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News > Why are non-refundable tax credits showing on Schedule 1 and the T1Summary for a non-resident?

Why are non-refundable tax credits showing on Schedule 1 and the T1Summary for a non-resident?


We've had a few questions about the calculation of non-refundable tax credits showing up on page 1 of Schedule 1 and on the T1 Summary when the taxpayer is non-resident.  Here's what's going on.

Example Scenario

In the Residency section of the Info worksheet, you have selected Non-resident for the Province/territory of residence on December 31, 2014 and in the Residency status field:

Non-resident on the Info worksheet

The taxpayer has Income from Canadian sources and Income from sources outside of Canada reported on Schedule A:

Schedule A

What happens on Schedule 1?

On page 1 of the Schedule 1, amounts appear in the lines calculating the Total federal non-refundable tax credits on line 350:

Page 1 of the Schedule 1, line 350

However, on page 2 of the Schedule 1, there is another line 350, when these amounts are set to zero, based on the results of the calculation on Schedule A:

Page 2, line 350, Schedule 1

Ultimately, it is this second line 350 that matters to calculating the Net federal tax. But some preparers have told us they prefer not to see the initial calculation on page 1.

What appears on the T1Summary...

In this situation, you will also see these on the T1Summary:

T1 summary with NRTC showing for a non-resident

I would prefer those amounts not to show, what can I do?

Having these amounts appear on Schedule 1 does not affect the paper-filing of the return with the CRA.

We are taking feedback on how this works from our customers and will address it for the next tax season.

In the meantime, if you prefer than these amounts not to show on the first page of the Schedule 1 and on the T1Summary, you can override the amounts on page 1 of the Schedule 1. 

Press F2 and type 0 in each of the fields leading to the calculation on on line 350. Doing this also removes the amounts from the T1Summary:

Override on Schedule 1

Under what circumstances should I expect to a number to appear on line 350, on page 2 of the Schedule 1?

There are three circumstances in which you should expect to see a number in line 350 on page 2 of the Schedule 1. In the following cases, do not delete the amounts from page 1 of the Schedule 1 as they are part of the information required to file the tax return.

  1. If the taxpayer is a deemed resident.
  2. If the taxpayer is a non-resident NOT electing under Section 217, as explained in the CRA General Guide for Non-Residents.

    You are a non-resident not electing under section 217 – Complete Part A of Schedule B. If the result from line A is 90% or more, you can claim all the non-refundable tax credits that apply to you. Your allowable amount of non-refundable tax credits is the amount on line 350 of your Schedule 1. 

    If the result from line A is less than 90%, you can claim only the non-refundable tax credits on lines 316, 319, 323 (other than the education and textbook amounts), and 349 if they apply to you. Your allowable amount of non-refundable tax credits will be the total of these credits multiplied by the rate on Schedule B. 

    General Guide for Non-Residents

  3. If the taxpayer is a non-resident electing under Section 217, as explained in the CRA General Guide for Non-Residents.

    You are a non-resident electing under section 217 – You can claim all the non-refundable tax credits from Schedule 1 that apply to you. However, your allowable amount of non-refundable tax credits may be limited.

    Complete Part B of Schedule B. If the result from line A is 90% or more, your allowable amount of non-refundable tax credits is the amount on line 350 of your Schedule 1.

    If the result from line A is less than 90%, your allowable amount of non-refundable tax credits is the lesser of a) and b) below:

    a) 15% of the eligible section 217 income, paid or credited to you in 2014. This amount is shown in box 133 of your Schedule C; and

    b) the total federal non-refundable tax credits you would be eligible for if you were resident of Canada for the full year, from line 350 of your Schedule 1, minus 15% of the total of any of the following amounts:

    • volunteer firefighters' amount (line 362);
    • search and rescue volunteers’ amount (line 395;
    • public transit amount (line 364);
    • children's fitness amount (line 365);
    • children's arts amount (line 370);
    • home buyers' amount (line 369);
    • adoption expenses (line 313); and
    • interest paid on your student loans (line 319).

    General Guide for Non-Residents




 

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