Tax Credits Flashcards
How do you calculate the tax credit for a donation to a federal political party?
Tax credit for donations to a federal political party:
- 75% of first $400
- 50% x amount over $400
- 33.33% of amount over $750 up to $1,275
- maximum tax credit is $650
How much is the basic personal amount for 2012?
$10,822
How do you calculate the married or common-law credit for 2012?
Basic personal tax credit base……………………….$10,822
Spouse’s tax credit base…………………. $10,8221
less: spouse’s Division B income)……… _ xxx_
Net amount (non-negative)……………………………… _ xxx_
Total tax credit base……………………………………….$ xxx
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Tax credit (15% of total)……………………………………$ xxx
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- or $12,822 if eligible for the family caregiver amount for a spouse or common-law partner who is dependent by reason of mental or physical infirmity.
How do you calculate the equivalent to married status for wholly dependent person credit?
In the same way as the married or common-law credit but it applies to an individual who, at any time in the year, was single, divorced, separated, widowed and who supported a relative.
What are the conditions for the equivalent to married tax credit?
- The dependent must live, at some time in the year, in the same self-contained establishment as the taxpayer.
- The dependent must be related by blood. Uncles, aunts, nieces, nephews, and cousins do not qualify.
- Unless the dependant is a child of the taxpayer, the dependant must be resident in Canada.
- Unless the dependant is the parent or grandparent of the taxpayer, the dependant must be either:
- under 18 at any time in the year, or
- dependant by reason of mental or physical infirmity.
- Only one equivalent to married tax credit is available to a taxpayer.
- The dependant cannot be claimed if the dependant has been claimed under the married status credit by another taxpayer.
- When two people are eligible for the tax credit in respect of the same person or the same domestic establishment, only one person is permitted the tax credit and only one etmc can be claimed for a given domestice establishment.
- A dependant claimed here cannot also be claimed for the
- age 18 or over and infirm credit, or
- the caregiver credit
- An individual who is required to make child support payments cannot claim any personal tax credits in respect of the child.
- An individual claiming the etmc cannot also claim the married credit in the same year.
How do you calculate the child amount (child tax credit)?
$2,1911 x 15% = $329 fpr each child under 18 at the end of the year.
Can be claimed:
- by either parent if they live together, or
- by the parent who would be eligible to claim the etmc if that child were the only child.
- fully for the year of birth, adoption, or death of a child.
Any unused portion can be transferred to the parent’s spouse or common-law partner.
- $4,191 if eligible for the family caregiver amount of $2,000 for a child who is mentally or physically infirm.
How do you calculate the Canada employment credit?
15% times the lesser of:
- employment income, and
- $1,095
How do you calculate the charitable donations credit?
- 15% of first $200 of total gifts
- 29% of total gifts in excess of $200
How do you calculate the medical expenses tax credit?
15% of medical expenses in excess of the lesser of
- $2,109 and
- 3% of net income (Div. B)
PLUS the medical expenses credit that would be eligible for a dependent over 18
Medical expenses formula:
A[(B-C) + D]
- A = 15%
- B = medical expense of family (inlcude premiums deducted for private health insurance)
- C = lesser of:
- $2,109
- 3% of net income
- D = same formula as A to C for dependents over age 18
How do you calculate the tuition tax credit?
15% of eligible tuition fees paid in respect of that year.
Which fees are eligible for the tuition tax credit?
Eligible fees include:
- library and labratory charges,
- mandatory ancillary fees (other than student association fees),
- health services and athletics
- (from 2012) fees for examination to obtain professional status or to be licensed or certified to practice a trade or profession in Canada
Restrictions:
- an eligible fee that is not required from all students is limited to $250.
Which fees are not eligible for the tuition tax credit?
Fees excluded:
- property to be acquired by students
- services not ordinarily provided at post-secondary institutions in Canada
- tax exempt financial assistance to students
- mandatory charges for construction, renovation or maintenance of buildings or facility
What are the rules for claiming the tuition credit for attending a university outside Canada?
- must be in full-time attendance
- the course must lead to a degree
- the course must be of at least three consecutive weeks’ duration.
- must be in excess of $100
- must be paid by the student
- allowed for a Canadian resident who commuted to U.S. to attend post-secondary level courses.
What is the calculation for the education credit?
Full-time:
- 15% x $400 per month
Part-time:
- 15% x $120 per month
- not less than 12 hours per month
Included:
- distance education programs or correspondence courses
- foreign universities for at least three consecutive weeks.
What is the textbook credit?
Full-time:
- $65 per month
Part-time:
- $20 per month
Foreign universities included if duration is at least three consecutive weeks.
