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Before you start
Do you have to file a return?
You have to file a return for 2005 if any of the following situations apply:
- You have to pay tax for 2005.
- We sent you a request to file a return.
- You disposed of property in 2005 (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 2004 return).
- You have to repay any of your Old Age Security or Employment Insurance benefits. See line 235 for details.
- You have not repaid all of the amounts you withdrew from your registered retirement savings plan (RRSP) under the Home Buyers' Plan or the Lifelong Learning Plan. For details, 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 2005, the total of your net self-employment income and pensionable employment income is more than $3,500. See line 222 for details.
Even if none of these requirements applies, you still may want to file a return if any of the following situations apply:
- You want to claim a refund.
- You want to apply for the GST/HST credit. For example, you may be eligible if you turn 19 before April 2007.
- You or your spouse or common-law partner wants to begin or continue receiving Canada Child Tax Benefit payments.
- You have incurred a non-capital loss (see line 236) in 2005 that you want to be able to apply in other years.
- You want to carry forward the unused portion of your tuition and education amounts (see line 323).
- 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.
What date is your return for 2005 due?
Generally, your return for 2005 has to be filed on or before April 30, 2006.
Note
If you file your return after April 30, 2006, your GST/HST credit, Canada Child Tax Benefit (including those payments from certain related provincial or territorial programs), and Old Age Security benefit payments may be delayed.
Self-employed persons - If you or your spouse or common-law partner carried on a business in 2005 (other than a business whose expenditures are primarily in connection with a tax shelter), your return for 2005 has to be filed on or before June 15, 2006. However, if you have a balance owing for 2005, you still have to pay it on or before April 30, 2006. For details of how to make your payment, see line 485.
Deceased persons
If you are the legal representative (the executor, administrator, or liquidator) of the estate of an individual who died in 2005, you may have to file a return for 2005 for that individual. Get guide T4011, Preparing Returns for Deceased Persons , for details about your filing requirements and options.
Note
If you received income in 2005 for a person who died in 2004 or earlier, do not file an individual return for 2005 for that income on behalf of that person. However, you may have to file a T3 Trust Income Tax and Information Return for the estate.
Exception to due date of your return
When a due date falls on a Saturday, Sunday, or a holiday recognized by the CRA, we consider your return to be filed on time or your payment to be paid on time if we receive it or it is postmarked on the next business day.
What penalties and interest do we charge?
Penalties
If you owe tax for 2005 and do not file your return for 2005 within the dates we specify under "What date is your return for 2005 due?" in the previous section, we will charge you a late-filing penalty. The penalty is 5% of your 2005 balance owing, plus 1% of your balance owing for each full month that your return is late, to a maximum of 12 months. Your late-filing penalty may be higher if we charged you a late-filing penalty on a return for any of the three previous years.
Tax Tip
Even if you cannot pay the full amount you owe on or before April 30, 2006, you can avoid the late-filing penalty by filing your return on time.
We may waive this penalty (as well as any interest that may apply; see the next section) if you file your return late because of circumstances beyond your control. If this happens, send a letter to us separately giving the reasons why you filed your return late. Only requests relating to tax years ending in any of the 10 calendar years before the year you make the request will be considered. For example, a request made in 2006 must relate to the 1996 or a subsequent tax year to be considered. For details, get Information Circular 92-2, Guidelines for the Cancellation and Waiver of Interest and Penalties .
You may have to pay a penalty for any amounts you fail to report on your return for 2005. If you also failed to report an amount on your return for 2002, 2003, or 2004, you may have to pay another penalty. However, if you tell us about an amount you failed to report, we may waive these penalties. See "What is a voluntary disclosure?".
Interest
If you have a balance owing for 2005, we charge compound daily interest starting May 1, 2006, on any unpaid amounts owing for 2005. This includes any balance owing if we reassess your return. In addition, we will charge you interest on the penalties indicated in the previous section, starting the day after your return is due.
Social insurance number (SIN)
Your social insurance number is the authorized number for income tax purposes under section 237 of the Income Tax Act and is used under certain federal programs. You have to give it to anyone who prepares an information slip (such as a T3, T4, or T5 slip) for you. Each time you do not give it when you are supposed to, you may have to pay a $100 penalty. You also have to give it to us when you ask us for personal tax information. Check your slips. If your SIN is missing or is incorrect, advise the slip preparer.
Your SIN card is not a piece of identification, and it should be kept in a safe place. For more information, or to get an application for a SIN, contact Social Development Canada or visit their Web site at www.sdc.gc.ca. You can also contact Human Resources and Skills Development Canada or visit their Web site at www.hrsdc.gc.ca . You will find the addresses and telephone numbers of their offices on the Web pages mentioned above or in the government section of your telephone book.
Canada Child Tax Benefit (CCTB) and Child Disability Benefit (CDB)
If you are responsible for the care of a child who is under 18, you can apply for the CCTB for that child. To do so, submit a completed Form RC66, Canada Child Tax Benefit Application , along with any other documents required, as soon as possible after the child is born or begins to live with you. This information is also used to apply for payments from related provincial or territorial programs. If you are a permanent resident, temporary resident, or protected person (refugee) as defined in the Immigration and Refugee Protection Act, you should apply as soon as possible after you and your child arrive in Canada.
In addition to the CCTB, you can also receive a CDB if your child meets the criteria for the disability amount and we have approved Form T2201, Disability Tax Credit Certificate , for the child.
Effective July 2005, the maximum annual Child Disability Benefit increased to $2,000 for each child who is eligible for the Disability Tax Credit. Under proposed legislation, certain conditions concerning the Disability Tax Credit will change. See line 316 for details.
The CCTB and CDB are based on the net income (line 236) shown on your return and, if applicable, your spouse or common-law partner's return. Therefore, to qualify for these benefits, you both have to file a return every year, even if there is no income to report.
Once you have applied for these benefits, you have to advise us immediately of any of the following changes (as well as the date it happened or will happen):
- the child is no longer in your care, stops living with you, or dies;
- you move (if we do not have your new address, your payments may stop, whether you receive them by direct deposit or by cheque);
- your marital status changes (but if you separate due to a breakdown in your relationship, wait until you are separated for at least 90 days before submitting Form RC65, Marital Status Change );
- you receive your payments by direct deposit (see Direct deposit) and your banking information changes; or
- your or your spouse or common-law partner's immigration or residency status changes.
Certain changes could create a balance owing if you wait to notify us of any of these changes.
For more information, get pamphlet T4114, Your Canada Child Tax Benefit , or call us at 1-800-387-1193.
Which tax and benefit package should you use?
Generally, you have to use the package for the province or territory where you resided on December 31, 2005. However, there are exceptions (see next section) such as if you had residential ties (see below) in another place. You should have received the package you need based on our records.
If you resided in Quebec on December 31, 2005, use the package for residents of Quebec to calculate your federal tax only. You will also need to file a Quebec provincial return.
Residential ties - These ties include where your home and personal property are, and where your spouse or common-law partner or dependants reside. Other ties that may be relevant include social ties, a driver's licence, bank accounts or credit cards, and provincial or territorial hospitalization insurance. For more details, see Interpretation Bulletin IT-221, Determination of an Individual's Residence Status .
Exceptions
In the following situations, you should use the package indicated:
| A. | If, on December 31, 2005, you had residential ties (see previous section) in more than one province or territory, use the package for the province or territory where you have your most important residential ties. For example, if you usually reside in Ontario, but you were going to school in Alberta or staying in a ski chalet in Quebec, you would use the package for Ontario. |
| B. | If you are filing a return for a person who died in 2005, use the package for the province or territory where that person resided at the time of death. |
| C. | If you emigrated from Canada in 2005, use the package for the province or territory in which you resided on the date you left. Mail your tax return to the International Tax Services Office, 2204 Walkley Road, Ottawa ON K1A 1A8. |
| D. | If you lived outside Canada on December 31, 2005, but maintained significant residential ties (see previous section) with Canada, you may be considered a factu al resident of Canada. Use the package for the province or territory where you kept your residential ties. You also have to complete Form T1248, Information about your residency status , and attach it to your return. Mail your tax return to the International Tax Services Office, 2204 Walkley Road, Ottawa ON K1A 1A8. If, under a tax treaty, you are considered to be a resident of another country, this may not apply. For more information, contact us. |
| E. | Generally, if you did not maintain significant residential ties (see previous section) with Canada, and on December 31, 2005, you lived outside Canada and were a government employee, a member of the Canadian Forces or their overseas school staff, or working under a Canadian International Development Agency program, you may be considered a dee med resident of Canada. Use the package for non-residents and deemed residents of Canada. This also may apply to your dependent children and other family members. |
| F. | If you stayed in Canada for 183 days or more in 2005, you did not establish significant residential ties (see previous section) with Canada, and, under a tax treaty, you were not considered a resident of another country, you will be considered a deemed resident of Canada. Use the package for non-residents and deemed residents of Canada. |
| G. | If, throughout 2005, you did not have significant residential ties (see previous section) with Canada and neither E nor F applies, you may be considered a non-resident of Canada for tax purposes. Use the package for non-residents and deemed residents of Canada. |
| However, if you earned income from employment in a province or territory, or earned income from a business with a permanent establishment in a province or territory, use the package for that province or territory. Also, complete Form T1248, Information about your residency status , and attach it to your return. |
How can you get the tax and benefit package you need?
To find out how to get a General forms book and guide for a particular province or territory, see "Publications". In addition, you can get the package for non-residents and deemed residents of Canada from us or any Canadian embassy, high commission, or consulate.
Other publications you may need
Unless you resided in Canada all year, you also need one or more of the following publications:
- If you were a non-resident and you earned income from employment or a business with a permanent establishment in Canada, get guide T4058, Non-Residents and Income Tax .
- If you were a non-resident and you received rental income from real property in Canada, get guide T4144, Income Tax Guide for Electing Under Section 216 .
- If you were a non-resident and you received certain other kinds of income from Canada (including pensions and annuities), get pamphlet T4145, Electing Under Section 217 of the Income Tax Act .
- If you were a newcomer to Canada in 2005, get pamphlet T4055, Newcomers to Canada .
- If you emigrated from Canada during 2005, get guide T4056, Emigrants and Income Tax .
- If you will be outside Canada for an extended period, get pamphlet T4131, Canadian Residents Abroad .
For more information, please contact the International Tax Services Office at 1‑800‑267‑5177. If you are calling from outside Canada and the United States, call (613) 952-3741.
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