enfr

News

News > RESOLVED Known issue: AT1 Instalment worksheet may incorrectly suggest that the corporation is exempt from instalment

RESOLVED Known issue: AT1 Instalment worksheet may incorrectly suggest that the corporation is exempt from instalment


On the AlbertaInstalment worksheet, TaxCycle is calculating the exemption from Alberta instalments based on the incorrect year. In the section titled "Exemption rule for instalments," TaxCycle is using amounts from the "immediate preceding year" when the selection is made to use the "current year." It was also using amounts from the "second preceding year" when the selection was made to use the amounts from the "immediate preceding year."

Please also see the Known issue affecting the calculation of the T2 federal instalment payment frequency (monthly vs quarterly).

Background

A corporation is exempt from Alberta instalment payments if certain conditions are met. On the AlbertaInstalment worksheet, these conditions are calculated in the section titled “Exemption rule for instalments:"

2018-at1-instalment-known-issue


This section contains the terms "the year," "current year" and "immediately preceding year." The terms "the year" and "current year" refer to the tax year for which instalments are calculated. For example, if you are working on a return for a calendar tax year 2018, you are calculating the instalments for the following tax year of 2019. Therefore, in this context both "the year" and "current year" refer to 2019. Similarly, the term "immediately preceding year" refers to 2018, the year of the tax return you are working on.

The issue is that TaxCycle calculates the above questions by incorrectly interpreting "the year" and "current year" to be 2018 (rather than 2019). Similarly, TaxCycle calculates the questions by incorrectly interpreting "immediately preceding year" to be 2017 (rather than 2018).

Workaround

For a Canadian Controlled Private Corporation (CCPC):

  • Question 1: Always answer "No" to Question 1. (This question is not applicable as a new corporation does not have to make Alberta instalment payments until it has started its second year of operation; this question will be removed in the next release.)
  • Question 2: Answer the question by interpreting "current year" to be the year for which instalments are calculated. Override the answer as needed.
  • Question 3: Answer the question by interpreting "immediately preceding year" to be the year of the return you are working on.
  • Question 4: Answer the question by interpreting "the year" to be the year for which instalments are calculated, and "first instalment base" to be the instalment base for the year of the return you are working on. Override the answer as needed.

For a non-CCPC:

  • Question 1: Always answer "No" to Question 1. (This question is not applicable as a new corporation does not have to make Alberta instalment payments until it started a second year of operation; this question will be removed in the next release.)
  • Question 2: Answer the question by interpreting "the year" to be the year for which instalments are calculated, and "first instalment base" to be the instalment base for the year of the return you are working on. Override the answer as needed.

Resolution

This issue was resolved in version 7.2.33731.0.


 

Join Our Newsletter

Sign up to get TaxCycle news delivered right to your inbox.