You will be able to see the answers by selecting the "show answers" button after the scenario and
information.
This exercise uses a simplified version of the income tax and benefit return to show you the basic calculations
for each step.
The amounts shown are not actual tax brackets, tax rates or credit values. Do
not use them to do your taxes or to check calculations done by certified tax software or on
official paper tax forms.
Certified tax software will calculate most amounts based on the information you input. These amounts are provided
to you for you to complete this exercise manually.
If you are a resident of Quebec, you will complete a separate provincial tax return with Revenu
Québec.
Select a scenario to get started
Jonah quits the bakery
Jonah worked full-time at a local bakery last year until July, when he quit his job to travel for a month
before going back to school.
He did not have any additional income for the year.
Jonah received a T4 slip, Statement of Remuneration Paid, from the bakery.
Details of Jonah's T4 slip
Employer's name: Casey's Bakery
Employee's name and address:
Last name: Smith
First name: Jonah
Address:
1 Home Avenue
City NL X0X 0X0
Income and other information:
Box 10: Province of employment – NL
Box 12: Social Insurance Number – 123 456 789
Box 14: Employment income – $18,000.00
Box 16: Employee's CPP contributions – $870.90
Box 18: Employee's EI premiums – $284.40
Box 20: RPP contributions – $675.00
Box 22: Income tax deducted – $2,209.80
Box 24: EI Insurable earnings – $18,000.00
Box 26: CPP/QPP pensionable earnings – $18,000.00
Box 44: Union dues - $235.25
Box 45: Employer offered dental benefits - 2
Box 85: Other information (explained on reverse side of slip) – $76.50
This box represents employee-paid premiums for a private health services plan.
Terry keeps track of tips
Terry is 18 and works at a pizza restaurant, where she earns hourly wages and tips.
Last year Terry received $1000.00 in cash tips, in addition to her salary. Terry kept track of her cash
tips
because her employer does not record this information.
Terry received a T4 slip, Statement of Remuneration Paid, from her employer.
Details of Terry's T4 slip
Employer's name: Plaza Di Pizza
Employee's name and address:
Last name: Lee
First name: Terry
Address:
123 Main Street
City BC X0X 0X0
Income and other information:
Box 10: Province of employment – BC
Box 12: Social Insurance Number – 777 777 777
Box 14: Employment income – $12,000.00
Box 16: Employee's CPP contributions – $480.00
Box 18: Employee's EI premiums – $200.00
Box 22: Income tax deducted – $200.00
Box 24: EI Insurable earnings – $12,000.00
Box 26: CPP/QPP pensionable earnings – $12,000.00
Box 45: Employer offered dental benefits - 2
Farah gets a degree
Farah is working part-time at the Local Bookstore and is pursuing her degree on a part-time basis at the
City
College which granted her a scholarship. She also receives income support from the Ontario Disability
Support Program. To help Farah with her tuition fees, she received payments from her registered
education
savings plan (RESP).
Farah has a physical impairment and has been deemed eligible to claim the disability tax credit (DTC).
Although Farah is attending school part-time, she is considered a full-time student for scholarship
exemption purposes because she is eligible for the DTC.
Farah received a T5007, Statement of Benefits, from the Ontario Disability Support Program (ODSP).
Details of Farah’s T5007 slip
Recipient’s name and address:
Last name: Awan
First name: Farah
Address:
123 Main Street
City ON X0X 0X0
Income and other information:
Box 11: Social assistance payments or provincial or territorial supplements – $14,000.00
Box 12: Social insurance number – 000 000 000
Farah received a T4 slip, Statement of Remuneration Paid, from her employer.
Details of Farah’s T4 slip
Employer’s name: Local Bookstore
Employee’s name and address:
Last name: Awan
First name: Farah
Address:
123 Main Street
City ON X0X 0X0
Income and other information:
Box 10: Province of employment – ON
Box 12: Social insurance number – 000 000 000
Box 14: Employment income – $10,000.00
Box 16: Employee’s CPP contributions – $385.00
Box 18: Employee’s EI premiums – $150.00
Box 22: Income tax deducted – $0.00
Box 24: EI Insurable earnings – $10,000.00
Box 26: CPP/QPP pensionable earnings – $10,000.00
Box 45: Employer offered dental benefits - 2
Farah received a T4A slip, Statement of Pension, Retirement, Annuity, and Other Income,
from her school for her
scholarship.
Details of Farah’s T4A slip
Payer’s name: City College
Recipient’s name and address:
Last name: Awan
First name: Farah
Address:
123 Main Street
City ON X0X 0X0
Other information:
Box 12: Social insurance number – 000 000 000
Box 105: Scholarships, fellowships, bursaries, and artists' project grants (explained on reverse
side of slip) – $4,500.00
Farah received a T4A slip, Statement of Pension, Retirement, Annuity, and Other Income,
from her financial institution for her RESP payments.
Note: Your financial institution will only report the taxable portion of
your RESP payments on your T4A slip.
Details of Farah’s T4A slip
Payer’s name: Financial Institution
Recipient’s name and address:
Last name: Awan
First name: Farah
Address:
123 Main Street
City ON X0X 0X0
Other information:
Box 11: School type – 2
Box 012: Social insurance number – 000 000 000
Box 042: RESP educational assistance payments (explained on reverse side of slip) – $5,700.00
Farah received a Form T2202, Tuition and Enrolment Certificate, from her school for her
tuition fees.
Details of Farah’s Form T2202
Name and address of designated educational institution:
City College
1 Study Road
City ON X0X 0X0
Additional information:
Box 11: School type - 2
Box 13: Name of program or course - Degree
Box 14: Student number - 123456789
Box 17: Social insurance number (SIN) - 000 000 000
Student’s name: Farah Awan
Student address:
123 Main Street
City ON X0X 0X0
Session periods 1:
Box 19: From YY/MM - 25/01
Box 20: To YY/MM - 25/04
Box 21: Number of months part-time - 4
Box 23: Eligible tuition fees, part-time and full-time - $3,000.00
Session periods 2:
Box 19: From YY/MM - 25/09
Box 20: To YY/MM - 25/12
Box 21: Number of months part-time - 4
Box 23: Eligible tuition fees, part-time and full-time - $3,000.00
Totals:
Box 25: Total number of months part-time - 8
Box 26: Total eligible tuition fees, part-time and full-time - $6,000.00
Chayton lives on reserve
Chayton lives on reserve and worked part-time at The Gas Station located off reserve last year. After he
received his electrician’s professional certificate, he started working on reserve at the Local
Electricians.
Chayton’s employment income from The Gas Station is taxable as:
he worked off reserve
his employer is located off reserve
Chayton’s employment income from the Local Electricians is tax-exempt as:
he is registered under the Indian Act
he lives on reserve
he works on reserve
his employer is also located on reserve
Note: The Canada Revenue Agency uses the term “Indian“ because it has a legal meaning in the Indian Act.
Chayton received a T4 slip, Statement of Remuneration Paid, from his employer located off reserve.
Details of Chayton’s T4 slip
Employer’s name: The Gas Station
Employer’s address:
1 Town Road
City QC X0X 0X0
Employee’s name and address:
Last name: Papatie
First name: Chayton
Address:
123 Main Street
First Nation Reserve QC X0X 0X0
Income and other information:
Box 10: Province of employment - QC
Box 12: Social insurance number - 123 456 789
Box 14: Employment income - $7,000.00
Box 17: Employee’s QPP contributions - $350.00
Box 18: Employee’s EI premiums - $100.00
Box 22: Income tax deducted - $200.00
Box 24: EI Insurable earnings - $7,000.00
Box 26: CPP/QPP pensionable earnings - $7,000.00
Box 45: Employer offered dental benefits - 2
Box 55: Employee’s PPIP premiums - $50.00
Box 56: PPIP insurable earnings - $7,000.00
Chayton received a T4 slip, Statement of Remuneration Paid, from his employer located on reserve.
Details of Chayton’s T4 slip
Employer’s name: Local Electricians
Employer’s address:
1 Main Street
First Nation Reserve, QC X0X 0X0
Employee’s name and address:
Last name: Papatie
First name: Chayton
Address:
123 Main Street
First Nation Reserve QC X0X 0X0
Income and other information:
Box 10: Province of employment - QC
Box 12: Social insurance number - 123 456 789
Box 17: Employee’s QPP contributions - $450.00
Box 18: Employee’s EI premiums - $550.00
Box 24: EI Insurable earnings - $40,000.00
Box 26: CPP/QPP pensionable earnings - $40,000.00
Box 44: Union dues - $150.00
Box 45: Employer offered dental benefits - 2
Box 55: Employee’s PPIP premiums - $200.00
Box 56: PPIP insurable earnings - $40,000.00
Box 71: Other information (explained on reverse side of slip) - $40,000.00
This box represents the Indian Act (exempt income) - Employment.
Dominique receives extra income
Dominique graduated from post-secondary school and got a job working for the tech company, Modem Milieu. Last year, they worked the entire year for Modem Milieu and also worked part-time at the Local Computer Store on weekends.
Now that Dominique has extra income, they’re thinking about saving for the future. They decided to invest into a Tax-Free Savings Account (TFSA) by contributing $200 a month.
Dominique also receives interest income from the investments their grandparents set up for them.
Dominique received a T4 slip, Statement of Remuneration Paid, from their employer Modem Milieu.
Details of Dominique’s T4 slip
Employer's name: Modern Milieu
Employee's name and address:
Last name: Richard
First name: Dominique
Address:
123 Main Street
City SK X0X 0X0
Income and other information:
Box 10: Province of employment – SK
Box 12: Social Insurance Number – 000 000 000
Box 14: Employment income – $60,000.00
Box 16: Employee's CPP contributions – $3,300.00
Box 18: Employee's EI premiums – $1,000.00
Box 22: Income tax deducted – $9,500.00
Box 24: EI Insurable earnings – $60,000.00
Box 26: CPP/QPP pensionable earnings – $60,000.00
Box 44: Union dues – $650.00
Box 45: Employer offered dental benefits – 2
Dominique received a T4 slip, Statement of Remuneration Paid, from their employer the Local Computer Store.
Details of Dominique’s T4 slip
Employer's name: Local Computer Store
Employee's name and address:
Last name: Richard
First name: Dominique
Address:
123 Main Street
City SK X0X 0X0
Income and other information:
Box 10: Province of employment – SK
Box 12: Social Insurance Number – 000 000 000
Box 14: Employment income – $10,500.00
Box 16: Employee's CPP contributions – $400.00
Box 18: Employee's EI premiums – $130.00
Box 22: Income tax deducted – $0.00
Box 24: EI Insurable earnings – $10,500.00
Box 26: CPP/QPP pensionable earnings – $10,500.00
Box 45: Employer offered dental benefits – 2
Dominique received a T5 slip, Statement of Investment Income, from their financial institution.
Details of Dominique’s T5 slip
Recipient’s name and address:
Richard, Dominique
123 Main Street
City SK X0X 0X0
Payer’s name and address:
Financial Institution
1 Major Street
City SK X0X 0X0
Income and other information:
Box 13: Interest from Canadian sources – $1,000.00
Box 22: Recipient identification number – 000 000 000
Box 23: Recipient type – 1
Ahnah claims northern residents deductions
Ahnah lives with her son Max in the territory of Nunavut. Her son goes to daycare while she works for the local bank.
Ahnah received a T4 slip, Statement of Remuneration Paid, from her employer.
Details of Ahnah’s T4 slip
Employer's name: Local Bank
Employee's name and address:
Last name: Nanook
First name: Ahnah
Address:
123 Main Street
City NU X0X 0X0
Income and other information:
Box 10: Province of employment – NU
Box 12: Social Insurance Number – 000 000 000
Box 14: Employment income – $120,000.00
Box 16: Employee's CPP contributions – $3,800.00
Box 16A: Employee’s second CPP contributions – $188.00
Box 18: Employee’s EI premiums – $1,000.00
Box 22: Income tax deducted – $18,000.00
Box 24: EI Insurable earnings – $63,200.00
Box 26: CPP/QPP pensionable earnings – $73,200.00
Box 45: Employer offered dental benefits – 2
Miguel receives employment insurance benefits
Miguel worked at the Local Coffee Shop until it closed last summer. For the remainder of the year he received employment insurance benefits.
Miguel received a T4 slip, Statement of Remuneration Paid, from the Local Coffee Shop.
Details of Miguel’s T4 slip
Employer's name: Local Coffee Shop
Employee's name and address:
Last name: Lopez
First name: Miguel
Address:
123 Main Street
City NB X0X 0X0
Income and other information:
Box 10: Province of employment – NB
Box 12: Social Insurance Number – 000 000 000
Box 14: Employment income – $24,500.00
Box 16: Employee’s CPP contributions – $1,300.00
Box 18: Employee’s EI premiums – $390.00
Box 22: Income tax deducted – $2,000.00
Box 24: EI Insurable earnings – $24,500.00
Box 26: CPP/QPP pensionable earnings – $24,500.00
Box 45: Employer-offered dental benefits – 2
Miguel received a T4E slip, Statement of Employment Insurance and Other Benefits, from Service Canada.
Details of Miguel’s T4E slip
Payer’s name: Service Canada - ESDC
Recipient’s name and address:
Miguel Lopez
123 Main Street
City NB X0X 0X0
Income and other information:
Box 7: Repayment rate – 0%
Box 12: Social Insurance Number – 000 000 000
Box 14: Total benefits paid – $13,500.00
Box 15: Regular and other benefits paid – $13,500.00
Use the information to fill out the simplified tax return to find out if Miguel will get a refund or have a balance owing.
For this example, you will be able to validate your amounts, calculations, and final answer at the end of the exercise.
Note: Before you proceed
if you have filled out a previous scenario.
Step 1: Identification
Enter the individual's personal information.
Review the tax information and enter the information in the correct spaces.
Name: Jonah Smith
SIN: 123 456 789
Name: Terry Lee
SIN: 777 777 777
Name: Farah Awan
SIN: 000 000 000
Name: Chayton Papatie
SIN: 123 456 789
Name: Dominique Richard
SIN: 000 000 000
Name: Ahnah Nanook
SIN: 000 000 000
Name: Miguel Lopez
SIN: 000 000 000
Name
Social Insurance Number
Step 2: Total income
Calculate the individual's total income.
Review the tax information and complete the calculations.
Jonah’s total income includes:
employment income of $18,000.00 shown in box 14 of his T4 slip
Enter total employment income
(from box 14 of a T4 slip)
Equals the total income
Terry’s total income includes:
employment income of $12,000.00 shown in box 14 of her T4 slip
cash tips received for an amount of $1,0000.00 not shown on an information
slip
Enter total employment income
(from box 14 of a T4 slip)
Plus other employment income
(tips not reported on a T4 slip)
Equals the total income
Farah’s total income includes:
the employment income of $10,000.00 shown in box 14 of her T4 slip
income support from the ODSP of $14,000.00 shown in box 11 of her T5007 slip
payments of $5,700.00 from her RESP shown in box 042 of her T4A slip
Note: Farah does not need to report her scholarship as income when she does her taxes
because she is eligible for the DTC and is considered a full-time student for scholarship exemption
purposes.
Farah may also receive additional grants from federal, provincial or territorial governments.
Enter total employment income
(from box 14 of a T4 slip)
Plus other income (from RESP)
(from box 42 of a T4A slip)
Plus social assistance payments
(from box 11 of a T5007 slip)
Equals the total income
Chayton’s total income includes:
the employment income of $7,000.00 shown in box 14 of his T4 slip from The
Gas Station.
the exempt income of $40,000.00 shown in box 71 of his T4 slip from the
Local Electricians is not entered here. As instructed on the back of the T4 slip, Chayton
will complete the Form T90, Income Exempt from Tax under the Indian Act to report
the exempt income.
Enter total employment income
(from box 14 of a T4 slip)
Equals the total income
Dominique’s total income includes:
employment income of $60,000 shown in box 14 of their T4 slip from Modem Milieu
employment income of $10,500 shown in box 14 of their T4 slip from the Local Computer Store
interest income of $1,000 shown in box 13 of their T5 slip
Enter total employment income
(from box 14 of a T4 slip)
Plus interest and other investment income
(from box 13 of a T5 slip)
Equals the total income
Ahnah’s total income includes:
employment income of $120,000.00 shown in box 14 of her T4 slip from the Local Bank
Enter total employment income
(from box 14 of a T4 slip)
Equals the total income
Miguel’s total income includes:
employment income of $24,500 shown in box 14 of his T4 slip from the Local Coffee Shop
employment insurance benefits of $13,500 shown in box 14 of his T4E slip
Enter total employment income
(from box 14 of a T4 slip)
Plus employment insurance benefits
(from box 14 of a T4E slip)
Equals the total income
Step 3: Net income
Calculate the individual's net income.
Review the tax information and complete the calculations.
Jonah’s deductions for calculating net income are $950.00.
What his deductions include
registered pension plan (RPP) contributions of $675.00 shown in box 20 of his T4 slip
union dues of $235.25 shown in box 44 of his T4 slip
enhanced Canada Pension Plan (CPP) contributions of $39.75
Enter the registered pension plan (RPP) deduction
(from box 20 of a T4 slip)
Plus annual union dues
(from box 44 of a T4 slip)
Plus deduction for CPP or QPP enhanced contributions on employment income
Equals the total deductions in Step 3
Enter the total income from Step 2
Minus the total deductions for calculating net income
Equals the net income
Terry’s deductions for calculating net income are $625.00.
What her deductions include
RRSP contributions of $540.00 shown on a receipt
an image of this receipt is not provided here
enhanced CPP contributions of $85.00
Enter the RRSP deduction
(from an RRSP, receipt not provided here)
Plus deduction for CPP or QPP enhanced contributions on employment income
Equals the total deductions in Step 3
Enter the total income from Step 2
Minus the total deductions for calculating net income
Equals the net income
Farah’s deductions for calculating net income are $65.00.
What her deductions include
enhanced CPP contributions of $65.00.
Deduction for CPP or QPP enhanced contributions on employment income
Equals the total deductions in Step 3
Enter the total income from Step 2
Minus the total deductions for calculating net income
Equals the net income
Chayton’s deductions for calculating net income are $150.00.
What his deductions include
union dues shown of $150.00 in box 44 of his Local Electricians T4 slip
Enter the annual union dues
(from box 44 of a T4 slip)
Equals the total deductions in Step 3
Enter the total income from Step 2
Minus the total deductions for calculating net income
Equals the net income
Dominique’s deductions for calculating net income are $1,200.00.
What their deductions include
union dues of $650.00 shown in box 44 of their T4 slip from Local Computer Store
enhanced Canada Pension Plan (CPP) contributions of $550.00
contributions to a TFSA are not deductible and any investments earned through a TFSA are not taxable, this means Dominique will not receive a tax slip related to their TFSA
Enter the annual union dues
(from box 44 of a T4 slip)
Plus deduction for CPP or QPP enhanced contributions on employment income
Equals the total deductions in Step 3
Enter the total income from Step 2
Minus the total deductions for calculating net income
Equals the net income
Ahnah’s deductions for calculating net income are $3,400.00.
What her deductions include
day care expenses of $2,600.00 shown on a receipt
an image of the receipt is not provided here
Ahnah will calculate the allowable child care expenses deduction on form T778, Child Care Expenses Deduction
enhanced Canada Pension Plan (CPP) contributions of $800.00
Enter the child care expenses
Plus deduction for CPP or QPP enhanced contributions on employment income
Equals the total deductions in Step 3
Enter the total income from Step 2
Minus the total deductions for calculating net income
Equals the net income
Miguels’s deductions for calculating net income are $200.00.
What his deductions include
enhanced Canada Pension Plan (CPP) contributions of $200.00
Plus deduction for CPP or QPP enhanced contributions on employment income
Equals the total deductions in Step 3
Enter the total income from Step 2
Minus the total deductions for calculating net income
Equals the net income
Step 4: Taxable income
Calculate the individual's taxable income.
Review the tax information and complete the calculations.
Jonah's deductions for calculating taxable income are $0.00.
Terry's deductions for calculating taxable income are $0.00.
Farah's deductions for calculating taxable income are $14,000.00 from the ODSP as
this income is not taxable.
Chayton's deductions for calculating taxable income are $0.00.
Dominique's deductions for calculating taxable income are $0.00.
Ahnah’s deductions for calculating taxable income are $8,000.00.
What her deductions include
northern residents deduction of $8,000.00 calculated on Form, T2222 Northern Residents Deductions for the basic and additional residency amounts
Miguel’s deductions for calculating taxable income are $0.00.
Enter the net income from Step 3
Minus the total deductions for calculating taxable income
Equals the taxable income
Step 5: Federal tax
Calculate the federal tax.
Part A: Calculate the federal tax using the correct tax bracket
To calculate Jonah's federal tax:
To calculate Terry's federal tax:
To calculate Farah's federal tax:
To calculate Chayton's federal tax:
To calculate Dominique's federal tax:
To calculate Ahnah's federal tax:
To calculate Miguel's federal tax:
Select the tax bracket
Enter the taxable income from Step 4 in the column for the appropriate tax bracket.
Use the table below to complete the calculation in that column.
Tax brackets (fill in only one tax bracket)(fill in tax bracket 1)(fill in tax bracket 2)(fill in tax bracket 3)(fill in tax bracket 4)
Tax bracket
1
Tax bracket
2
Tax bracket
3
Tax bracket
4
Taxable income
$49,999 or less
$50,000 to $99,999
$100,000 to $149,999
$150,000 or more
Enter the taxable income from Step 4
Enter the taxable income from Step 4 (Answer)
Enter the taxable income from Step 4 (Answer)
Enter the taxable income from Step 4 (Answer)
Enter the taxable income from Step 4 (Answer)
Enter the taxable income from Step 4 (Answer)
Enter the taxable income from Step 4 (Answer)
Enter the taxable income from Step 4 (Answer)
Subtract this amount from taxable income
minus 0.00
minus 49,999.00
minus 99,999.00
minus 149,999.00
Equals taxable income subject to federal tax rate
equals
equals
equals
equals
Equals taxable income subject to federal tax
rate (Answer)
Equals taxable income subject to federal tax
rate (Answer)
Equals taxable income subject to federal tax
rate(Answer)
Equals taxable income subject to federal tax
rate(Answer)
Equals taxable income subject to federal tax
rate(Answer)
Equals taxable income subject to federal tax
rate(Answer)
Equals taxable income subject to federal tax
rate(Answer)
Multiply by the federal tax rate
multiplied by 10% (Multiply by 0.10)
multiplied by 20% (Multiply by 0.20)
multiplied by 30% (Multiply by 0.30)
multiplied by 40% (Multiply by 0.40)
Equals tax after
multiplying by the federal tax rate
equals
equals
equals
equals
Equals tax after
multiplying by the federal tax (Answer)
Equals tax after
multiplying by the federal tax (Answer)
Equals tax after
multiplying by the federal tax rate (Answer)
Equals tax after
multiplying by the federal tax rate (Answer)
Equals tax after
multiplying by the federal tax rate (Answer)
Equals tax after
multiplying by the federal tax rate (Answer)
Equals tax after
multiplying by the federal tax rate (Answer)
Add federal tax calculated on
income in the lower tax brackets
plus 0.00
plus 4,999.90
plus 14,999.90
plus 29,999.90
Equals federal tax on taxable
income
equals
equals
equals
equals
Equals federal tax on taxable
income (Answer)
Equals federal tax on taxable
income (Answer)
Equals federal tax on taxable
income (Answer)
Equals federal tax on taxable
income (Answer)
Equals federal tax on taxable
income (Answer)
Equals federal tax on taxable
income (Answer)
Equals federal tax on taxable
income (Answer)
Reminder: This exercise is using simplified tax rates. They are
different than the tax rates used on the actual tax return.
Part B: Calculate the federal tax using non-refundable tax credits
Review the tax information and complete the calculations.
Jonah’s federal non-refundable tax credits are $16,500.00.
What his non-refundable tax credits include
the basic personal amount
CPP contributions calculated using amounts shown in box 16 of his T4 slip
employment insurance (EI) premiums shown in box 18 of his T4 slip
the Canada employment amount
tuition amounts calculated using amounts shown on a T2202, Tuition and Enrolment Certificate
an image of this form is not provided here
Jonah’s eligible medical expenses, including premiums for private health services plan
shown in box 85 of his T4 slip
Terry’s federal non-refundable tax credits are $17,500.00.
What her non-refundable tax credits include
the basic personal amount
CPP contributions calculated using amounts shown in box 16 of her T4 slip
employment insurance (EI) premiums shown in box 18 of her T4 slip
the Canada employment amount
Farah’s federal non-refundable tax credits are $26,265.00.
What her non-refundable tax credits include
the basic personal amount
CPP contributions calculated using amounts shown in box 16 of her T4 slip
employment insurance (EI) premiums shown in box 18 of her T4 slip
the Canada employment amount
disability amount (for self)
Chayton’s federal non-refundable tax credits are $17,520.00.
What his non-refundable tax credits include
the basic personal amount
QPP contributions calculated using amounts shown in box 17 of his T4 slips
employment insurance (EI) premiums shown in box 18 of his T4 slips
PPIP amount calculated using amounts shown in box 55 of his T4 slips (Only when a resident of Quebec at the end of the tax year, who worked in Quebec during
the year)
the Canada employment amount
Dominique’s federal non-refundable tax credits are $21,000.00.
What their non-refundable tax credits include
the basic personal amount
CPP contributions calculated using amounts shown in box 16 of their T4 slip
employment insurance (EI) premiums shown in box 18 of their T4 slip
the Canada employment amount
Ahnah’s federal non-refundable tax credits are $37,000.00.
What her non-refundable tax credits include
the basic personal amount
the amount for an eligible dependant
CPP contributions calculated using amounts shown in box 16 of her T4 slip
employment insurance (EI) premiums shown in box 18 of her T4 slip
the Canada employment amount
Miguel’s federal non-refundable tax credits are $18,500.00.
What his non-refundable tax credits include
the basic personal amount
CPP contributions calculated using amounts shown in box 16 of his T4 slip
employment insurance (EI) premiums shown in box 18 of his T4 slip
the Canada employment amount
Enter the federal non-refundable tax
credits
Multiply by the federal non-refundable tax credit rate (Multiply by 0.10)
10%
Equals the total federal non-refundable tax credits amount
Enter the federal tax on taxable
income
from the table above
Minus the total federal non-refundable tax credits amount
Equals the federal tax
If negative, enter "0"
(Remember, non-refundable tax credits can only reduce tax to zero.)
Note 1: Farah chose to transfer her tuition credits to her parents. Any remaining
unused tuition credits will be carried forward to reduce the taxes she owes in a future year.
Note 2: Farah also chose to transfer her unused DTC to one of her parents.
Provincial or territorial tax
You will do a similar calculation to figure out the provincial or territorial taxes you might owe. You
will report this amount in Step 6.
Note: If you lived in Quebec on December 31 of the tax year, you will calculate your
provincial taxes by completing a separate provincial tax return for Revenu Québec.
Step 6: Refund or balance owing
Calculate to see if the final result is a refund or a balance owing.
Review the tax information and complete the calculations.
Jonah's provincial tax is $16.00
when you do your taxes, a similar calculation is done for provincial or territorial taxes as
for federal tax (Step 5)
for this exercise, the completed calculation is provided
Jonah’s total income tax deducted at source is $2,209.80, as shown in box 22
of
his T4 slip
Jonah’s refundable tax credits are $0.00
Jonah is not eligible for the Canada workers benefit because he is enrolled as a full-time student for more than 13 weeks
Terry’s provincial or territorial tax is $0.00
When you do your taxes, a similar calculation is done for provincial or territorial taxes as
for
federal tax (Step 5)
For this exercise, the completed calculation is provided.
Terry’s total income tax deducted at source is $200.00, as shown on her T4
slip
Terry’s refundable tax credits are $25.00
What her refundable tax credits include
CPP overpayments, calculated using amounts shown in box 16 of her T4 slip
EI overpayments, calculated using amounts shown in box 18 of her T4 slip
Terry is not eligible for the Canada workers benefits because she is under the age of 19
Farah’s provincial or territorial tax is $0.00
When you do your taxes, a similar calculation is done for provincial or territorial taxes as
for federal tax (Step 5)
For this exercise, the completed calculation is provided
Farah’s total income tax deducted at source is $0.00, as shown in box 22 of
her T4 slip
Farah’s refundable tax credits are $1,600.00
What her refundable tax credits include
Farah’s Canada workers benefit (CWB) including the CWB disability supplement because Farah is attending school part-time and has been approved for DTC
Chayton’s provincial or territorial tax is $0.00
Chayton’s provincial tax is calculated on a separate provincial tax return for Revenu Quebec
for this exercise, the completed calculation is provided
this exercise includes both the federal and provincial tax calculations
Chayton’s actual federal tax return will not have a provincial or territorial tax
Chayton’s total income tax deducted at source is $200.00, as shown in box 22 of his
T4 slip
Chayton’s refundable tax credits are $1,700.00 What his refundable tax credits include
Chayton’s Canada workers benefit (CWB) as his exempt income of $40,000 is not included in the calculation of CWB
Dominique’s provincial tax is $5,200.00
when you do your taxes, a similar calculation is done for provincial or territorial taxes as for federal tax (Step 5)
for this exercise, the completed calculation is provided
Dominique’s total income tax deducted at source is $9,500.00, as shown in box 22 of their T4 slip
Dominique’s refundable tax credits are $80.00 What his refundable tax credits include
CPP overpayments, calculated using amounts shown in box 16 of their T4 slip
EI overpayments, calculated using amounts shown in box 18 of their T4 slip
Dominique is not eligible for the Canada workers benefits because their income is too high
Ahnah’s territorial tax is $4,370.00
when you do your taxes, a similar calculation is done for provincial or territorial taxes as for federal tax (Step 5)
For this exercise, the completed calculation is provided
Ahnah’s total income tax deducted at source is $18,000.00, as shown in box 22 of her T4 slip
Ahnah’s refundable tax credits are $1,750.00 What her refundable tax credits include
Ahnah’s provincial refundable tax credits for the cost of living are calculated on the provincial schedule NU479, Nunavut Credits
Ahnah is not eligible for the Canada workers benefits because her income is too high
Miguel’s provincial tax is $1,000.00
When you do your taxes, a similar calculation is done for provincial or territorial taxes as for federal tax (Step 5)
For this exercise, the completed calculation is provided
Miguel’s total income tax deducted at source is $2,500.00, as shown in box 22 of his T4 slip and in box 22 of his T4E slip
Miguel’s refundable tax credits are $50.00 What his refundable tax credits include
CPP overpayments, calculated using amounts shown in box 16 of his T4 slip
EI overpayments, calculated using amounts shown in box 18 of his T4 slip
Miguel is not eligible for the Canada workers benefits because his income is too high
Enter the federal tax from Step 5
Plus the provincial
or territorial tax
Equals the total payable
Enter the tax deducted at source
Plus the eligible refundable tax
credits
Equals the total credits
Enter the total payable
Minus the total credits
Equals the final result
A positive result represents a balance owing, and a negative result represents a refund.
Compare your answers to the answers provided at the end of the exercise.
Answer: Chayton will receive a
refund of $1,900.00.
Answer: Dominique will have a
balance owing of $2,580.10.
Note: No tax was deducted from the employment income from Local Computer Store and the interest income Dominique received, which is why they will have a balance owing.
If Dominique continues to work at Local Computer Store they can ask their employer to take extra tax off their pay by filling out a TD1 form.
Filling out the TD1 form tells Local Computer Store that:
this is their second job and they have already claimed the basic personal amount on the TD1, Personal Tax Credits Return form for Modem Milieu
they would like additional taxes to be taken off from their pay
Answer: Ahnah will receive a
refund of $1,499.80.
Answer: Miguel will have a
balance owing of $380.00.
Note: Miguel has a balance owing as not enough tax was deducted from his employment insurance benefits.
Miguel can ask Service Canada to take more tax off of his benefit payments if he continues to receive them this year.
of.
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2026-08-17
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