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Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.))

Full Document:  

Act current to 2023-01-11 and last amended on 2023-01-01. Previous Versions

PART IIncome Tax (continued)

DIVISION EComputation of Tax (continued)

SUBDIVISION A.5Canada Training Credit

Marginal note:Claimed amount

  •  (1) An individual who is resident in Canada throughout a taxation year, files a return of income for the taxation year and makes a claim under this subsection is deemed to have paid, at the end of the taxation year, on account of tax payable under this Part for the taxation year, an amount claimed by the individual that does not exceed the lesser of

    • (a) the training amount limit of the individual for the taxation year, and

    • (b) 50% of the amount that would be deductible under paragraph 118.5(1)(a) or (d) in computing the individual’s tax payable under this Part for the taxation year if

      • (i) this Act were read without reference to subsections 118.5(1.2) and (2), and

      • (ii) the appropriate percentage for the taxation year were 100%.

  • Marginal note:Training amount limit

    (2) For the purposes of this section, the training amount limit of an individual for a taxation year is

    • (a) if the taxation year is after 2019 and the individual has attained the age of 26 years, and has not attained the age of 66 years, before the end of the taxation year, the lesser of

      • (i) the amount determined by the formula

        A + B − C

        where

        A
        is the individual’s training amount limit for the preceding taxation year,
        B
        is
        • (A) $250, if

          • (I) the individual has filed a return of income for the preceding taxation year,

          • (II) the individual was resident in Canada throughout the preceding taxation year,

          • (III) the total of the following amounts is greater than or equal to $10,000:

            • 1 the amount that would be the individual’s working income (as defined in subsection 122.7(1)) for the preceding taxation year, if this Act were read without reference to paragraph 81(1)(a) and subsection 81(4),

            • 2 the total of all amounts each of which is an amount payable to the individual under subsection 22(1), 23(1), 152.04(1) or 152.05(1) of the Employment Insurance Act in the preceding taxation year, and

            • 3 the amount that would be included in the individual’s income because of subparagraph 56(1)(a)(vii) in computing the individual’s income for the preceding taxation year, if this Act were read without reference to paragraph 81(1)(a), and

          • (IV) the individual’s income for the preceding taxation year under this Part does not exceed the higher dollar amount referred to in paragraph 117(2)(c), as adjusted under this Act for the preceding taxation year, and

        • (B) nil, in any other case, and

        C
        is the amount deemed to have been paid by the individual under subsection (1) in respect of the preceding taxation year, and
      • (ii) the amount determined by the formula

        $5,000 − D

        where

        D
        is the total of all amounts deemed to have been paid by the individual under subsection (1) in respect of a preceding taxation year; and
    • (b) nil, in any other case.

  • Marginal note:Effect of bankruptcy

    (3) For the purpose of this Subdivision, if an individual becomes bankrupt in a particular calendar year,

    • (a) notwithstanding subsection 128(2), any reference to the taxation year of the individual (other than in this subsection) is deemed to be a reference to the particular calendar year; and

    • (b) the individual’s working income and income under this Part for the taxation year ending on December 31 of the particular calendar year is deemed to include the individual’s working income and the income under this Part for the taxation year that begins on January 1 of the particular calendar year.

  • Marginal note:Special rules in the event of death

    (4) For the purposes of this section, if an individual dies in a calendar year,

    • (a) the individual is deemed to be resident in Canada from the time of death until the end of the year;

    • (b) the individual is deemed to be the same age at the end of the year as the individual would have been if the individual were alive at the end of the year; and

    • (c) any return of income filed by a legal representative of the individual is deemed to be a return of income filed by the individual.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2019, c. 29, s. 21

SUBDIVISION A.6Multigenerational Home Renovation Tax Credit

Marginal note:Definitions

  •  (1) The following definitions apply in this section.

    eligible dwelling

    eligible dwelling, of a qualifying individual, for a renovation period taxation year, means a housing unit (including the land subjacent to the housing unit and the immediately contiguous land, but not including the portion of that land that exceeds the greater of ½ hectare and the portion of that land that is necessary for the use and enjoyment of the housing unit as a residence) located in Canada if

    • (a) the qualifying individual or a qualifying relation of the qualifying individual (or a trust under which the qualifying individual or a qualifying relation is a beneficiary) owns — whether jointly with another person or otherwise — at any time in the renovation period taxation year, the housing unit; and

    • (b) the housing unit is ordinarily inhabited, or is reasonably expected to be ordinarily inhabited, within 12 months after the end of the renovation period

      • (i) by the qualifying individual, and

      • (ii) by a qualifying relation of the qualifying individual. (logement admissible)

    eligible individual

    eligible individual, in respect of an eligible dwelling for a renovation period taxation year, means

    • (a) an individual who ordinarily resides, or intends to ordinarily reside, in the eligible dwelling within 12 months after the end of the renovation period in respect of a qualifying renovation of the eligible dwelling and who is

      • (i) a qualifying individual,

      • (ii) the cohabiting spouse or common-law partner (as defined in section 122.6) of a qualifying individual at any time in the renovation period taxation year, or

      • (iii) a qualifying relation of a qualifying individual; or

    • (b) an individual who

      • (i) is a qualifying relation of a qualifying individual, and

      • (ii) owns the eligible dwelling or is the beneficiary of a trust that owns the eligible dwelling. (particulier admissible)

    individual

    individual does not include a trust. (particulier)

    qualifying expenditure

    qualifying expenditure, of an individual, means a reasonable outlay or expense that

    • (a) is directly attributable to a qualifying renovation of an eligible dwelling in respect of which the individual is an eligible individual;

    • (b) is made or incurred by the individual before the end of the renovation period in respect of the qualifying renovation referred to in paragraph (a);

    • (c) is the cost of goods acquired or services received, including an outlay or expense for permits required for, or for the rental of equipment used in the course of, the qualifying renovation; and

    • (d) is not an outlay or expense

      • (i) for the cost of annual, recurring or routine repair or maintenance,

      • (ii) to acquire a household appliance,

      • (iii) to acquire an electronic home-entertainment device,

      • (iv) that is the cost of housekeeping, security monitoring, gardening, outdoor maintenance or similar services,

      • (v) for financing costs in respect of the qualifying renovation,

      • (vi) in respect of goods or services provided by a person not dealing at arm’s length with the individual, unless the person is registered for the purposes of Part IX of the Excise Tax Act, or

      • (vii) that can reasonably be considered to have been reimbursed. (dépense admissible)

    qualifying individual

    qualifying individual, in respect of a renovation period taxation year, means an individual who has attained the age of

    • (a) 65 years before the end of the renovation period taxation year; or

    • (b) 18 years before the end of the renovation period taxation year and in respect of whom an amount is deductible, or would be deductible if this Act were read without reference to paragraph 118.3(1)(c), under section 118.3 in computing a taxpayer’s tax payable under this Part for the renovation period taxation year. (particulier déterminé)

    qualifying relation

    qualifying relation, of a qualifying individual for a renovation period taxation year, means an individual who

    • (a) has attained the age of 18 years before the end of the renovation period taxation year; and

    • (b) at any time in the renovation period taxation year, is a parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece or nephew of either the qualifying individual or the cohabiting spouse or common-law partner (as defined in section 122.6) of the qualifying individual. (proche admissible)

    qualifying renovation

    qualifying renovation means a renovation or alteration of, or addition to, an eligible dwelling of a qualifying individual that

    • (a) is of an enduring nature and integral to the eligible dwelling; and

    • (b) is undertaken to enable the qualifying individual to reside in the dwelling with a qualifying relation of the qualifying individual by establishing a secondary unit within the dwelling for occupancy by the qualifying individual or the qualifying relation. (travaux de rénovation admissibles)

    renovation period

    renovation period, for a qualifying renovation of an eligible dwelling, means a period that

    • (a) begins at the time that the first qualifying expenditure is made or incurred in respect of the qualifying renovation, and

    • (b) ends at the time of the completion of the qualifying renovation. (période de rénovation)

    renovation period taxation year

    renovation period taxation year means the taxation year in which the renovation period in respect of a qualifying renovation ends. (année d’imposition de la période de rénovation)

    secondary unit

    secondary unit means a self-contained housing unit that

    • (a) has a private entrance, kitchen, bathroom and sleeping area,

    • (b) if applicable, meets any local requirements to qualify as a secondary dwelling unit, and

    • (c) meets prescribed conditions, if any. (logement secondaire)

  • Marginal note:Qualifying expenditure — trusts

    (2) For the purposes of this section, a qualifying expenditure of a particular individual who is an eligible individual in respect of an eligible dwelling includes an outlay or expense made or incurred by a trust of which the particular individual is a beneficiary, in respect of the eligible dwelling, to the extent of the share of that outlay or expense that is reasonably attributable to the eligible dwelling, having regard to the amount of the outlays or expenses made or incurred in respect of the eligible dwelling, if

    • (a) the outlay or expense would be a qualifying expenditure of the particular individual if the outlay or expense had been made or incurred by that individual; and

    • (b) the trust has notified the particular individual of the amount of the outlay or expenses that are attributable to the eligible dwelling.

  • Marginal note:Deemed overpayment

    (3) An eligible individual who files a return of income for a renovation period taxation year and who makes a claim under this subsection in that return of income is deemed to have paid, at the end of the taxation year, on account of tax payable under this Part for the taxation year, an amount equal to the amount determined by the formula

    A × B

    where

    A
    is the appropriate percentage for the taxation year; and
    B
    is the least of
    • (a) $50,000,

    • (b) the total of all amounts, each of which is a qualifying expenditure of the individual in respect of a qualifying renovation that ended in the taxation year, and

    • (c) if the individual is not resident in Canada throughout the taxation year, nil.

  • Marginal note:Limits

    (4) For the purpose of this section,

    • (a) in respect of a qualifying individual, there may only be one qualifying renovation for the purpose of a claim under subsection (3) by all taxpayers during the lifetime of the qualifying individual;

    • (b) a maximum of $50,000 of qualifying expenditures may be claimed by all taxpayers in respect of the same qualifying renovation; and

    • (c) if more than one taxpayer is entitled to a deduction under subsection (3) in respect of the same qualifying individual or the same qualifying renovation and the taxpayers cannot agree as to what portion of the amount each can so deduct, the Minister may fix the portions.

  • Marginal note:Effect of bankruptcy

    (5) For the purpose of this Subdivision, if an eligible individual becomes bankrupt in a particular calendar year, despite subsection 128(2), any reference to the taxation year of the eligible individual is deemed to be a reference to the particular calendar year.

  • Marginal note:Special rules in the event of death

    (6) For the purpose of this section, if an eligible individual or a qualifying individual dies in a calendar year,

    • (a) the deceased individual is deemed to be resident in Canada from the time of death until the end of the year if, immediately before death, the deceased individual was resident in Canada;

    • (b) the deceased individual is deemed to be the same age at the end of the year as the individual would have been if the individual were alive at the end of the year;

    • (c) the deceased individual is deemed to be the cohabiting spouse or common-law partner of another individual (referred to in this paragraph as the “surviving spouse”) at the end of the year if,

      • (i) immediately before death, the deceased individual was the cohabiting spouse or common-law partner (as defined in section 122.6) of the surviving spouse, and

      • (ii) the surviving spouse is not the cohabiting spouse or common-law partner (as defined in section 122.6) of another individual at the end of the year; and

    • (d) any return of income filed by a legal representative of the deceased individual is deemed to be a return of income filed by the individual.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2022, c. 19, s. 19
 
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