Step 5 - Non-refundable tax credits

Non-refundable tax credits reduce the amount of income tax you owe. However, if the total of these credits is more than the amount you owe, you will not get a refund for the difference.

The information at lines 300 to 306 explains, in general, how to claim personal amounts.

Newcomers to Canada and emigrants

If you immigrated to Canada or emigrated from Canada in 1996, you may have to reduce your claim for personal amounts (lines 300 to 306). For details, get either the pamphlet called Newcomers to Canada or the pamphlet called Emigrants and Income Tax. Be sure to enter the date of your move in the Identification area (Step 1) on page 1 of your return.

Amounts for non-resident dependants (lines 303 and 306)

You may be able to claim a personal amount for certain dependants who live outside Canada, if they were dependent on you for support. You may be able to make this claim for your spouse (line 303), or for your or your spouse's children and grandchildren who were born in 1978 or earlier and who were mentally or physically infirm (line 306). You cannot claim an amount for any other relatives who lived outside Canada for all of 1996.

If your spouse, or your or your spouse's children or grandchildren already have enough income or assistance for a reasonable standard of living in the country in which they live, we do not consider them to depend on you for support. Also, we do not consider gifts you send them to be support.

How to claim

• Follow the instructions at lines 303 and 306 to calculate your spousal amount, and amounts for infirm dependants age 18 or older.
• Attach proof of your support payments to your return. The proof of payment has to show your name, the amount, the date of the payment, and the dependant's name and address. If you sent the funds to a guardian, the guardian's name and address also have to appear on the proof of payment.

Line 300 - Basic personal amount

Claim the basic personal amount of $6,456.

Line 301 - Age amount

If you were 65 or older on December 31, 1996, and your net income (line 236 of your return) is:

• $25,921 or less, enter $3,482 on line 301;
• more than $25,921 but less than $49,134, use the chart that follows to calculate your claim; or
• $49,134 or more, you cannot claim an amount on line 301.

Date of birth - Be sure to enter your date of birth in the Identification area (Step 1) on page 1 of your return.

Tax Tip
If you do not need all of your age amount to reduce your federal income tax to zero, you can transfer any unused amount to your spouse. See line 326 for details.

You may be able to claim all or part of your spouse's age amount. See line 326 for details.

Line 303 - Spousal amount

If you supported your spouse (as defined on page 8) in 1996, you may be able to claim a spousal amount. If your spouse's net income (see the next section) is:

• $538 or less, claim $5,380;
• more than $538, but less than $5,918, complete the calculation on line 303 of your return; or
• $5,918 or more, you cannot claim a spousal amount.

Net income of spouse

This is the amount from line 236 of your spouse's return, or the amount it would be if your spouse completed a return.

• If you were living with your spouse on December 31, 1996, you have to use your spouse's net income for the whole year. This applies even if you got married in 1996, or if you separated and got back together in 1996.
• If you separated in 1996 because of a breakdown in your relationship, and were not back together on December 31, 1996, you only have to reduce your claim by your spouse's net income before the separation. For a common-law spouse, you also have to be separated for at least 90 days.
• If you also made alimony or maintenance payments to your spouse or former spouse, get the pamphlet called Alimony or Maintenance. It contains the information you will need to prepare your return correctly.

Tax Tip
If you cannot claim the spousal amount (or you have to reduce your claim) because of dividends your spouse received from taxable Canadian corporations, you may be able to reduce your tax if you report all of your spouse's dividends. See line 120 for details.

Line 305 - Equivalent-to-spouse amount

You may be able to claim all or part of the $5,380 equivalent-to-spouse amount if, at any time in the year, you were single, divorced, separated, or widowed and, at that time, you supported a dependant who was:

• under 18, your parent or grandparent, or mentally or physically infirm;
• related to you by blood, marriage, or adoption;
• living with you in a home that you maintained; and
• living in Canada. If the dependant is your child, the child does not have to live in Canada, but must still live with you. This would be possible, for example, if you were a deemed resident (see page 5) living in another country with your child.

Your dependant may live away from home while attending school. In that case, we consider that dependant to live with you for the purposes of this credit if the dependant lived with you when not in school.

You cannot claim an equivalent-to-spouse amount:

• If you are claiming a spousal amount (see line 303).
• If you had a spouse, as defined on page 8, throughout 1996. If you were separated but you reconciled during 1996, for the purposes of this claim, we consider you to have had a spouse throughout 1996.
• For your common-law spouse. However, you may be able to claim the spousal amount on line 303.
• If someone else in your household is making this claim. Each household is allowed only one claim for the equivalent-to-spouse amount.
• For a child for whom you are able to deduct support payments. However, if you separated in 1996, due to a breakdown in your relationship, some special rules apply. For details, get the pamphlet called Alimony or Maintenance.

How to claim

• Calculate your dependant's net income. Net income is the amount from line 236 of your dependant's return, or the amount it would be if your dependant completed a return.
• Complete Schedule 5 to calculate your claim, and attach it to your return.

Note
You cannot split this amount with another person. Once you claim this amount for a dependant:

• no one else can claim this amount or an amount on line 306, "Amounts for infirm dependants age 18 or older," for that dependant; and

• under proposed changes, if the dependant is infirm and age 18 or older, you may also be able to claim an amount on line 306 for that dependant.

Line 306 - Amounts for infirm dependants age 18 or older

You can claim an amount for your or your spouse's dependent child or grandchild only if that child or grandchild was mentally or physically infirm and was born in 1978 or earlier.

You can also claim an amount for a person who meets all of the following conditions. The person must have been:

• your or your spouse's parent, grandparent, brother, sister, aunt, uncle, niece, or nephew;
• born in 1978 or earlier;
• mentally or physically infirm;
• dependent on you, or on you and others; and
• resident in Canada at any time in the year.

If someone else is claiming an amount on line 305 for the same dependant, you cannot claim an amount on line 306 for that dependant.

Under proposed changes, if you are claiming an amount on line 305 for a dependant who is infirm and age 18 or older, you may also be able to claim an amount on line 306 for that dependant. To determine the amount you can claim, first subtract the dependant's net income from $6,456. From either the result or $2,353 (whichever is less) subtract the amount you are claiming on line 305, and claim the excess (if any) on line 306.

If you can deduct support payments you made for your child, you cannot claim an amount on line 306 for that child. However, if you can deduct such payments for that child, and you separated in 1996, due to a breakdown in your relationship, some special rules apply. For details, get the pamphlet called Alimony or Maintenance.

Note
A parent includes someone on whom you were completely dependent and who had custody and control of you when you were under 19 years of age.

How to claim

• Calculate the net income of each of your dependants. Net income is the amount from line 236 of your dependant's return, or the amount it would be if your dependant completed a return. When completing Schedule 6, subtract the dependant's net income on line 2. Line 3 cannot be more than $2,353.

• Under proposed changes, if you are claiming an amount on line 305 for this dependant, subtract that claim on line 4 of Schedule 6.

• Attach Schedule 6 to your return. You should also have a signed statement from a doctor that gives the nature, commencement, and duration of the dependant's infirmity. Keep the signed statement in case we ask to see it.

Under proposed changes, starting for 1996, the maximum amount you can claim is $2,353. In addition, the dependant's net income can now be up to $4,103, without reducing the amount of your claim.

Claims made by more than one person - If you and another person support the same dependant, you can split the claim for that dependant. However, the combined claim that you and the other person make cannot be more than the maximum amount allowed for that dependant.

Tax Tip
If your dependant qualifies for the disability amount, you may be able to claim all or part of that amount. See line 318 for details.

Line 308 - Canada or Quebec Pension Plan contributions through employment

Enter the total of the amounts, in dollars and cents, shown in boxes 16 and 17 of your T4 or T4 Short slips. Do not enter more than $893.20.

If you contributed more than $893.20, enter the excess amount on line 448 of your return. We will refund the excess amount to you, or use it to reduce your balance owing. However, if you are a resident of Quebec, you claim the excess amount on your Quebec provincial return.

In some cases, you may have an overpayment, even if you contributed less than $893.20. For example, in 1996, you may have turned 18 or 70, or received a Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) retirement or disability pension. If so, we will prorate your contributions, calculate your overpayment, and show it on your Notice of Assessment. If you would like to calculate your CPP overpayment, get Form T2204, Calculation of Employee Overpayment of 1996 Canada Pension Plan Contributions and 1996 Employment Insurance Premiums.

Employment in Quebec - If you contributed to the QPP in 1996 but lived outside Quebec on December 31, 1996, treat the amount as if you contributed it to the CPP.

Tax-exempt employment income earned by a registered Indian - If you are a registered Indian with tax-exempt employment income, and there is no amount shown in box 16 of your T4 or T4 Short slip, you may be able to contribute to the CPP on this income. See the next section for details.

Making additional CPP contributions

You may not have contributed to the CPP for certain income you earned through employment, or you may have contributed less than you were allowed. This can happen if:

• you had more than one employer in 1996;
• you had income, such as tips, from which your employer did not have to withhold contributions; or
• you were in a type of employment that was not covered under CPP rules, such as casual employment.

To make more CPP contributions for 1996, get Form CPT20, Election to Pay Canada Pension Plan Contributions. Attach a completed copy to your return, or send Form CPT20 to us separately before May 1, 1998. This form lists the eligible employment income on which you can make more CPP contributions. If you have not contributed the maximum of $893.20, you can contribute 5.6% on any part of the income on which you have not already made contributions. The 1996 income limit for which you can contribute to the CPP is $35,400. Making additional contributions may increase the pension you receive later.

Complete Schedule 8 to calculate your additional CPP contributions. Include them on lines 310 and 421.

Making optional QPP contributions

Include on line 310 any optional QPP contributions you made on your Quebec provincial income tax return, if you filed one. Also, attach a completed Schedule 8 to show how you calculated the amount.

Line 310 - Canada or Quebec Pension Plan contributions payable on self-employment and other earnings

You can claim an amount for the Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) contributions that you have to make on self-employment earnings and on limited or non-active partnership income.

If you were a member of a partnership, make sure you include only your share of the net profit or loss.

If you have both wages and self-employment earnings, the amount of CPP or QPP contributions that you have to make on your self-employment earnings will depend on how much you have already contributed to the CPP or QPP as an employee. You cannot use your net business losses to reduce the CPP or QPP contributions that you paid on your employment earnings.

How to calculate your contributions

Complete Schedule 8 to calculate your CPP or QPP contributions payable, and attach it to your return.

If you were not a resident of Quebec, use the amounts from lines 135 to 143 and line 122 of your return. Enter on line 310 and line 421 the required contributions in dollars and cents.

If you were a resident of Quebec, use the amounts from line 134, lines 156 to 160, and line 173 of your Quebec provincial return. Enter on line 310 the amount of the contributions in dollars and cents.

Note
In 1996, you may have turned 18 or 70, or received a CPP or QPP retirement or disability pension. If so, we will prorate your CPP or QPP contributions. We will calculate the correct amount and show it on your Notice of Assessment.

Line 312 - Employment Insurance premiums

Enter the total, in dollars and cents, of the amounts shown in box 18 of all your T4, T4 Short, and T4F slips, up to the following limits:

• $1,150.76 for 52 weekly pay periods, based on insurable earnings of up to $39,000;
• $1,172.89 for 53 weekly pay periods, based on insurable earnings of up to $39,750; or
• $1,194.75 for 27 bi-weekly pay periods, based on insurable earnings of up to $40,500.

Your insurable earnings are shown in box 24 of your T4 or T4 Short slip (or box 14, if box 24 is blank) or box 16 of your T4F slip. If you contributed more than the limit that applies to you, enter the excess amount on line 450. We will refund this excess amount to you or use it to reduce your balance owing.

In some cases, you may have overpaid your Employment Insurance premiums even if you contributed less than the maximum. If so, we will calculate your overpayment and show it on your Notice of Assessment. If you would like to calculate your overpayment, get Form T2204, Calculation of Employee Overpayment of 1996 Canada Pension Plan Contributions and 1996 Employment Insurance Premiums.

Line 314 - Pension income amount

You may be able to claim up to $1,000, if you reported pension or annuity income on line 115 or line 129 of your return. Therefore, make sure you have reported your pension or annuity income on the correct lines of your return.

Use the following chart to calculate your claim.

Note
Only pension or annuity income you report on lines 115 or 129 qualifies for the pension income amount. Therefore, amounts such as Old Age Security benefits, Canada Pension Plan benefits, Quebec Pension Plan benefits, Saskatchewan Pension Plan payments, death benefits, and retiring allowances do not qualify.

Tax Tip
If you do not need all of your pension income amount to reduce your federal income tax to zero, you can transfer any unused amount to your spouse.

You may be able to claim all or part of your spouse's pension income amount. See line 326 for details.

Line 316 - Disability amount

You may be able to claim a disability amount of $4,233 if your doctor or optometrist certifies that:

• you had a severe mental or physical impairment in 1996, which caused you to be markedly restricted in any of the basic activities of daily living; and
• your impairment was prolonged, which means it has lasted, or is expected to last, for a continuous period of at least 12 months.

You may be markedly restricted in a basic activity of daily living if:

• you are blind; or
• you are unable to feed and dress yourself, control bowel and bladder functions, walk, speak, hear, or perceive, think, and remember. You may also be markedly restricted if it takes you an extremely long time to perform any of these activities, even with therapy and the use of appropriate aids and medication.

To qualify for the disability amount, your ability to perform an activity of daily living has to be markedly restricted all or almost all of the time. If you are markedly restricted occasionally or part of the time, you are not entitled to this tax credit.

Note
If you receive a disability benefit, it does not necessarily mean that you are eligible to claim this credit.

If you or anyone else claims medical expenses (line 330) for a full- or part-time attendant for which the total paid is more than $5,000 ($10,000 in the year of death) or for care in a nursing home because of your mental or physical impairment, you cannot claim the disability amount. You can claim your expenses or the disability amount, whichever you prefer, but not both.

Tax Tip
If you meet certain conditions, you can claim both the disability amount (line 316), and either expenses for attendant care that allowed you to earn income (line 215), or expenses for full- or part-time attendant care provided in Canada for which the total paid is not more than $5,000 ($10,000 in the year of death) as a medical expense (line 330). See the explanations at these lines for details.

How to claim

• If you are making a new application for this amount, you have to submit a properly completed and certified Form T2201, Disability Tax Credit Certificate.
• If you were allowed the disability amount in 1995 and you still met the eligibility requirements in 1996, you can claim the disability amount in 1996 without sending us another Form T2201. However, you have to send us one if the period stated on the certificate ended before 1996.

We will accept a photocopy of your Form T2201 only if your doctor's or optometrist's signature is an original, not a photocopy. For more information, get a copy of the pamphlet called Tax Information for People with Disabilities. The pamphlet also contains Form T2201.

If you are making a new application for this amount, we will now review your claim before we assess your return to determine whether you are eligible. Once approved, you will be able to claim this amount, as long as your circumstances do not change.

Tax Tip
If you do not need all of your disability amount to reduce your federal income tax to zero, you can transfer any unused amount to your spouse (see line 326) or another supporting person (see line 318).

You may be able to claim all or part of your spouse's (see line 326) or other dependant's (see line 318) disability amount.

Line 318 - Disability amount transferred from a dependant other than your spouse

If you have a dependant who can claim the disability amount (see line 316) you may be able to claim all or part of this amount. You can claim the unused part of the disability amount for your dependant who lived in Canada at any time in 1996 if:

• you claimed an equivalent-to-spouse amount on line 305 for that dependant;
• the dependant was your or your spouse's child, grandchild, parent, or grandparent, and you could have claimed an equivalent-to-spouse amount on line 305 for that dependant if you did not have a spouse and if the dependant did not have any income;
• the dependant was your or your spouse's child or grandchild, and you made a claim on line 306, "Amounts for infirm dependants age 18 or older," for that dependant;
• the dependant was your or your spouse's child or grandchild, and you could have made a claim on line 306, "Amounts for infirm dependants age 18 or older," for that dependant if he or she had no income and had been 18 years of age or older in 1996; or
• the dependant was your or your spouse's parent or grandparent, and you could have made a claim on line 306, "Amounts for infirm dependants age 18 or older," for that dependant if he or she had no income. In addition, the individual must have been dependent on you because of his or her mental or physical infirmity.

If you can deduct support payments you made for your child, you cannot claim a disability amount for your child. However, if this is the first year you can deduct such payments for that child, some special rules apply. For details, get the pamphlet called Alimony or Maintenance.

If you or anyone else claims medical expenses for a full- or part-time attendant for which the total paid is more than $5,000 ($10,000 in the year of death) or for care in a nursing home because of your dependant's mental or physical impairment, you cannot claim the disability amount. You can claim the expenses or the disability amount, whichever you prefer, but not both. However, you may be able to claim both the disability amount and medical expenses for full- or part-time attendant care provided in Canada that are not more than $5,000 ($10,000 in the year of death). See line 330 for details.

How to claim

• Use the chart in this section to calculate how much of each dependant's disability amount you can claim.
• Attach to your return a properly completed and certified Form T2201, Disability Tax Credit Certificate, for each dependant. If you were allowed a disability amount in a previous taxation year and the dependant still met the eligibility requirements in 1996, you can claim the disability amount in 1996 without sending us another Form T2201. However, you have to send us a new one if the period stated on the certificate ended before 1996. If you are not attaching Form T2201 for a dependant, attach a note stating the dependant's name, social insurance number, and relationship to you.

If more than one person is making a claim for the same dependant, attach a note to your return including the name and social insurance number of anyone else making a claim. The total claimed for that dependant cannot be more than the amount on line 5 or $4,233, whichever is less.

You can claim this credit only if the spouse of the person with a disability is not already claiming the disability tax credit or any other non-refundable tax credit (other than medical expenses) for the person with a disability, and you supported that person.

Line 320 - Tuition fees

You can claim, on your 1996 return, the tuition fees paid for courses you took from January 1 to December 31, 1996. You cannot claim other expenses, such as books, or board and lodging.

To qualify, the total tuition fees you paid for the year to any one educational institution had to be more than $100. You can claim tuition fees paid to:

• a university, college, or other educational institution in Canada, if they were for a course at the post-secondary school level;
• an institution certified by the Minister of Human Resources Development, if you were 16 or older on December 31, 1996, and the fees were for a course that developed or improved your skills in an occupation;
• a university outside Canada, if you were enrolled full-time in a course that was at least 13 consecutive weeks long and that would lead to a degree; or
• a university, college, or other educational institution in the United States that gives courses at a post-secondary school level, if you lived near the border in Canada throughout the year and commuted to the school.

If your employer or your parent's employer paid your tuition fees, you can only claim them if the amount paid is included in your income or your parent's income. If your tuition fees are paid by a federal or provincial job training program, and no related amount is included in your income, the fees do not qualify for this credit.

Under proposed changes, if your fees are paid (or you are entitled to be reimbursed for them) under a federal program to assist athletes, you cannot claim the fees unless the payment or reimbursement has been included in your income.

How to claim

• If you are claiming tuition fees paid to an institution in Canada, you must have either an official tax receipt or Form T2202A.
• If you are claiming tuition fees paid to an educational institution outside Canada, you must have your educational institution complete Form TL11A (for a university outside Canada) or Form TL11C (for commuters to the U.S.).
• If you are claiming tuition fees paid to a flying school or club in Canada, you must have your school or club complete Form TL11B.

You can get these forms from us. You can also get Form TL11B from your flying school or club.

Receipts - Do not include your receipts or forms with your paper return. If you are using EFILE (see "Filing your return" on page 6) show them to your EFILE service provider. In either case, you have to keep them in case we ask to see them.

Tax Tip
You have to claim your tuition fees first, even if someone else paid them. If you do not need all of your tuition fees to reduce your federal income tax to zero, you can transfer any unused amount to your spouse (see line 326) or another supporting person (see line 324).

You may be able to claim all or part of your spouse's (see line 326) or other dependant's (see line 324) tuition fees.

Line 322 - Education amount

Under proposed changes, you can claim an education amount of $100 for each whole or part month in 1996 that you were enrolled in a qualifying educational program.

In most cases, you have to be enrolled as a full-time student. You must have a Form T2202 or T2202A, completed by your educational institution, that confirms the period you were enrolled in a qualifying program.

Part-time students

If you are enrolled in a qualifying program but can only attend part-time because of a mental or physical impairment, you can claim an education amount. You have to complete Form T2202 to make your claim as a part-time student.

How to claim

• Multiply the number of months shown on your Form T2202 or T2202A (maximum 12) by $100.
• Enter your claim on line 322 of your return.

You cannot claim the education amount for a program if you:

• received an allowance for that program (such as a training allowance under the Employment Insurance Act, Unemployment Insurance Act, or National Training Act);
• received a benefit for that program (such as free board and lodging from a nursing school);
• received a grant for that program;
• were reimbursed for the cost of your courses, other than by award money you received; or
• were receiving salary or wages while taking a job-related course.

Note
An allowance, benefit, grant, or reimbursement does not include any scholarship, fellowship, bursary, or prize you received, or any benefit you received under the Canada Student Financial Assistance Act, Canada Student Loans Act, or An Act respecting financial assistance for students of the Province of Quebec.

Receipts - Do not include your form with your paper return. If you are using EFILE (see "Filing your return" on page 6) show it to your EFILE service provider. In either case, you have to keep it in case we ask to see it.

Tax Tip
If you do not need all of your education amount to reduce your federal income tax to zero, you may be able to transfer any unused amount to your spouse (see line 326) or another supporting person (see line 324).

You may be able to claim all or part of your spouse's (see line 326) or other dependant's (see line 324) education amount.

Line 324 - Tuition fees and education amount transferred from a child

A student who does not need to claim all of his or her tuition fees (line 320) or education amount (line 322) to reduce his or her federal income tax to zero may be able to transfer the unused part to you if you are the parent or grandparent of that student or of that student's spouse.

Under proposed changes, the limit on the total of the amount transferred has been increased to $5,000 minus the amount the student needs, even if there is still an unused part.

How to claim

The student has to use Form T2202 or the back of copy 2 of Form T2202A to calculate the transfer amount and to designate you as the parent or grandparent. If the tuition fees being transferred to you are not shown on the student's Form T2202 or T2202A, you should attach to it a copy of the student's official tuition fees receipt.

Student with a spouse - If a student's spouse claims the spousal amount (line 303) or the amounts transferred from the spouse (line 326), you cannot claim the tuition fees and education amount transfer. However, the student's spouse can claim the transfer on line 326.

Student claimed as a dependant - A parent or grandparent who claims the student as a dependant on line 305 or 306 is the only person who can claim the tuition fees and education amount transferred from the student.

Student not claimed as a dependant - The student has to choose the parent or grandparent who can claim the tuition fees and education amount transfer. Only one person can claim the transfer from the student.

Receipts - Do not include the forms, or the student's official tuition fees receipt with your paper return. If you are using EFILE (see "Filing your return" on page 6) show them to your EFILE service provider. In either case, you have to keep them in case we ask to see them.

Line 326 - Amounts transferred from your spouse

You can transfer from your spouse (as defined on page 8) any of the following amounts that your spouse qualifies for but does not need to reduce his or her federal income tax to zero:

• the age amount (line 301) if your spouse was 65 or older;
• the pension income amount (line 314);
• the disability amount (line 316); and
• tuition fees (line 320) and the education amount (line 322).

Under proposed changes, the limit on the total of the tuition and education amounts transferred has been increased to $5,000 minus the amount your spouse needs, even if there is still an unused part.

Use Schedule 2 to calculate your claim and attach a completed copy to your return. Be sure to show, in the Identification area on page 1 of your return, your marital status, and your spouse's name and social insurance number.

Receipts - Attach to your paper return your spouse's Form T2201, Disability Tax Credit Certificate. If you were (or your spouse was) allowed a disability amount in a previous taxation year for your spouse's condition, and your spouse still met the eligibility requirements in 1996, you can claim the disability amount without sending us another Form T2201. However, you have to send us a new one if the period stated on the certificate ended before 1996.

Do not include your spouse's receipts or forms for tuition fees or the education amount with your paper return. If you are using EFILE (see "Filing your return" on page 6) show them to your EFILE service provider. In either case, you have to keep them in case we ask to see them.

Note
You cannot transfer any unused amounts from your spouse if you were separated because of a breakdown in your relationship for a period of 90 days or more that included December 31, 1996.

Line 330 - Medical expenses

You can claim medical expenses that were paid for:

• yourself;
• your spouse;
• your or your spouse's children or grandchildren who were dependent on you for support; and
• your or your spouse's parent, grandparent, brother, sister, uncle, aunt, niece, or nephew who lived in Canada at any time in the year and was dependent on you for support.

Note
If you claim medical expenses for a dependant, other than your spouse, whose net income is more than $6,456, see line 331 for more details.

You can claim medical expenses paid in any 12-month period ending in 1996 and not claimed in 1995, even if they were not paid in Canada.

Your total expenses have to be more than either $1,614 or 3% of your net income (line 236) whichever is less.

Tax Tip
It may be better for the spouse with the lower income to claim the allowable medical expenses. Compare your credit with the credit your spouse would be allowed. You can make whichever claim you prefer.

How to claim

Calculate your allowable medical expenses as follows:

• Choose the 12-month period ending in 1996 for which you will claim medical expenses. You cannot include any expenses you deducted on your 1995 return.
• Add up your allowable medical expenses for that period, and enter the total on line 330.
• Subtract $1,614 or 3% of your net income (line 236) whichever is less.

Receipts - Attach your receipts to your return. If you are using EFILE (see "Filing your return" on page 6) show your receipts to your EFILE service provider, and keep them in case we ask to see them.

Allowable medical expenses

The following are some examples of medical expenses you can claim:

• payments to a doctor, dentist, nurse, or public or licensed private hospital;
• payments for artificial limbs, wheelchairs, crutches, hearing aids, prescription eyeglasses or contact lenses, dentures, pacemakers, prescription drugs, and certain prescription medical devices;
• expenses for guide and hearing-ear dogs; and
• most premiums paid to private health services plans. Do not attach to your return the receipts for these premiums, but if you are using EFILE (see "Filing your return" on page 6) show them to your EFILE service provider, and keep them in case we ask to see them.

For more examples of allowable medical expenses, call our T.I.P.S. (Info-Tax) service. See the T.I.P.S. information in the forms booklet.

Travelling expenses - If medical treatment is not available locally, you may be able to claim the cost of travelling to get the treatment somewhere else. Attach to your return your receipts and a statement listing your travelling expenses.

Reimbursement of an allowable medical or dental expense - You cannot claim the part of an expense for which you have been or can be reimbursed. However, you can claim all of the expense if the reimbursement is included in your income, such as a benefit shown on a T4 slip, and you did not deduct the reimbursement anywhere else on your return.

Example
André was in the hospital while on vacation in Mexico. He paid $2,800 in Canadian dollars for allowable medical expenses, which are not limited to those paid in Canada. He was reimbursed for $1,500 of these expenses by his employer's health care plan. This was included on his T4 slip. Therefore, André can claim the full $2,800.

Expenses for an attendant or for full-time care in a nursing home

You may be able to claim either:

• amounts paid for a full-time attendant, provided the expenses were paid to a person who is not your spouse and is 18 years of age or older, or for full-time care in a nursing home (if a doctor has certified by letter or by signing a properly completed Form T2201, Disability Tax Credit Certificate, that the person receiving such care had a severe and prolonged mental or physical impairment in 1996); or
• amounts paid for full- or part-time attendant care provided in Canada, if the total paid is not more than $5,000 ($10,000 in the year of death). You can claim these expenses if the patient can claim the disability amount (line 316), and the expenses were paid to a person 18 years of age or older who is not your spouse. However, if you made a claim for either attendant care expenses (line 215) or child care expenses (line 214) for that patient, you cannot make this claim.

Note
If you or anyone else claims expenses for a full- or part-time attendant that are more than $5,000 ($10,000 in the year of death) or for care in a nursing home, neither you nor anyone else can claim a disability amount (line 316 or 318) for the disabled person. You can claim whichever you prefer, but not both. Compare with line 316 to decide which claim is better.

Tax Tip
If you meet certain conditions, you can claim the disability amount (line 316), and either expenses for attendant care that allowed you to earn income (line 215), or expenses for full- or part-time attendant care provided in Canada for which the total paid is not more than $5,000 ($10,000 in the year of death) as medical expenses (line 330). See the explanations at these lines for details.

For more information on medical expenses, get Interpretation Bulletin IT-519, Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction.

Line 331 - Medical expenses adjustment

If you claimed medical expenses for a dependant (other than your spouse) whose net income was more than $6,456, you have to reduce your medical expenses.

To calculate your adjustment, subtract the basic personal amount ($6,456) from the dependant's net income on line 236 of his or her return, or the amount that it would be if the dependant completed a return. Multiply the result by 4. Complete this calculation for each dependant for whom you claimed medical expenses. Add all the amounts together, and enter the total on line 331 of your return.

Tax Tip
If the medical expenses adjustment you calculate for a dependant is more than the medical expenses you claimed for that dependant, it is not to your benefit to claim the medical expenses for that dependant.

Line 335

You do not have to complete the rest of Step 5 if the amount on line 335 equals, or is more than, the amount on line 260, and is less than $29,591. If so, go to Step 6, enter "0" on lines 406, 417, and 419, and complete the rest of your return.

In any other case, see line 338.

Line 338

To calculate your non-refundable tax credits, multiply the amount on line 335 by 17%. If you are not claiming charitable donations or cultural, ecological, or government gifts, transfer your credits from line 338 to line 350 and go to Step 6.

Line 340 - Charitable donations

Maximum you can claim

You can claim whichever of the following is less:

• the total donations of cash (or other property, get the pamphlet called Gifts and Income Tax for details) made in 1996 plus any donations made in any of the previous five years that you did not claim before; or

• under proposed changes, 50% of your net income (line 236) plus 50% of the amount on line 339 of your return (taxable capital gains included in your income, from capital property you donated in 1996, minus any capital gains deduction you claimed in 1996 on that property).

For the year a person dies and the preceding year, the limit is 100% of the person's net income.

Tax Tip
You can claim donations that your spouse made as long as your spouse does not claim them.

You can claim a federal tax credit of 17% of the first $200 of your donations, and 29% of the balance. A credit for your donations can also reduce your provincial or territorial tax, as well as any federal, provincial, or territorial surtaxes. Quebec residents claim provincial tax credits on their provincial returns.

To qualify, the donations have to be made to:

• Canadian registered charities;
• registered Canadian amateur athletic associations;
• prescribed universities outside Canada;
• Canadian non-profit organizations that only provide low-cost housing for seniors;
• Canadian municipalities;
• registered national arts service organizations;
• the United Nations (or its Specialized Agencies); or
• charities outside Canada to which the Government of Canada has made a donation in 1995 or 1996.

Note
If you are a member of a religious order and you have taken a vow of perpetual poverty, claim your deduction on line 256 of your return.

Receipts - Attach to your paper return official receipts, showing either your name or your spouse's name, your T4, T4 Short, or T4A slips with an amount shown in box 46, your T3 slips with an amount shown in box 36, your T5013 slips with an amount shown in box 34, or financial statements showing an amount a partnership allocated to you. If you are using EFILE (see "Filing your return" on page 6) show your slips, receipts, and statements to your EFILE service provider, and keep them in case we ask to see them.

You may have included with a previous return a receipt for a donation you are claiming for 1996. If so, attach a note indicating with which return you submitted the receipt.

We will not accept as proof of payment cancelled cheques, photocopies (unless the issuer certifies them to be true copies), credit card slips, pledge forms, or stubs.

Donations to U.S. charities

You can claim any donations to U.S. charities that would be allowed on a U.S. return.

Under proposed changes, the limit on the donations you can claim has been increased to 50% of the net U.S. income you report on your Canadian return.

If you lived near the border in Canada throughout the year and commuted to a workplace or business in the U.S. which was your main source of income for the year, you can include your U.S. donations up to the same limits discussed under "Maximum you can claim" on page 32.

Carrying forward donations

You do not have to claim on your 1996 return the charitable donations you made in 1996. You can carry them forward for up to five years, as long as you only claim them once.

If you need more details on charitable donations, get Interpretation Bulletin IT-110, Deductible Gifts and Official Donation Receipts, and its Special Release.

Line 342 - Cultural, ecological, and government gifts

Enter on line 342 the total of the following three amounts:

• your gifts to Canada, a province, or a territory. Attach to your return your receipt for each gift, unless a particular amount is shown on a T5013 slip or is allocated to you by a partnership in its financial statements. You have to report any capital gain or loss on a property, other than a cultural property. See the income tax guide called Capital Gains for details.
• the value of cultural property, certified by the Canadian Cultural Property Export Review Board, that you gave to a designated institution in Canada. Attach to your return both the official receipt and Form T871, Cultural Property Income Tax Certificate, for each gift.
• the value of land you donated, after February 27, 1995, to a Canadian municipality, or a registered charity that the Minister of the Environment has designated. The land must be certified by that Minister to be important to the preservation of Canada's environmental heritage. Attach to your return both the official receipt and the Certificate for Donation of Ecologically Sensitive Land, issued by the Minister of the Environment. You may have to report any capital gain or loss on the property that you donated. For details, see the income tax guide called Capital Gains.

Unlike other donations, your claim for the above three types of gifts is not limited to the percentage specified at line 340. You can choose the part of your donations you want to claim in the year and you can carry forward any unused part for up to five years. For more information, get the pamphlet called Gifts and Income Tax.

Note
You may want to make a monetary gift directly to the federal Debt Servicing and Reduction Account. If so, mail it to the Receiver General at: Place du Portage, Phase 3, 11 Laurier Street, Hull QC K1A 0S5. Include a note asking that we apply your gift to this account. We will send you a tax receipt. All such gifts will only be used to service the public debt.