TaxCycle version 8.1.34765.0—Accelerated CCA and TOSI
This major T1/TP1 release updates the accelerated CCA calculations, finalizes the 2018 income and business statements, and updates the T1206 calculations for the new rules for tax on split income (TOSI). It also adds a preview of Québec TP-600 partnership returns and RL-15 slips to TaxCycle T5013.
Get this version as an automatic update, a full download from our website or a free trial. (To deploy auto-update files from your network, see the Auto-update files page.)
Did you install versions 8.1.34743.0 or 8.1.34753.0?
On February 28, 2019, we released version 8.1.34743.0 with all the enhancements listed below.
On March 1, 2019, we released an update, (version 8.1.34753.0), to resolve an issue for linked files between TaxCycle and DoxCycle. In addition, the T657 was updated.
On March 4, 2019, we released the automatic update, (version 8.1.34765.0) that also included updated exchange rates in the TaxCycle T3 module.
Please install the latest version of TaxCycle to receive all of these changes.
Accelerated CCA calculations for T1/TP1
This release updates the capital cost allowance (CCA) calculations in TaxCycle T1/TP1 to support the new CCA measures. You will notice the changes to the calculations on all the asset manager worksheets in TaxCycle T1/TP1 (such as T2125Asset, etc.), the motor vehicle worksheet and the T777WS worksheet for employment expenses.
New fields on the asset manager, motor vehicle worksheet and T77WS calculate the accelerated CCA and explain the applicable rules. To learn how Accelerated CCA is calculated for the affected classes, please read the Accelerated CCA help topic, specifically the topics on:
Final T1/TP1 forms
The following 2018 forms are final as of this release:
- Income statements: T776, T2125, T2121, T2042, T1163 and T1273
- T777 employment expenses form and worksheet
- CCA forms and asset managers, including the motor vehicle worksheet
- Québec TP-80 and TP-128
- T657 Calculation of Capital Gains Deduction for Canada (The CRA added notes to sections 3a and 3f. We added a table below each note for entering the amounts required for the calculation, if applicable.)
- T1206 Tax on Split Income (TOSI) (See below)
- T2038 Investment Tax Credit (Individuals)
- TP-232.1 Business Investment Loss
- TP-729 Carry-Forward of Net Capital Losses
- TP-752.HA Home Buyers' Tax Credit
- New! TP-1029.SA Senior Assistance Tax Credit
- MR-69 Authorization to Communicate Information or Power of Attorney (This major update adds a new bar code on page 3 to aid in processing the form when it is mailed to Revenu Québec.)
In-progress T1/TP1 forms
The following 2018 forms are still in progress and will show a Preview watermark:
- TP-726.7 Capital Gains Deduction on Qualified Property
- TP-1029.8.33.6 Tax Credit for an On-the-job Training Period
T1206 Tax on Split Income (TOSI)
This release of TaxCycle T1/TP1 includes the much-anticipated updates to the T1206 Tax on Split Income (TOSI) form. This form has grown in length, including several pages of detailed instructions to help you determine whether TOSI applies to your clients.
Changes to TOSI rules and calculations
Previously, the T1206 was applicable for children under 18. Those rules:
- gave a deduction at line 232 for the split income;
- calculated a tax on split income that was added to regular tax as determined on Schedule 1, and;
- possibly replaced the provincial tax owing amount at line 428 of the T1 jacket.
The new TOSI rules can apply to a person of any age.
Updated T1206 form
To better understand how the new TOSI calculations affect your client(s), please review the instructions pages on the T1206 which include extensive definitions of “split income” and several of the terms used in its definition.
New this year is that the federal and provincial disability claims for self and dependants now provide a credit which reduces the tax on split income.
Also, the split income is added back as income for the purpose of calculating various amounts and credits:
- The note under Part 1 TOSI-adjusted net income lists the amounts and credits related to the taxpayer, including everything from the age amount to the British Columbia sales tax credit. The exception are:
- The age amount for Newfoundland and Labrador and Nova Scotia.
- Nova Scotia low income tax reduction.
- Income based credits on MB479, MB428A, NT479 and NU479.
- Page 3 of the instructions lists all the amounts related to spouses and dependants that must use their adjusted net income in their calculation.
- Page 4 of the instructions indicates how the taxable income used in the calculation of the amount to claim or transfer on all Schedule 11s (except Ontario) and Schedule 2s, as well as the disability amount transfer from a dependant, must be adjusted for the grossed-up value of the federal and provincial TOSI, as applicable for each party involved (taxpayer, spouse or dependant).
To support the TOSI calculations in TaxCycle, we have made the following changes:
- On the T3, T5 and T5013 data entry slips, two new fields allow you to enter the dividends subject to tax on split income. Entering amounts in these fields triggers the completion of the T1206.
- In the space between the Part 2 and Part 3 calculations on the T1206, a new Detail of split income section shows the breakdown of the calculation that feeds into the three lines in Part 1 that report the split income.
- The fields in Part 1 are now calculated fields. If you previously entered amounts in these fields, they will be retained as overrides in this new version.
- To handle the disability amount and tuition transfers from a dependant, the field Taxable income (T1 line 260) was added at the top of the Dependant worksheet. The related line in each of the disability amount and tuition transfer sections then calculates and displays the adjusted federal taxable income. Note that the equivalent provincial taxable income field on that form is based off the federal value. If prior to this version you had already entered the dependant's taxable income in the sections on the tuition or disability amount transfer section on this worksheet, that amount is moved as an override to new field at the top of the worksheet.
Preview! TP-600/RL-15 Québec partnership returns and slips
This release adds a preview version of the 2018 Québec TP-600 Partnership Information Return and RL-15 slips to TaxCycle T5013. If you begin data entry or try out the forms, please let us know if you see any issues or have suggestions.
- The TP-600 form set includes: the TP-600 jacket; schedules A, B, D, E and F; RL-15 slip.
- You can carry forward TP-600 and RL-15 information from ProFile®, Taxprep® and Cantax®.
- The TP-600 jacket and schedules are authorized by Revenu Québec for paper filing.
- The RL-15 slip is certified for electronic filing by Revenu Québec and authorized for paper filing less than 50 slips.
Enhancements to existing forms
- The S8Asset worksheet now handles capital cost allowance (CCA) for Québec (accelerated CCA calculations are coming in a subsequent release)
- The Rental worksheet now includes allocations for the RL-15 and Limited Partner amounts. Amounts transfer automatically from the Rental worksheet to the S1 worksheet (S1WS) and Schedule F worksheet (TPFWS) for all partner amounts.
- The calculation of net income on the Rental worksheet now includes carrying charges for the purpose of calculating the maximum CCA where subsection 1100(11) applies.
- The RentalSummary now includes TP-600 / RL-15 rental information.
New and added forms
- Schedule F worksheet (TPFWS) that handles allocation of net income to all partners for Québec
- CO-771.R.3 Breakdown of Business Carried On in Québec and Elsewhere
- RL-15 Slips summary of key amounts for each partner
- 5-year comparative summary for TP-600 Schedule F (5YearComp SF)
- MR-69 Authorization to Communicate Information or Power of Attorney for paper filing (still awaiting authorization by Revenu Quebec)
Coming in a subsequent release
- Improved handling of Limited Partner amounts
- Accelerated CCA calculations for federal and Québec
- SlipSync of RL-15 values to T1 returns
- TP-600/RL-15 information in the Client Letter
RC59/RC59X in TaxCycle T3010
The following form updates/additions have been made to TaxCycle T3010:
- RC59 Business Consent for Offline Access
- New! RC59X Cancel Business Consent or Delegated Authority
Corrections to CO-17 calculations of Québec CCA classes 50, 14, 14.1 and 44 for additions after Nov. 20, 2018 and before Dec. 4, 2018
The CCA calculations in TaxCycle T2 have been updated to handle the special cases for classes 50, 14, 14.1 and 44 for additions made after Nov. 20, 2018 and before Dec. 4, 2018. This resolves the related known issue. (To learn how Accelerated CCA is calculated in TaxCycle, please read the Accelerated CCA help topic.)
Québec class 50
Previously, for Québec class 50, TaxCycle did not correctly calculate the accelerated CCA for capital asset additions during the period after November 20, 2018 and before December 4, 2018. For asset additions made after December 3, 2018, TaxCycle calculated the accelerated CCA by suspending the half-year rule and grossing up the UCC by the result of the amount calculated as 9/11 multiplied by the net addition.
For additions made after November 20, 2018 and before December 4, 2018, Québec requires that the federal accelerated CCA rule be applied. This suspends the half-year rule and grosses up the UCC by an amount calculated as 50% of the net addition.
Additions made after December 3, 2018 remain eligible for the Québec accelerated CCA. This suspends the half-year rule and grosses up the UCC by an amount calculated as 9/11 multiplied by the net addition.
Québec classes 14, 14.1 and 44
Previously, for Québec classes 14, 14.1 and 44, TaxCycle did not calculate the accelerated CCA for capital asset additions during the period after November 20, 2018 and before December 4, 2018. For asset additions made after December 3, 2018, TaxCycle calculated the accelerated CCA according to the special Québec rules.
For additions to these classes made after December 3, 2018, Québec requires that the federal accelerated CCA rule be applied.
For additions made after December 3, 2018, the federal accelerated CCA rule generally continues to apply. However, if a capital asset addition is considered Qualified Intellectual Property (QIP), special Québec rules apply, resulting in deductions equal to the cost of additions (making the asset fully deductible).
The CCA calculations in TaxCycle T2 have been corrected accordingly and a new field has been added in the Current Year Addition/Disposition Transactions section on the S8Asset so you can indicate whether it is a QIP.
- T1—New two-year comparative summaries are now included with income statement form sets. These new summaries appear for the following form sets: T776, T2125, T2121, T2042, T1273 and T1163.
- T1—The 5 Year Summary (short version) has been added.
- T1—The type of bankruptcy return now appears in parentheses next to the client name at the top of the jacket and schedules. This shows on screen and when printing.
- T3—Review messages were added to alert the preparer when it is the 20th or 21st year of the trust as a reminder in planning for deemed dispositions of capital assets .
- T5013—The Partnership Income Reconciliation section on the S1WS has been improved to better handle amounts allocated to limited partners.
- Forms—A business number field has been added to the Engagement worksheets.
- Customer Request The last sentence in the paragraph about the Climate Action Initiative (CAI) has been changed to refer to "calculating a credit" rather than "reducing the tax owing." This change affect the CLetter and JLetter in T1 2018.
- Customer Request If there is a Title (Mr. for example) on the Info worksheet of the principal taxpayer, the Salutation snippets (CSalutation, FSalutation and JSalutation) will use this title with the last name(s) of the taxpayers. For example: Dear Mr. Smith, Dear Mr. or Mrs. Smith, or Dear Mr. Smith and Mrs. Jones. Note that the templates in English assume that the period after the title has not been entered on the Info worksheet.
- If the Title field is blank on the Info worksheet, the Salutation snippets (CSalutation, FSalutation and JSalutation) use the first name(s) to address the client. For example: Dear Robert, or Dear Robert and Samantha.
- If the Nickname is completed on the Info worksheet, this name is used instead of the first name in all cases: Dear Bob, or Dear Bob and Sam
- Corrections have been made to CO-17 calculations of Québec CCA classes 50, 14, 14.1 and 44 for additions after Nov. 20, 2018 and before Dec. 4, 2018 (see above).
- Clicking Prior Year in the right-click menu now opens the same form in the prior year return.