Class Notes (838,387)
Canada (510,873)
York University (35,470)
ADMS 3520 (32)
all (7)

3520-4- updated JF.doc

6 Pages
Unlock Document

Administrative Studies
ADMS 3520
All Professors

3520-4: September 8, 2008 1-6 1 Lecture 4: Other Income and Deductions  The lecture is to highlight parts of CTP chapter 8 and CTP 9 (mainly on RRSP contributions)  The designated problems are:  Moving Expenses: Exercise 8-1, Self-study Problem 8-1  Child Care Expenses: Exercise 8-2, Self-study Problem 8-2  Support Payments: Exercise 8-5  Annuity Payments: Exercise 8-6  CESG: Exercise 8-7  RRSP Contributions - Chapter 9, Exercises 9-1,2, 3 2 Pension Benefits [8-14 to 8-15]  ITA 56(l)(a)(i) = Inclusion section for employer’s registered pension plans (RPP) and government’s Old Age Security (OAS) and Canada Pension Plan (CPP) payments 3 Retiring Allowances [8-16 to 8-18]  ITA 56(l)(a)(ii) = inclusion section for retiring allowances  Retiring allowances = payment(s) by employer for long service or loss of office whether or not ordered by a court judgment [ITA 248(l)]  the eligible portion of retiring allowances can be transferred tax-free to an RRSP based on a formula, i.e. the income inclusion is offset by a special limited registered retirement savings plan (RRSP) deduction (formula covered in ADMS 4561) 4 Death Benefits [8-19 to 8-22]  ITA 56(l)(a)(iii) = inclusion section for death benefits for a dead employee’s surviving spouse or common-law partner as defined in ITA 248(l): 1st $10,000 is tax-free and is not a death benefit 5 Income Inclusions from Deferred Income Plans [8-23 to 8-24]  RRSPs, Deferred Profit Sharing Plans (DPSPs) and Registered Retirement Income Funds (RRIFs) and RPPs are registered plans  They are registered with the federal government  In order to be registered they must meet certain conditions  The advantage of registration is  that contributions into the plan are either tax-free benefits (e.g., employer RPP and DPSP contributions) or tax-deductible individual contributions (e.g. RRSPs, RPPs) or tax-free transfers (RRSPs to RRIFs)  income grows tax-free in the plan Jason Fleming [[email protected]] 3520-4: September 8, 2008 2-6  Payments out of the following plans are included in income when received:  RRSP withdrawals, payments etc are taxable [ITA 56(l)(h)]  DPSP payments [ITA 56(l)(i)]  RRIF payments [ITA 56(l)(t)] 6 Educational Assistance Payments and Research Grants [8-25 to 8-25]  2007 onwards: scholarships and bursaries are fully exempt from tax [ITA 56(1)(n) and 56(3)]  ITA 56(1)(o): research grant net of unreimbursed expenses must be included in income 7 Social Assistance and Workers’ Compensation Payments [8-27 to 8-28]  ITA 56(1)(u) and (v): include in calculation of net income for tax purposes for means testing but deducted in calculation of taxable income as exempt income for policy reasons 8 Universal Child Care Benefit [8-29 to 8-31]  Universal Child Care Benefit Act: $100 a month for each child under the age of 6 (i.e., 5 and under)  ITA 56(6): include in income of lower-income spouse or common-law partner 9 CPP Contributions on Self-employed Earnings [8-32 to 8-35]  ITA 60(e): deduct one-half of all CPP contributions payable on self-employed income  remaining half treated the same as CPP contributions made by employee to be covered later in the course 10 Moving Expenses [8-36 to 8-47]  ITA 62(1): eligible relocation as defined in ITA 248(1)  The move must bring you 40 km. closer to workplace/school and the reason for the move must be to carry on business, to be employed, or to be a full-time student  Can only be deducted against income from the new location. There is a one year carryforward for un-deducted moving expenses  ITA 62(3) on items included: see 8-40  For items not allowed, see 8-41  Simplified method: for 2007 rates see 8-42;  2007 rates – for meals: $17/person/meal = $51/person/day, for car expenses: 49.5 cents/km  for 2008 rates when they are posted (in 2009) see http://www.cra- Jason Fleming [[email protected]] 3520-4: September 8, 2008 3-6  ITA 6 (20): half of any reimbursement > $15,000 to be included as taxable benefit [see examples at 8-44 and 8-47] 11 Child Care Expenses [8-48 to 8-61]  ITA 63: incurred to earn taxable income or receive an education  Terms to know:  Eligible Child = under 16 at some time during the year  Annual Child Care Expense Amount  $10,000 for child of any age eligible for disability tax credit  $7,000 for child under age of 7 at year-end  $4,000 for child aged 7 to 16 or child over 16 infirm but not eligible for disability tax credit  Periodic Child Care Expense Amount per week: 1/40 of annual child care expense amount  Attendance at boarding school or camp: limited to Periodic Child Care Expense per week [i.e., $250 for children eligible for the disability tax credit, i.e., $10,000/40; $175 for children under age 7, i.e., $7,000/40; and $100 for other eligible children, i.e., $4,000/40]  Earned Income: will be provided in this course  Supporting person = spouses living together at any time in the year and at any time within 60 days of the end of the year  No deduction for services beyond child care such as computer lessons or sports fees  Child care expenses can generally only be deducted if both parents (“supporting persons”) work because child care expenses can generally only be claimed by the lower but non-zero income parent  In the case of a single parent family, the single parent must have earned income to claim the deduction  ITA 63(2): child care expenses can be claimed by a higher income spouse (including situations where one spouse is not working)  when the other spouse is  attending a designated educational institution  full time: 10 hours a week for at least 3 weeks  part time: 12 hours a month for at least 3 weeks  mentally or physically impaired for at least 2 weeks, confined to bed or wheelchair or otherwise incapable of looking after the child supported by doctor's certificate  in prison for at least two weeks  is separated from them at the end of the year and for at least 90 days commencing in the year  Note that if the separation taxes pla
More Less

Related notes for ADMS 3520

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.