’s or common-law partner’s eligible pension income by completing Form T1032, Joint Election to Split Pension Income, you (the pension transferee) must enter on this line the elected split-pension amount from line E of Form T1032.

File Form T1032 by your filing due date for the year (see What date is your return for 2011 due?). This form must be attached to both your and your spouse's or common-law partner's paper returns. The information provided on the forms must be the same. If you are filing electronically, keep your election form in case we ask to see it.

Note
Only one joint election can be made for a tax year. If both you and your spouse or common-law partner have eligible pension income, you will have to decide if you are splitting your pension income or your spouse's or common-law partner's pension income.

Line 117 - Universal Child Care Benefit (UCCB)

If you had a spouse or common-law partner on December 31, 2011, the one with the lower net income must report the UCCB. Enter on line 117 the amount shown in box 10 of the RC62 slip.

If you were a single parent on December 31, 2011, you can choose one of the following options:

  • Include all UCCB amounts you received in 2011 in the income of the dependant for whom the amount for an eligible dependant (line 305 of Schedule 1) is being claimed. If there is no claim for an eligible dependant, you can choose to include all UCCB amounts in the income of a child for whom you received the UCCB. If you choose this option, enter on line 185, located below and to the left of line 117, the amount shown in box 10 of the RC62 slip. Do not enter the amount on line 117.
  • Include all UCCB amounts you received in 2011 in your own income. If you choose this option, enter on line 117 the amount shown in box 10 of the RC62 slip. Do not enter the amount on line 185.

Note
The UCCB income you report will not be included in the calculation of your GST/HST credit, your Canada Child Tax Benefit (CCTB) payments and any related provincial or territorial credits and benefits, the social benefits repayment (line 235), the refundable medical expense supplement (line 452), or the Working Income Tax Benefit (WITB) (line 453).

In 2011, you or your spouse or common-law partner may have repaid an amount included in your or your spouse's or common-law partner's income for a previous year. If this applies to you, see Line 213.

Lump-sum benefits - If you received the UCCB in 2011 as a lump-sum, parts of which were for a previous year, you must report the full amount of the payment in 2011. Read the instructions above on how to report this income.

We will not reassess the returns for the previous years to include this income. However, if you have to report on line 117 a UCCB lump-sum payment you received in 2011, and the total of the parts that relate to previous years is $300 or more, we will calculate the tax payable on those parts as if you received them in those years only if the result is better for you. Box 10 of the RC62 slip will show the breakdown of the payment as it applies to each year. We will tell you the results on your notice of assessment or notice of reassessment.

Note
This special calculation will not apply if you designated the lump-sum payment benefit to a dependant and entered the amount on line 185.

Line 119 - Employment Insurance and other benefits

Enter the amount shown in box 14 of your T4E slip, minus any amount shown in box 18 (if applicable). If you have already repaid excess benefits you received directly to the payer of your benefits, you may be able to claim a deduction. For more information, see Line 232.

Note
You may have to repay some of the benefits you received (see Line 235) if the result of the following calculation is more than $55,250:

  • the amount from line 234; minus
  • the amounts reported on lines 117 and 125; plus
  • the amount deducted on line 213 and/or the amount for a repayment of registered disability savings plan income included on line 232.

Line 120 - Taxable amount of dividends (eligible and other than eligible) from taxable Canadian corporations

There are two types of dividends, eligible and other than eligible dividends, you may have received from taxable Canadian corporations.

If you need more information about the type of dividends you received, contact the payer of your dividends.

How to report

Complete Part I of Schedule 4.

Enter on line 180 the taxable amount of dividends (other than eligible dividends) as shown in box 11 of T5 slips, box 25 of T4PS slips, box 32 of T3 slips, and box 51-1 of T5013 or T5013A slips.

Enter on line 120 the taxable amount of all dividends from taxable Canadian corporations, as shown in boxes 11 and 25 of T5 slips, boxes 25 and 31 of T4PS slips, boxes 32 and 50 of T3 slips, and boxes 51-1 and 52-1 of T5013 or T5013A slips.

If you did not receive an information slip, you must calculate the taxable amount of other than eligible dividends by multiplying the actual amount of dividends (other than eligible) you received by 125%. Report the result on line 180.

You must also calculate the taxable amount of eligible dividends by multiplying the actual amount of eligible dividends you received by 141%. Report the combined total of eligible and other than eligible dividends on line 120.

Dividends received from taxable Canadian corporations qualify for the dividend tax credit, which can reduce the amount of tax you pay. You can claim this credit when you calculate your federal and provincial or territorial taxes. Read the instructions for line 425.

Report on line 121 any foreign dividends you received.

Notes
Special rules apply for income from property (including shares) one family member lends or transfers to another. For more information, see Loans and transfers of property.

If a child who was born in 1994 or later is reporting certain dividends, see Split income of a child under 18.

Tax Tip
In some cases, it may be better for you to report all the taxable dividends your spouse or common-law partner received from taxable Canadian corporations. You can do this only if, by including the dividends in your income, you will be able to claim or increase your claim for the spouse or common-law partner amount (line 303 of Schedule 1).

If you use this option, you may be able to take better advantage of the dividend tax credit. Do not include these dividends in your spouse's or common-law partner's income when you calculate claims such as the spouse or common-law partner amount on line 303 or amounts transferred from your spouse or common-law partner on Schedule 2.

Line 121 - Interest and other investment income

The amounts you report for the year depend on the type of investment and when you made it. Report on line 121 amounts you received minus any part of those amounts you reported in previous years. Also report amounts credited to you but that you did not receive (such as amounts that were reinvested).

The amounts to report include those shown in boxes 13, 14, and 15 of T5 slips, box 25 of T3 slips, and boxes 50 and 55 of T5013 or T5013A slips. You also have to report the interest on any tax refund you received in 2011, which is shown on your notice of assessment or notice of reassessment.

If you received foreign interest or dividend income, make sure you report it in Canadian dollars. For more information, see How do you report foreign income and other amounts?

If you own an interest in a foreign investment entity or an interest in a foreign insurance policy, you may have to report investment income. For more information, contact us.

If, as a shareholder in a foreign corporation, you received certain shares in another foreign corporation, you may not have to report any amount in income for receiving those shares. For more information, get Form T1135, Foreign Income Verification Statement, or contact us.

Notes
Special rules apply for income from most property (including money) one family member lends or transfers to another. For more information, see Loans and transfers of property.

Generally, when you invest your money in your child's name, you have to report the income from those investments. However, if you deposited Canada Child Tax Benefit or Universal Child Care Benefit payments into a bank account or trust in your child's name, the interest earned on those payments is your child's income.

If a child who was born in 1994 or later is reporting certain investment income, see Split income of a child under 18.


How to report

Enter a list of your investments in Part II of Schedule 4. Generally, you report your share of interest from a joint investment based on how much you contributed to it.

Example
Sally and Roger received a T5 slip from their joint bank account showing the $400 interest they earned in 2011. Sally had deposited $4,000 and Roger had deposited $1,000 into the account.

Roger reports $80 interest, calculated as follows:

$1,000 (his share) × $400 (total interest) = $80
$5,000 (total)

Sally reports $320 interest, calculated as follows:

$4,000 (her share) × $400 (total interest) = $320
$5,000 (total)

Bank accounts

Report interest paid or credited to you in 2011, even if you did not receive an information slip. You may not receive a T5 slip for amounts under $50.

Term deposits, guaranteed investment certificates (GICs), and other similar investments

On these investments, interest builds up over a period of time, usually longer than one year. Generally, you do not receive the interest until the investment matures or you cash it in. For information about Canada Savings Bonds, see the next section.

The amount of income you report is based on the interest you earned during each complete investment year. For example, if you made a long-term investment on July 1, 2010, report on your return for 2011 the interest that accumulated to the end of June 2011, even if you do not receive a T5 slip. Report the interest from July 2011 to June 2012 on your 2012 return.

Note
Your investment agreement may specify a different interest rate each year. If so, report the amount shown on your T5 slips, even if it is different from what the agreement specifies or what you received. The issuer of your investment can tell you how this amount was calculated.

For most investments you made in 1990 or later, you have to report the interest each year, as you earn it. For information about reporting methods for investments made in 1989 or earlier, use Info-Tax, one of our TIPS services, or see Interpretation Bulletin IT-396, Interest Income.

Canada Savings Bonds

Interest on a regular interest ("R") bond is paid annually until the bond matures or you cash it in. Interest on a compound interest ("C") bond is not paid until you cash it in. For both kinds of bonds, report the amount shown on the T5 slips.

Treasury bills (T-bills)

If you disposed of a T-bill at maturity in 2011, you have to report as interest the difference between the price you paid and the proceeds of disposition shown on your T5008 slips or account statement.

If you disposed of a T-bill before maturity in 2011, you may also have to report a capital gain or loss. For more information, see Guide T4037, Capital Gains.

Earnings on life insurance policies

Report the earnings that have accumulated on certain life insurance policies in the same way as you do for other investments. In all cases, your insurance company will send you a T5 slip. For policies bought before 1990, you can choose to report accumulated earnings annually by telling your insurer in writing.

Line 122 - Net partnership income: limited or non-active partners only

Enter on line 122 your share of the net income or loss from a partnership if the partnership did not include a rental or farming operation and you were either:

  • a limited partner; or
  • not actively involved in the partnership and not otherwise involved in a business or profession similar to that carried on by the partnership.

Report your net rental income or loss from a partnership on line 126. Report your net farming income or loss from a partnership on line 141.

If none of the above applies to you, enter your share of the partnership's net income or loss on the applicable self-employment line of your return (see lines 135 to 143).

Notes
If the partnership has a loss, the amount you can claim could be limited. For more information, contact us.

If a child who was born in 1994 or later is reporting certain limited or non-active partnership income, see Split income of a child under 18.

If you have a tax shelter, see Tax shelters.

How to report

  • Complete Part III of Schedule 4.
  • Attach to your paper return a T5013 or T5013A slip. If you did not receive one, attach a copy of the partnership's financial statement. For more information, see lines 135 to 143.

Note
You may have to make Canada Pension Plan contributions on the net income you report on line 122. For more information, see Line 222.

Line 125 - Registered disability savings plan (RDSP) income

If you have received income from an RDSP in 2011, enter the amount shown in box 131 of your T4A slips. For more information, go to our Registered disability savings plan (RDSP) page, see Information Sheet RC4460, Registered Disability Savings Plan, or contact us.

Note
The RDSP income you report will not be included in the calculation of your GST/HST credit, your Canada Child Tax Benefit (CCTB) payments (including those from certain related provincial or territorial programs), the social benefits repayment (line 235), the refundable medical expense supplement (line 452), or the Working Income Tax Benefit (WITB) (line 453).

Line 126 - Rental income

Enter your gross rental income on line 160 and your net rental income or loss on line 126. If you have a loss, show the amount in brackets. If you were a member of a partnership, you should also report any amount shown in boxes 23 and 26 of your T5013 or T5013A slips or any amount the partnership allocated to you in its financial statements.

You have to include with your paper return a statement (you can use Form T776, Statement of Real Estate Rentals) showing your rental income and expenses for the year. If it applies, also include your T5013 slips or a copy of the partnership's financial statement.

For more information about rental activities, see Guide T4036, Rental Income, which includes Form T776.

If you have a tax shelter, see Tax shelters.

Line 127 - Taxable capital gains

You may have a capital gain or loss when property is disposed of, such as when real estate or shares (including those in mutual funds) are sold. Generally, if the total of your gains for the year is more than the total of your losses, you have to report 50% of the difference as income. However, if the total of your losses for the year is more than the total of your gains, you cannot deduct the difference on your return for the year. See the next section called How to report.

You may have a deemed taxable capital gain if you are electing for the special relief in respect of the gains from a disposition of eligible securities on which you elected in a previous year to defer the security option benefits. For more information, see Form RC310, Election for Special Relief for Tax Deferral Election on Employee Security Options, and Guide T4037, Capital Gains.

If you have a capital gain or loss from selling or redeeming your mutual fund units or shares, get Information Sheet RC4169, Tax Treatment of Mutual Funds for Individuals, for more information.

If you realized a capital gain as a result of a mortgage foreclosure or conditional sales repossession, this gain is not included in income when we calculate your GST/HST credit, your Canada Child Tax Benefit payments, your Child Disability Benefit payments, the social benefits repayment (line 235), the age amount (line 301 of Schedule 1), the refundable medical expenses supplement (line 452), the Working Income Tax Benefit (WITB) (line 453), or Prince Edward Island, Nova Scotia, New Brunswick, or Newfoundland and Labrador tax reductions. If this applies to you, contact us for more information.

When you donate capital property to a registered charity, we consider you to have disposed of the property at its fair market value. As a result, you may have to report a capital gain or loss for that property. There are special rules for donations of certain property. For more information, see Guide T4037, Capital Gains, and Pamphlet P113, Gifts and Income Tax.

For donations of publicly traded securities, the inclusion rate of zero has been extended to any capital gain realized on the exchange of shares of the capital stock of a corporation for those publicly listed securities donated. This treatment is subject to certain conditions. In cases where the exchanged securities are partnership interests, a special calculation is required to determine the capital gain to be reported. For more information about exchangeable securities, see Pamphlet P113, Gifts and Income Tax.

Under proposed changes, donations of certain flow-through share properties may give rise to a deemed capital gain that is subject to an inclusion rate of 50%. For more information, see Pamphlet P113, Gifts and Income Tax.

How to report

Complete Schedule 3, and attach it to your paper return. Generally, if all of your gains or losses are shown on T4PS, T5, T5013, or T5013A slips, enter the total of amounts on line 174 of Schedule 3. If they are shown on T3 slips, enter the total of amounts on line 176. Also attach these documents to your paper return. If your securities transactions are shown on an account statement or a T5008 slip, use the information on these documents to help you complete Schedule 3. For more information about these and other capital dispositions, see Guide T4037, Capital Gains.

If the result on line 199 of Schedule 3 is positive (a gain), enter the amount on line 127 of your return. If the result is negative (a loss), do not claim the amount on line 127 of your return. We will register it in our system. Keep track of this loss, which you can use to reduce your taxable capital gains of other years. The following notes explain how to do this.

Notes
You may have incurred a net capital loss in 2011 you want to apply against taxable capital gains you reported on your 2008, 2009, or 2010 return. For more information and to carry back the loss, get Form T1A, Request for Loss Carryback, and Guide T4037, Capital Gains. Attach a completed Form T1A to your paper return (or send one to us separately). Do not file an amended return for the year or years to which you want to apply the loss.

If you are completing a return for a person who died in 2011, see Guide T4011, Preparing Returns for Deceased Persons, for more information about special rules that apply to claiming these losses.

Tax Tip
You may be able to claim a deduction for your capital gains. For more information, see Line 254.

Line 128 - Support payments received

Enter on line 156 the total of all taxable and non-taxable support payments you received for yourself and/or for a child (or, if you are the payer, the payments that were repaid to you under a court order) in 2011. Enter on line 128 only the taxable amount.

Note
Most child support payments received according to a written agreement or court order dated after April 1997, are not taxable. For more information, see Guide P102, Support Payments.

Tax Tips
You may be able to claim a deduction on line 256 for the part of the payments you received from a resident of another country that is tax-free in Canada because of a tax treaty. If you do not know whether any part of the payments is tax-free, contact us.

You may be able to claim a deduction on line 220 for support payments you repaid under a court order. For more information, see Guide P102, Support Payments.

Line 129 - RRSP income

Enter on line 129 the total of amounts shown in boxes 16, 18, 28, and 34 of all your T4RSP slips. Also report amounts shown in boxes 20, 22, and 26, unless your spouse or common-law partner made a contribution to your RRSP. For more information, see "RRSPs for spouse or common-law partner" in the next section.

Note
If you report a refund of RRSP premiums shown in box 28 of your T4RSP slips, and you rolled over an amount to a registered disability savings plan (RDSP), you may be able to claim a deduction. See Line 232 for more information. For more information about RDSPs, go to our Registered disability savings plan (RDSP) page or see Guide T4040, RRSPs and Other Registered Plans for Retirement.

Tax Tips
If unused RRSP contributions you made after 1990 were refunded to you or your spouse or common-law partner in 2011, you may be able to claim a deduction on line 232. For more information, see Line 232.

RRSP annuity payments you report on line 129 (shown in box 16 of your T4RSP slips) qualify for the pension income amount if you were 65 years of age or older on December 31, 2011, or if you received the payments because of the death of your spouse or common-law partner (see Line 314).

You may also be able to jointly elect with your spouse or common-law partner to split your RRSP annuity payments you reported on line 129, if you meet all of the following conditions:

  • you were 65 years of age or older on December 31, 2011, or you received the payments because of the death of your spouse or common-law partner;
  • you were both residents of Canada on December 31, 2011 (or were residents of Canada on the date of death); and
  • you and your spouse or common-law partner were not, because of a breakdown in your marriage or common-law relationship, living separate and apart from each other at the end of the year and for a period of 90 days commencing in the year.
To make this election, you and your spouse or common-law partner must complete Form T1032, Joint Election to Split Pension Income.

Note
If you elected to split your RRSP annuity payments with your spouse or common-law partner, you (the pensioner) must still report the full amount on line 129, but you can claim a deduction for the elected split pension amount. For more information, see Line 210.

RRSPs for spouse or common-law partner

Your spouse or common-law partner may have to report some or all of the RRSP income shown in boxes 20, 22, or 26 of your T4RSP slips if he or she contributed to any of your RRSPs in 2009, 2010, or 2011. In that case, your T4RSP slips should have "Yes" ticked in box 24 and your spouse's or common-law partner's social insurance number shown in box 36.

To calculate the amount from an RRSP for a spouse or common-law partner that each of you has to report, complete Form T2205, Amounts from a Spousal or Common-Law Partner RRSP or RRIF to Include in Income. Both you and your spouse or common-law partner should include this form with your paper returns. However, only the person shown as the annuitant (recipient) on the T4RSP slips can claim the income tax deducted (box 30) and should attach the slips to his or her paper return.

Note
If you and your spouse or common-law partner were living apart because of a breakdown in the relationship when you withdrew funds from your RRSP, you have to report the whole amount shown on your T4RSP slips.

For more information, see Guide T4040, RRSPs and Other Registered Plans for Retirement.

Repayments under the Home Buyers' Plan (HBP) and the Lifelong Learning Plan (LLP)

If, in previous years, you withdrew funds from your RRSP under the HBP or the LLP, you may have to make a repayment for 2011. The minimum repayment is shown on your notice of assessment or notice of reassessment for 2010. To make a repayment, you have to contribute to your RRSP from January 1, 2011, to February 29, 2012, and designate your contribution as a repayment on line 6 or 7 of Schedule 7. Do not send your repayment to us.

If you repay less than the minimum amount for 2011, you have to report the difference on line 129 of your return.

Example
Kevin withdrew funds under the HBP in 2006. His minimum required repayment for 2011 was $800. The only RRSP contribution he made from January 1, 2011, to February 29, 2012, was $500 on June 18, 2011. He designated it on line 6 of Schedule 7 as a repayment under the HBP and included $300 in his income on line 129 ($800 minimum required repayment minus $500 repaid and designated).

For more information, including the rules that apply when the person who made the withdrawal dies, turns 71 years of age, or becomes a non-resident, see Guide RC4135, Home Buyers' Plan (HBP) or Guide RC4112, Lifelong Learning Plan (LLP).

To view your HBP or LLP information, go to our My Account page.

Line 130 - Other income

Use this line to report taxable income that is not reported anywhere else on the return. To find out if an amount is taxable, contact us. Make sure the amount you are reporting on line 130 is not a type of income that should have been reported on lines 101 to 129. In the space to the left of line 130, specify the type of income you are reporting. If you have more than one type of income, attach a note to your paper return giving the details.

Note
Special rules apply for income from property one family member lends or transfers to another. For more information, see Loans and transfers of property.

Scholarships, fellowships, bursaries, and artists' project grants

Elementary and secondary school scholarships and bursaries are not taxable.

Post-secondary school scholarships, fellowships, and bursaries are not taxable if you received them for your enrolment in a program that entitles you to claim the full-time education amount in 2010, 2011, or 2012. If you are not eligible for the full-time or part-time education amount, enter on line 130 the part of the post-secondary scholarships, fellowships, and bursaries you received in the year that is more than $500.

Notes
Post-secondary programs consisting mainly of research are eligible for the scholarship exemption and the education amount only if they lead to a college or CEGEP diploma, or a bachelor, masters, or doctoral (or equivalent) degree. Post-doctoral fellowships are taxable.

Under proposed changes, if you have received a scholarship, fellowship, or bursary received in connection with a part-time program for which you can claim the part-time education amount for that program, the scholarship exemption is equal to the amount of tuition paid for the program plus the costs of program-related materials.

You may also be able to claim up to an additional $500 as a scholarship exemption.

For more information, go to our Students page, or see Pamphlet P105, Students and Income Tax.

If you received an artists' project grant, see Pamphlet P105 for more information.

Report prizes and awards you received as a benefit from your employment or in connection with a business. However, this type of income is not eligible for the $500 tax-free amount. If you received a research grant, see Line 104.

For more information, see Pamphlet P105.

Apprenticeship incentive grant

If you received an apprenticeship incentive grant in 2011, report the amount shown in box 130 of your T4A slip on line 130.

For more information, visit the Service Canada Web site, or call 1-866-742-3644.

Apprenticeship completion grant

If you received an apprenticeship completion grant in 2011, report the amount shown in box 130 of your T4A slip on line 130.

For more information, visit the Service Canada Web site, or call 1-866-742-3644.

Lump-sum payments

Report lump-sum payments from pensions and deferred profit-sharing plans (box 018 of your T4A slips and box 22 of your T3 slips) you received when leaving a plan.

If, in 2011, you received a lump-sum payment that included amounts you earned in previous years, you have to report the whole payment on line 130 of your return for 2011. However, you can ask us to apply a reduced tax rate to the part relating to amounts you earned before 1972 by attaching a note to your paper return. We will tell you the results on your notice of assessment or notice of reassessment.

Retiring allowances (severance pay)

A retiring allowance includes an amount paid as severance pay. Report the amount shown in boxes 66 and 67 of your T4 slips. Also, report any retiring allowance shown in box 26 of your T3 slips.

Note
You may be able to deduct legal fees you paid to get a retiring allowance. For more information, see Line 232.

Tax Tip
You may be able to transfer part or all of your retiring allowances to your RRSP. See Line 11 - Transfers.

Death benefits (other than Canada Pension Plan or Quebec Pension Plan death benefits)

A death benefit is an amount you receive after a person's death for that person's employment service. It is shown in box 106 of your T4A slips or box 26 of your T3 slips.

You may not have to pay tax on up to $10,000 of the benefit you received. If you are the only one to receive a death benefit, report the amount you receive that is more than $10,000. Even if you do not receive the full death benefit in one year, the total tax-free amount for all years cannot be more than $10,000.

To find out what to report if anyone else also received a death benefit for the same person, use Info-Tax, one of our TIPS services, or see Interpretation Bulletin IT-508, Death Benefits.

Attach to your paper return a note stating the amount of death benefits you received but did not include in your income.

Other kinds of income

Also report the following income on line 130:

  • amounts distributed from a retirement compensation arrangement shown on your T4A-RCA slips (for more information, see the back of your slips);
  • training allowances or any other amount shown in box 028 of your T4A slips (other than amounts already mentioned for this line and lines 104, 115, and 125);
  • payments from a trust shown in box 26 of your T3 slips;
  • payments from a registered education savings plan shown in box 040 (also see Line 418) or 042 of your T4A slips;
  • certain annuity payments (see Line 115);
  • payments from a Tax-Free Savings Account (TFSA) shown in box 134 of your T4A slips; and
  • designated benefits from a registered retirement income fund shown in box 22 of your T4RIF slips, or the registered pension plan amount shown in box 018 of your T4A slips if you rolled over an amount to a registered disability savings plan (RDSP). See Line 232 for information about the corresponding deduction. For more information about RDSPs, go to Registered disability savings plan (RDSP) or see Guide T4040, RRSPs and Other Registered Plans for Retirement.

Lines 135 to 143 - Self-employment income

Enter on the appropriate line your gross and net income or loss from self-employment. If you have a loss, show it in brackets. Include with your paper return a statement showing your income and expenses.

You have to file Form T1139, Reconciliation of 2011 Business Income for Tax Purposes, with your return for 2011 if you want to keep a year-end that does not finish on December 31, 2011. However, if you filed Form T1139 with your return for 2010, you may have to complete the version of this form for 2011. For more information, see Guide RC4015, Reconciliation of Business Income for Tax Purposes.

Notes
You may have to make Canada Pension Plan contributions on your self-employment earnings (see Line 222).

You may be able to enter into an agreement with the Canada Employment Insurance Commission through Service Canada to participate in the Employment Insurance (EI) program for access to EI special benefits. For more information, contact Service Canada.

If a child who was born in 1994 or later is reporting certain self-employment income, see Split income of a child under 18.

The following guides contain more information and forms you may need to help you calculate your self-employment income:

Notes
If you are participating in the AgriStability and AgriInvest Programs and you are filing a paper return, use the envelope contained in your Guide RC4060 or Forms Book RC4408-2.

If you use your home for daycare, see Pamphlet P134, Using Your Home for Daycare, for more information.

Generally, if you were a limited or non-active partner, you enter your net income or loss on line 122. However, if your net income or loss is from a rental operation, enter the amount on line 126. If it is from a farming operation, enter it on line 141.

If you were an active partner and received a T5013 or T5013A slip, report the amount from boxes 20, 21, 35, 37, 39, 41, and 43 on the applicable line of your return. This is your share of the partnership's net income or loss. Also report the partnership's gross income as shown in boxes 162, 164, 166, 168, and 170. Attach the T5013 or T5013A slip to your paper return. If you did not receive this slip, you should attach the applicable self-employment form indicated above or a copy of the partnership's financial statement.

For more information, contact our Business enquiries service. See Contacting us.

If you have a tax shelter, see Tax shelters.

Line 144 - Workers' compensation benefits

Enter the amount shown in box 10 of your T5007 slip. Claim a deduction on line 250 for the benefits you entered on line 144.

Note
In 2011, you may have repaid salary or wages originally paid to you by your employer in a previous year, in anticipation of workers' compensation benefits you would receive. This amount should be shown in box 77 of your T4 slips. In that case, you may be able to claim a deduction on line 229. For more information, contact us.

Line 145 - Social assistance payments

Generally, you enter the amount shown in box 11 of your T5007 slip or the federal part of your Quebec Relevé 5 slip. However, if you lived with your spouse or common-law partner when the payments were made, the spouse or common-law partner with the higher net income on line 236 (not including these payments or the deductions on line 214 or 235) must report all of the payments, whether or not that person’s name is shown on the slip. If this amount is the same for both of you, the person named on the T5007 slip (or the prestataire on the federal part of the Relevé 5 slip) must report the payments.

Notes
You do not have to report certain social assistance payments you or your spouse or common-law partner received for being a foster parent or for caring for a disabled adult who lived with you. For more information, contact us. However, if the payments are for caring for your spouse or common-law partner or any individuals related to either of you, whoever has the higher net income must report those payments.

If you repay an amount that was shown on a T5007 slip or a Relevé 5 slip in a previous year, the return for that year may be adjusted based on the amended slip provided. For more information, see How do you change a return?

Claim a deduction on line 250 for the social assistance payments you entered on line 145.

Line 146 - Net federal supplements

Enter the amount shown in box 21 of your T4A(OAS) slip.

If your net income before adjustments (line 234) is $67,668 or less, claim a deduction on line 250 for the net federal supplements you entered on line 146. If the amount on line 234 of your return is more than $67,668, contact us to find out how much you can deduct on line 250.

Note
Your net income before adjustments on line 234 of your return will be reduced by the amounts entered on lines 117 and 125, and increased by any amount deducted on line 213 and/or the amount for a repayment of the registered disability savings plan income included on line 232, if required.

Date Modified: 2012-01-04