For purposes of the federal return, when two taxpayers are married or live common-law, the taxpayer with the higher net income must include the amount of social assistance payments on his or her return, regardless of the name appearing on the slip. The calculation is automatically performed by the program.
However, if the spouses have the same net income, the taxpayer whose name appears on the slip is the one who must include the amount of social assistance payments in his or her income. The calculation is also automatically performed by the program.
Furthermore, the amount of social assistance benefits received before the marriage (or before the date of the common-law union) that is included in the amount shown in box 111 or 112 of the T5007 slip must be entered on the return of the taxpayer who received those benefits to determine the spouse’s net income for the purpose of the spousal amount. The preparer is reminded of this requirement with a diagnostic.
For purposes of the federal return, the information entered in boxes 10 and 11 of the T5007 slip will be updated to the tax return as income on line 14400 or 14500 and as a deduction on line 25000.
For purposes of the Québec return, the income replacement benefits received as a result of a work accident, a precautionary cessation of work or a car accident are entered in the tax return as income on line 148 and as a deduction on line 295.
Social assistance benefits (Québec)
Social assistance benefits are entered on line 147.
For purposes of the Québec return, the beneficiary must always include the amount of assistance received on his or her own return, whether or not he or she has a spouse, and regardless of that spouse’s income.
Note: For purposes of calculating the premium payable under the Québec prescription drug insurance plan (Schedule K), as soon as an amount is entered in box A or B of the RL-5 slip, the program assumes that the taxpayer has received social assistance benefits throughout the year. This way, the program determines the appropriate code to enter in Schedule K. However, if the taxpayer has received social assistance benefits for certain months only, he or she must modify the number of months on the line Number of months for which social assistance benefits were paid of the T5007 slip. Then, the taxpayer must select the appropriate months in Schedule K in order for the calculation of the premium payable under the Québec prescription drug insurance plan to be performed correctly. The preparer is advised of this procedure by a diagnostic.
“Québec” section
The employment earnings supplements included in box B of the RL-5 slip is used only for the calculation of the disability supports deduction in Form TP-358.0.1, Disability Supports Deduction (Jump Code: Q358.0.1).
See Also
Federal Income Tax and Benefit Guide – Lines 14400, 14500 and 25000