Tax related questions

Frequently Asked Questions

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• Do I really need to file a tax return?

  According to the Canada Revenue Agency (CRA) Web site you must file a return for 2010 if any of the following situations apply:
  
  * You have to pay tax for 2010.
  * The CRA has sent you a request to file a return.
  * You and your spouse or common-law partner elected to split pension income for 2010. For more information, see line 115 - Other pensions or superannuation, line 116 - Elected split-pension amount, line 129 - RRSP income and line 210 - Deduction for elected split-pension amount.
  * You received Working Income Tax Benefit (WITB) advance payments in 2010, and you want to apply for WITB advance payments for 2011.
  * You disposed of capital property in 2010 (for example, if you sold real estate or shares) or you realized a taxable capital gain (for example, if a mutual fund or trust attributed amounts to you, or you are reporting a capital gains reserve you claimed on your 2009 return).
  * You have to repay any of your Old Age Security or Employment Insurance benefits. For more information, see line 235 - Social benefits repayment.
  * You have not repaid all amounts withdrawn from your registered retirement savings plan (RRSP) under the Home Buyers' Plan or the Lifelong Learning Plan. For more information, see Guide RC4135 - Home Buyers' Plan (HBP) or Guide RC4112 - Lifelong Learning Plan (LLP).
  * You have to contribute to the Canada Pension Plan (CPP). This can apply if, for 2010, the total of your net self-employment income and pensionable employment income is more than $3,500. See line 222 - Deduction for CPP or QPP contributions on self-employment and other earnings.
  
  Even if none of these requirements apply, you may still want to file a return if any of the following situations apply:
  
  * You want to claim a refund.
  * You want to claim the WITB for 2010.
  * You want to apply for the GST/HST credit (including any related provincial credit). For example, you may be eligible if you turn 19 before April 2012.
  * You or your spouse or common-law partner want to begin or continue receiving Canada Child Tax Benefit payments.
  * You have incurred a non-capital loss (see line 236 - Net Income) in 2010 that you want to be able to apply in other years.
  * You want to carry forward or transfer the unused part of your tuition, education, and textbook amounts (see line 323 - Tuition, education and textbook amounts).
  * You want to report income for which you could contribute to an RRSP in order to keep your RRSP deduction limit for future years up to date.
  * You want to carry forward the unused investment tax credit on expenditures you incurred during the current year (see line 412 - Investment tax credit).
  * You receive the Guaranteed Income Supplement or Allowance benefits under the Old Age Security Program. You can usually renew your benefit simply by filing your return by April 30. If you choose not to file a return, you will have to complete a renewal application form. This form is available from the Service Canada Web site.
  If any of these scenarios apply to you or members of your family be sure to file a tax return:

  
  
• May I claim the federal or provincial disability amount (line 5844) when also claiming fees for full-time care in a nursing home?

  The same rule should apply on federal line 316 and provincial line 5844. That is: the disability tax credit cannot be claimed if you are claiming fees for full-time care in a nursing home.

  To ensure the Disability Credit is not claimed where fees for full-time care in a nursing home are, visit to the Disability section and change option "Claim disability amount" to "Do not claim disability amount" to the question "Are you eligible for the disability amount on line 316".

• How do I enter medical expenses in UFile?

  To enter your medical expenses in UFile, proceed as follows:

  1. In the UFile interview, click Medical and disability.
  2. In the QuikClik navigator on the left, click Medical expenses.
  3. Enter your medical expenses.

  To add to the list of medical expenses, use the "+" symbol at the right to display additional fields.

• Can I use UFile to prepare the return of a deceased taxpayer? If so, how?

  Yes, you can do so by following the steps below from within the file of the deceased person:

  • Interview setup -> Tax return for a deceased person
  • Deceased -> Complete the data entry form.

  Then, in the file of the surviving spouse (if applicable):

  Marital status change -> Change in your marital status in 20YY -> Taxpayer became widowed -> Date of change in your marital status (dd-mm-yyyy) -> Answer other question(s) (if applicable)

• Why must I enter income information for an ex-spouse?
  The amount of net income entered for an ex-spouse is required by the CRA, and is used to calculate the spousal amount or common-law partner amount on line 303 of your return (if applicable). If no amount is entered the return cannot be electronically filed.
  
• What if I do not know the amount of my ex-spouse's income for the year?
  If you do not know the amount of income and wish to NETFILE the return, you will have to estimate an amount that reflects what you do know. Do not enter an income amount for a spouse that is too low; otherwise you may be claiming amounts to which you are not entitled. This could result in delays, interest charges and penalties.
  
• I have federal tax payable but no provincial tax to pay. UFile is carrying forward the donations. How can I have UFile apply the donations to the provincial tax calculation?
  For provinces other than Quebec, UFile's MaxBack Refund Analyzer uses just enough of the available donations to reduce the federal tax liability to 0. Unused donations are carried forward to next year. In some cases, you may want to force the program to claim more of the available donations, in order to reduce the provincial tax liability to 0 as well.
  
  Select Donations/political contributions > Sharing donations between spouses and Optimization of donations, then select Claim specified amount. Enter the amount of donations to claim on this return. This amount must be less than the total amount of available donations entered on pages such as Donations/political contributions > Canadian charitable donations
• How do I claim the 2010 Ontario energy and property tax credit on Form ON479 in UFile?
  - In the QuikClik navigator on the left, click Ontario tax and credits.
  
  - Enter the data pertaining to your principal residence as applicable (home owner, tenant, college residence).
  
  - Enter the amount received in 2010 for the Senior Homeowner Property Tax Grant, when applicable.
  
  Then, fill out the application for the 2010 Ontario energy and property tax credit, as follows:
  
  1. On the right, click ON-BEN – Application for 2010 Ontario Energy and Property Tax Credit and the 2011 Ontario Senior Homeowners' Property Tax Grant, the 2011 Ontario Energy and Property tax Credit, and the 2011 Northern Ontario Energy Credit.
  
  2. Select Claim the 2010 Ontario energy and property tax credit at line Application for the 2010 Ontario energy and property tax credit (ON479).
  
  3. Note that you should apply for the 2011 credits as well by answering the three questions relative to 2011, according to your circumstances.
  
  In the case of a couple this information and the other Ontario credits information should be entered in the Family Head*.
  
  If the spouse wants to claim the credits:
  
  - in the Family Head's section Ontario tax and credits,
  
  - click Assigning Ontario credits to one spouse or the other,
  
  - select Give all to spouse at line Who should receive the Ontario credits?
  
  * Except if on December 31, 2010 the spouse was 65 years of age or older AND the Family Head under 65 years of age. In such cases, instead of in the Family Head, enter information in the spouse's section Ontario tax and credits.
• What if I need to correct my tax return after it has been filed?

  You cannot use NETFILE to change your tax return but you can send a completed form T1 Adjustment Request, or a signed letter to your tax centre requesting an adjustment to your tax return. UFile can help you with this, thanks to our Adjustment Request feature that will help you create a T1-Adjustment form which can be mailed to the CRA. You can make changes to your tax return online once you've received your Notice of Assessment using the CRA's My Account service.

  Regarding a Quebec tax return filed with Revenu Québec, you must fill out Form TP-1.R-V, Request for an adjustment to an income tax return and mail it to Revenu Québec together with documents justifying your request.

• What if I cannot file before the tax deadline?

  If you do not file your tax return on or before the tax filing deadline, the CRA will charge penalties and interest on the amount owing and on the penalty leveled starting on the day after your return is due. For more information and important details on outstanding returns, please see the CRA website.

  If you are expecting a tax refund, there is no penalty to be paid. However, it is always better to claim your tax refund and to apply for any benefits and rebates you are entitled to prior by the end of tax season.

  Keep in mind that the CRA's taxpayer relief provisions are available to assist taxpayers in resolving tax issues that arise due to circumstances beyond their control. Under these provisions, taxpayers can apply to the CRA to have interest and/or penalties waived or cancelled in situations where they are unable to file a tax return and/or make payments on time because of a natural disaster.