 Guide to Preparing 2021 Personal Tax Returns
 What's new for 2021?
COVID-19 economic relief measures
Personal tax calendar (2022) Personal tax rates and tools
Filing tips for 2021 personal tax returns
Chapter 1 – The T1 return – Getting started
Chapter 2 – Total income
 Chapter 3 – Net income deductions
Overview Employment income deductions Deductibility Expense amount Line 20600 – Pension adjustment Annotations Line 20700 – Registered pension plan (RPP) deduction Defined benefit plans Money purchase plans Foreign employer-provided retirement plans Non-residents Annotations Line 21200 – Annual union, professional, or like dues Restrictions on deductibility of dues Non-residents Annotations Line 22900 – Other employment expenses What's new for 2021? Sales expenses Capital cost allowance Expense claims by commissioned employees Certificate from employer Alternative claim under provisions for salaried employees Travel and lodging expenses Railway employees Relief telegraphers, station agents, and maintenance and repair employees All other railway company employees Calculation of deduction Limitation on meals expense deduction Lodging Certificate from employer Transport employees Calculation of deduction Certificate from employer Travel expenses Condition 1 Condition 2 Condition 3 Reasonable allowance Meal expenses Certificate from employer Motor vehicle travel expenses Types of motor vehicle expenses Deductible portion of expenses Certificate from employer Motor vehicle and aircraft finance costs Capital cost allowance Motor vehicles Aircraft Aircraft costs – Reasonableness test Employee plans and arrangements Teachers' exchange fund contributions CPP, EI, and QPIP contributions Employee retirement compensation arrangement contributions Additional conditions for deduction of RCA contributions Salary reimbursement Reimbursement of disability payments Salary deferral arrangements – Forfeited amounts Employee profit-sharing plans – Forfeited amounts Employee profit-sharing plans – Excess EPSP amounts Artists' expenses Musical instrument costs Capital cost allowance Artists' employment expenses Artistic activity Calculation of available deduction Alternative claim under other paragraphs of section 8 Other expenses Office expenses and salary of an assistant or substitute Office rent Supplies Certificate from employer Home office expenses Temporary flat-rate method Detailed method Reimbursement of office equipment costs in 2020 and 2021 Certificate from employer Legal expenses of employee Tradespeople's tool expenses Apprentice mechanics' tool costs Eligible apprentice mechanic Eligible tools Amount of deduction for cost of tools Non-residents Annotations Line 23100 – Clergy residence deduction Amount of the deduction Rent-free accommodation Residence owned or rented Restriction on deduction Documentation Non-residents Annotations Property income deductions and business investment loss Line 21700 – Business investment loss Elected deemed disposition Small business corporation Capital loss Deduction Tax shelters Non-residents Annotations Line 22100 – Carrying charges and interest expenses Carrying charges Interest expenses Interest expense planning Non-residents Annotations Line 22400 – Exploration and development expenses Canadian expenses Canadian exploration expenses (CEE) Canadian development expenses (CDE) Canadian oil and gas property expenses (COGPE) Oil sands expenses Flow-through shares Foreign expenses Foreign exploration and development expenses Limited partners Non-residents Annotations Child care expenses, moving expenses, and other deductions Line 20800 – RRSP deduction What's new for 2021? Overview of registered retirement savings plans Amounts deductible on Line 20800 Contribution deadline and carryforward of undeducted contributions RRSP deduction limit for 2021 Unused RRSP deduction room Carryforward of undeducted RRSP contributions Additional RRSP contributions Retiring allowances Lump-sum receipts Home buyers' plan and lifelong learning plan Documentation Non-residents Annotations Line 20810 – Pooled registered pension plan (PRPP) employer contributions Annotations Line 21000 – Deduction for elected split-pension amount What's new for 2021? Election to split pension income Annotations Line 21300 – Universal child care benefit repayment What's new for 2021? Annotations Line 21400 – Child care expenses What's new for 2021? Who may claim? Qualifying child care expenses Deduction limits Deduction claimed by the person with the higher net income Deduction claimed by a student Boarding school or camp Documentation Social insurance number Interaction with other deductions or credits Business expenses deduction Disability tax credit Medical expenses tax credit Non-residents Annotations Line 21500 – Disability supports deduction What's new for 2021? Who may claim? Eligibility conditions Eligible disability supports expenses Deduction limits Interaction with other deductions or credits Non-residents Annotations Line 21900 – Moving expenses Deduction limits Eligible moving expenses Non-residents Annotations Line 22000 – Support payments made Child support amount Tax treatment Support amount Allowance Periodic basis Tax treatment Documentation Non-residents Annotations Line 22200 – Deduction for CPP or QPP contributions on self-employment and other earnings What's new for 2021? Maximum contributions Deduction Optional CPP or QPP contributions Non-residents Annotations Line 22215 – Deduction for CPP or QPP enhanced contributions on employment income What's new for 2021? Optional contributions Non-residents Annotations Line 22300 – Deduction for provincial parental insurance plan (PPIP) premiums on self-employment income What's new for 2021? Who may deduct an amount on Line 22300? Maximum claimable Calculation of self-employed individual's QPIP premiums Non-residents Annotations Line 23200 – Other deductions What's new for 2021? Split income Refund of RRSP premiums Death benefit under an ALDA Transfer of RRSP refund of premiums to RRIF or annuity Conversion of RRIF to a life annuity Transfer of amounts relating to a deceased individual to an RDSP Refund of undeducted RRSP contributions Withdrawal of excess transfers from RPP to RRSP, RRIF, PRPP, or SPP Repayment of amounts paid out of RPP in error Decrease in value of unmatured RRSP or RRIF after date of death Depletion allowances Reimbursements of amounts overpaid Repayment of federal COVID-19 benefit amounts (Line 23210) Legal fees Repayment of shareholder loans Deduction for foreign taxes on income from property (other than real property) Deduction for foreign non-business income tax Non-residents Annotations Line 23210 – Federal COVID-19 benefits repayment (new for 2021) Annotations Line 23500 – Social benefits repayment What's new for 2021? Employment insurance benefits Old age security benefits Canada recovery benefit Non-residents Old age security benefits Annotations Net income Line 23600 – Net income Non-residents Annotations Chapter 4 – Taxable income
Chapter 5 – Federal non-refundable tax credits
Chapter 6 – Federal tax payable or refundable
Chapter 7 – Provincial and territorial tax
Chapter 8 – Quebec provincial income tax
Chapter 9 – Special situations and tax planning
Chapter 10 – Taxation of immigrants, emigrants, and non-residents
Chapter 11 – Administration
Appendices
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