At your service

What if you need help?
Internet access
Contacting us
Hours of service
TTY users
Getting personal tax information
Authorizing your representative
If you move, what should you do?

Before you start

Do you have to file a tax return?
Which tax package should you use?
Where can you get the tax package you need?
Social insurance number (SIN)

Filing your return

What date is your 1996 return due?
What happens if you file your return late?
When will we pay or charge interest?
What do you include with your return and what records do you keep?
What if you are missing information?
How do you report foreign income and other amounts?

After you file

When can you expect your refund?
What happens to your return after we receive it?
How do you change your return?
Can you file a return to claim a refund for a previous year?
What is a voluntary disclosure?
Should you be paying your 1997 taxes by instalments?

At your service

What if you need help?

In this guide, we use plain language to explain the most common tax situations. If you need more help after reading this guide, we have other services available.

You can use our Tax Information Phone Service (T.I.P.S.) Info-Tax service to get recorded information on many tax topics. For more details, see the T.I.P.S. information in the forms booklet.

We have other income tax guides and pamphlets you may find helpful. Some of these contain the related forms you may need. We will send you some of these guides in the mail by late February, depending on the type of income you reported and the deductions or credits you claimed on your 1995 tax return.

We mention the relevant guides or pamphlets for a particular topic in the related line instructions of this guide. We also refer to interpretation bulletins and information circulars that give more details on specific tax topics.

Internet access

If you have access, you can find many of our publications at / on the Internet.

Confidentiality procedures prevent us from providing personal tax information over the Internet. Therefore, you should direct any enquiries to your tax services office.

Contacting us

We want to provide you with the best service possible. You can help us answer your questions more quickly if you have all of your information ready. Before contacting us you should:

• read the appropriate sections of this guide;
• read the appropriate sections of other publications we mention in this guide;
• prepare all the details of your situation and question; and
• have on hand the working copy of your return, any related papers or receipts, a pencil, and some paper.

Being prepared helps us both!

For our address and telephone numbers, see the telephone listings under "Revenue Canada" in the Government of Canada section of your telephone book.

Hours of service

Regular hours - You can call or visit us Monday to Friday, from 8:15 a.m. to 5:00 p.m. (except holidays). For faster service, call or visit us before 10:00 a.m. or after 2:00 p.m.

Evening hours - Evening telephone service is available February 24 through April 30 (Monday to Thursday only) from 5:00 p.m. to 9:00 p.m.

TTY users

If you have a Teletypewriter (TTY) attached to your telephone, you can call our toll-free, bilingual enquiry service at 1-800-665-0354 during regular and evening hours of service.

Getting personal tax information

Your personal tax information is confidential. Therefore, we follow certain procedures before giving personal information to you or your representative, including your spouse. See "Authorizing your representative" below.

In person - If you visit us, we will ask you for one piece of signed identification with your picture. You can also provide two pieces of signed identification and a copy of your Notice of Assessment, Notice of Reassessment, or information about the contents of your return.

If your representative visits us, he or she must show two pieces of identification, and a copy of Form T1013, Consent Form, that you completed.

By phone - If you telephone us, we will ask for your name, address, date of birth, and social insurance number. If you are enquiring about your assessment, we will also ask for information from your return. If you are enquiring about your refund, we will ask the amount of the refund you claimed.

By fax - You can send us correspondence by facsimile. However, because of the nature of facsimile services, we are not responsible for misdirected, incomplete, or illegible documents.

Authorizing your representative

You can authorize a representative, including your spouse, to get information on your tax matters by completing Form T1013, Consent Form. You can get a copy of this form from us.

We will only give information to your representative after we are satisfied that you have authorized us to do so.

If you move, what should you do?

If you move, let us know your new address as soon as possible. This will ensure that you keep getting any goods and services tax (GST) credit or Child Tax Benefit payments to which you may be entitled. If you use direct deposit, and your move has resulted in a change to your account at your financial institution, be sure to advise us of your new account. We also need to know your new address to mail you your tax package for next year.

You can change your address by calling, writing, or visiting us. If you are writing, send your letter to your tax centre. Make sure you sign it, and include your social insurance number, your new address, and the date of your move. If you are writing for other people, include their social insurance numbers, and have each of them sign the letter authorizing the change to his or her records.

Before you start

Do you have to file a tax return?

You have to file a 1996 income tax return if any of the following applies to you:

• You have a balance owing for 1996.
• You want to claim a refund.
• You want to apply for the goods and services tax (GST) credit.
• You or your spouse want to continue receiving Child Tax Benefit payments. If so, each spouse must file a tax return.
• We sent you a request to file a return.
• You sold or disposed of capital property, such as real estate or shares, in 1996.
• You claimed a capital gains reserve on your 1995 return.
• You have to pay back all or part of your Old Age Security or Employment Insurance benefits.
• You have to contribute to the Canada Pension Plan because you earned more than $3,500 in net self-employment income, other pensionable income, or both in 1996. See line 310 for details.

Note
Even if none of these requirements applies, you can still file a return. For example, you may have received income for which you could contribute to your registered retirement savings plan (RRSP). To keep your RRSP deduction limit (see page 18) up to date, you would have to file a return.

Which tax package should you use?

Generally, you have to use the income tax package for the province or territory where you resided on December 31, 1996. To serve you better, the information for your province or territory is now located in the forms booklet.

If you resided in Quebec on December 31, 1996, use the package for residents of Quebec to calculate your federal tax only. You will also need to file a Quebec provincial return.

You may have to consider factors other than where you resided on December 31, 1996, to determine which package you should use:

• If, on December 31, 1996, you were living in a province or territory other than the one you usually reside in, use the package for your usual province or territory of residence. For example, a student who goes to school in Alberta but usually lives in Ontario would use an Ontario package.
• If you are filing a return for a person who died in 1996, use the package for the province or territory where that person lived at the time of death.
• If you emigrated from Canada in 1996, use the package for the province or territory in which you lived on the date you left.
• If, on December 31, 1996, you lived outside Canada, but you maintained residential ties (as defined on this page) with Canada, you may be considered a factual resident of a province or territory. Use the package for the province or territory where you kept your residential ties.
• You may have been a non-resident (as defined below) of Canada on December 31, 1996. If you were a non-resident and you earned income from employment in a province or territory, or received income from a business with a permanent establishment in a province or territory, use the package for that province or territory. Otherwise, use the package for non-residents and deemed residents of Canada.
• You may have been a deemed resident (as defined below) of Canada on December 31, 1996. If you were a deemed resident and you are reporting only Canadian-source income from a business with a permanent establishment in a province or territory, use the package for that province or territory. Otherwise, use the package for non-residents and deemed residents of Canada.

Non-resident - You were a non-resident for tax purposes if you did not have residential ties (as defined below) in Canada, and you temporarily stayed here for less than 183 days during 1996, or you lived outside Canada throughout 1996. Contact us to find out the special rules that apply to you.

Deemed resident - You were a deemed resident for tax purposes if you did not establish residential ties (as defined below) in Canada, but you stayed here for 183 days or more in 1996.

Generally, you were also a deemed resident if you lived outside Canada during 1996, you did not maintain residential ties (as defined below) in Canada, and you were a government employee; a member of the Canadian Forces or their overseas school staff; or working under a CIDA program. This would also apply to your spouse who was living with you in 1996, and your dependent children.

Residential ties - Residential ties include a home in Canada, a spouse or dependants who stayed in Canada while you were living outside Canada, and personal property in Canada. Other ties that may be relevant include social ties in Canada, a Canadian driver's licence, Canadian 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.

Other publications you may need

Unless you resided in Canada all year, you may also need one of the following publications:

• If you were a non-resident or a deemed resident, and you earned income from employment or a business with a permanent establishment in Canada, get the guide called Non-Residents and Temporary Residents of Canada.
• If you were a newcomer to Canada in 1996, get the pamphlet called Newcomers to Canada.
• If you emigrated from Canada during 1996, get the pamphlet called Emigrants and Income Tax.
• If you expect to be outside Canada for an extended period, get the pamphlet called Canadian Residents Abroad.

Where can you get the tax package you need?

You should have received the income tax package that you need based on our records. However, if after reading the above information, you cannot use this package, you can get the one you need from us. You can also get an income tax package for the province or territory where you resided on December 31, 1996, from any postal outlet in that province or territory. You can get the income tax package for non-residents and deemed residents of Canada from Canadian embassies and consulates, or from us.

Social insurance number (SIN)

You have to give your SIN to anyone who prepares a tax information slip (such as a T3, T4, T5, or T600 slip) for you. If you do not give your SIN, you may have to pay a $100 penalty each time you do not provide it.

Check your information slips carefully. If your SIN is not shown on your slip or is incorrect, please advise the slip preparer. If you do not have a SIN, apply for one through any Human Resource Centre of Canada.

Filing your return

You can file a paper return, or you can use the electronic filing system known as "EFILE."

EFILE is a paperless, accurate, and fast way of filing your return. Even if you prepare your own return, you can take it to an EFILE service provider, who will submit it for you electronically.

Whether you are filing a paper return, or you are using EFILE, you should gather everything you will need to complete your return. This includes all the information slips (such as T3, T4, T4A, and T5 slips) you received, as well as receipts for any deductions or credits you plan to claim. As you prepare your return, and you come to a line that applies to you, look it up in this guide or see the back of your information slips.

If you EFILE your return, be sure to take your personal identification label, information slips, receipts, and all other supporting documents to your EFILE service provider. Even if you prepare the diskette yourself, for an EFILE service provider who accepts client-prepared returns, take all of your documents with you.

What date is your 1996 return due?

Generally, your 1996 income tax return is due on or before April 30, 1997. If you are not using EFILE, mail or deliver each return separately, using the envelope included in the forms booklet.

Self-employed persons - If you were carrying on a business in 1996 (unless the expenditures of the business are primarily in connection with a tax shelter), your 1996 income tax return is due on or before June 15, 1997. In addition, if you are the spouse of an individual carrying on such a business, your 1996 income tax return will also be due on or before June 15, 1997. However, if you have a balance owing for 1996, you still have to pay it by April 30, 1997.

Deceased persons - As the legal representative (executor or administrator) of a person's estate, you may have to file a 1996 return for that person or the estate. For more information about your filing requirements, and the dates for filing, payments, penalties, and interest for that return or for that of a surviving spouse (which may be different from those mentioned in this guide) get the income tax guide called Preparing Returns for Deceased Persons, and the T3 Guide and Trust Return.

Note
If you received income in 1996 for a person who died in 1995 or earlier, do not file a 1996 return for that income on behalf of that person. However, you may have to file a return for the estate.

What happens if you file your return late?

If you owe tax for 1996, and do not file your 1996 return by the due date, we will charge you a late-filing penalty. The penalty is 5% of your balance owing for 1996, 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. Even if you cannot pay the full amount you owe by April 30, 1997, you can avoid this penalty by filing your return on time.

We may waive this penalty and any interest if you file your return late because of circumstances beyond your control. If this happens, include a letter with your return giving the reasons why you filed your return late. Information Circular 92-2, Guidelines for the Cancellation and Waiver of Interest and Penalties, gives details on the circumstances.

When will we pay or charge interest?

We will pay you compound daily interest on your 1996 income tax refund, starting on the latest of:

• June 15, 1997;
• the 46th day after you file your return; and
• the date you overpaid your taxes.

If you have a balance owing for 1996, we charge compound daily interest after April 30, 1997, on any unpaid amount owing for 1996. This includes any balance owing if we reassess your return, and any penalty we may charge you.

What do you include with your return and what records do you keep?

Include one copy of each of your information slips when you file your paper return. Your tax return, the guide explanations, the forms, or the schedules will tell you when to attach other supporting documents, such as certificates, forms, schedules, or official receipts. If you EFILE your return, you have to show your EFILE service provider all of your supporting documents.

If you make a claim without the required receipt, certificate, schedule, or form, we may disallow your claim. This could also delay the processing of your return.

Even if you do not have to attach certain receipts to your return, or if you EFILE your return, keep them in case we select your return for review. Generally, you should keep your receipts for six years.

You should also keep a copy of your 1996 return, the related Notice of Assessment, and any Notice of Reassessment. These can help you complete your 1997 return. For example, your Notice of Assessment for 1996 will tell you:

• your 1997 RRSP deduction limit;
• your unclaimed RRSP contributions for 1997; and
• your non-capital loss carry-forward balance.

What if you are missing information?

You should receive most of your information slips by early April. Wait until you get all your receipts and information slips before filing your return.

However, if you have to file a 1996 return, as explained on page 5, be sure to file it by the due date, even if some slips or receipts are missing. Include the income, and attach a note to your return, stating which slips or receipts are missing and what you are doing to get them.

Missing information slip - If you have not received an information slip by early April, contact the issuer. However, you may not receive a T5 slip for an amount under $50.

Even if you do not have an information slip, you still have to report the income when you file your return. For example, if you know that you will not be able to get your T4 or T4 Short slip by April 30, use your pay stubs to calculate your income and the amounts your employer has deducted (such as Canada or Quebec Pension Plan contributions, Employment Insurance premiums, union dues, and income tax).

Attach to your return a note explaining the problem and, if possible, attach a photocopy of your pay stubs. The note should also give the payer's name and address, and the amounts you have calculated.

How do you report foreign income and other amounts?

Report foreign income and other amounts (such as foreign taxes and expenses paid) in Canadian dollars. Calculate how much to report by multiplying your foreign income or expense by the exchange rate that was in effect on the day you received the income or paid the expense. If the amount was paid at various times throughout the year, you can contact us to get an average annual rate.

After you file

When can you expect your refund?

We can usually process your return in four to six weeks. If you filed your return on or before April 15, wait four weeks before you call. If you filed your return after April 15, wait six weeks before you call.

To find out about your refund, call our automated T.I.P.S. (Telerefund) service. Telerefund will tell you the status of your 1996 refund. You will find more information about T.I.P.S. in the forms booklet.

What happens to your return after we receive it?

When we receive your return, we usually review it based on the information you provided, and send you a Notice of Assessment based on that review. However, in some cases, we may select your return for a more detailed review before we assess it. Therefore, we may contact you to provide documentation to verify the deductions or credits you claimed. In other cases, after we have assessed your return, we may select your return to verify the income you reported, or the deductions or credits you claimed.

How do you change your return?

If you need to make a change to any return you have sent us, send any supporting documents and one of the following to your tax centre:

• a completed Form T1-ADJ, T1 Adjustment Request, which you can get from us; or
• a signed letter providing all the details, including your social insurance number, address, a telephone number where we can reach you during the day, and the taxation years you want us to adjust.

Do not file another return for the taxation year you want adjusted. Do not send your Form T1-ADJ or letter with your 1996 return. You can ask for a refund for taxation years as far back as 1985. It usually takes eight weeks before we mail you a Notice of Reassessment.

Note
If you did not provide supporting documentation for your original claim, you have to submit this documentation for both your original claim and the changes you want to make.

Can you file a return to claim a refund for a previous year?

If you have not already filed one, you can file a return to claim a refund for the 1985 taxation year or any year after that. If you are filing a return for a year before 1996, make sure you attach receipts for all the deductions or credits you are claiming.

What is a voluntary disclosure?

If you have never filed an income tax return, stopped filing a return for two or more years, or sent us a return that was incomplete, we encourage you to voluntarily file or correct your return. We will then assess or reassess your return without applying a penalty. You will only have to pay the tax you owe, with interest. For more information, get Information Circular 85-1, Voluntary Disclosures, from us.

Should you be paying your 1997 taxes by instalments?

Estimate your tax payable (line 435 of your return) excluding Canada Pension Plan contributions payable (line 421 of your return) for 1997. If your tax payable will be more than the total of your income tax deducted at source and your refundable tax credits by more than $2,000 ($1,200 if you resided in Quebec) and this situation also applied for either of 1996 or 1995, you may have to pay your 1997 taxes by instalments. If our records show that you should pay your taxes by instalments, we will send you an advance Instalment Reminder suggesting the amount you should pay and telling you the date the payment is due.

For more information about instalment payments, or instalment interest charges, get the pamphlet called Paying Your Income Tax by Instalments. If you would like to calculate your instalment payments, get Form T1033-WS, Worksheet for Calculating 1997 Instalment Payments.