9%20-%20Other%20Income%20Other%20Deductions%20and%20Income%20Attribution

9%20-%20Other%20Income%20Other%20Deductions%20and%20Income%20Attribution

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Chapter 9 – Other Income, Other Deductions and Income Attribution
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Other Sources of Income These are items that are considered income but don’t fit into one of the other four categories (employment, business, property, capital gains/losses) They are covered in Subdivision d (sections 56 to 59.1). The following are included: – Pension Benefits – Retiring Allowances – Death Benefits – Deferred Income Plans – Scholarships and Prizes – Research Grants – Social Assistance and Workers Compensation – Universal Child Care Benefit. Other items that are also related to an Other Deduction are discussed later on in the chapter.
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Pension Benefits • Amounts received from Registered Pension Plans (employer pension plans) • Canada Pension Plan (CPP) Payments – Note that the amount received can be shared with a spouse or common law partner. Amount that can be shared is based on the length of time the individuals have been living together relative to the contributory period. – Useful if spouse has a lower tax rate • Old Age Security (OAS) Payments – Watch for Clawbacks (Ch. 4)
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Retiring Allowances • Includes most payments received on the termination of employment – Rewards for good/long service, early retirement payments, damages in wrongful dismissal actions – A portion of amounts received related to service of the employee prior to 1996 can be deducted if they are transferred to either an RPP or an RRSP within 60 days after the end of the year in which they are received.
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Death Benefits • Amounts received by a taxpayer in a taxation year as a result of the death of an employee in recognition of employee’s service in an office or employment • Usually received by a surviving spouse – In these cases, there is an exemption for the first $10,000 received, even if it is received over a number of years, and regardless of who it is paid to – The exemption can be shared with other individuals, but must be used first by the spouse/common law partner. – Does not relate to the CPP death benefit • Could be paid to anyone (not necessarily a relative)
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Income from Deferred Income Plans • The following must be included from deferred income plans. The details of how these plans work is discussed in Chapter 10. – Payments from Registered Retirement Savings Plans (RRSP) – Income inclusions from Home Buyers’ and Lifelong Learning Plans – Payments from Deferred Profit Sharing Plans (DPSP) – Registered Retirement Income Fund (RRIF) withdrawals • For these, there is a minimum withdrawal, and this amount must be included in income, even if it is not withdrawn from the plan
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Scholarships and Prizes Must be included to the extent that they exceed the student’s scholarship exemption: – Exemption = 100% of scholarships and prizes that are received in connection with: • An education program that qualifies for the education tax credit An elementary or secondary school education program. – Not available:
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9%20-%20Other%20Income%20Other%20Deductions%20and%20Income%20Attribution

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