Income Tax Act

Marginal note:Deemed overpayment

• 122.61 (1) Where a person and, where the Minister so demands, the person’s cohabiting spouse or common-law partner at the end of a taxation year have filed a return of income for the year, an overpayment on account of the person’s liability under this Part for the year is deemed to have arisen during a month in relation to which the year is the base taxation year, equal to the amount determined by the formula

  1/12[(A - B) + C + M]

  where

  A

  is the total of

  • (a) the product obtained by multiplying $1,090 by the number of qualified dependants in respect of whom the person was an eligible individual at the beginning of the month, and

  • (b) the product obtained by multiplying $75 by the number of qualified dependants, in excess of 2, in respect of whom the person was an eligible individual at the beginning of the month;

  • (c) [Repealed, 2006, c. 4, s. 177]

  B

  is 4% (or where the person is an eligible individual in respect of only one qualified dependant at the beginning of the month, 2%) of the amount, if any, by which

  • (a) the person’s adjusted income for the year

  exceeds

  • (b) the greater of $32,000 and the dollar amount, as adjusted annually and referred to in paragraph 117(2)(a), that is used for the calendar year following the base taxation year;

  C

  is the amount determined by the formula

  F - (G × H)

  where

  F

  is, where the person is, at the beginning of the month, an eligible individual in respect of

  • (a) only one qualified dependant, $1,463, and

  • (b) two or more qualified dependants, the total of

    • (i) $1,463 for the first qualified dependant,

    • (ii) $1,254 for the second qualified dependant, and

    • (iii) $1,176 for each of the third and subsequent qualified dependants,

  G

  is the amount determined by the formula

  J - [K - (L/0.122)]

  where

  J

  is the person’s adjusted income for the year,

  K

  is the amount referred to in paragraph (b) of the description of B, and

  L

  is the amount referred to in paragraph (a) of the description of F, and

  H

  is

  • (a) if the person is an eligible individual in respect of only one qualified dependant, 12.2%, and

  • (b) if the person is an eligible individual in respect of two or more qualified dependants, the fraction (expressed as a percentage rounded to the nearest one-tenth of one per cent) of which

    • (i) the numerator is the total that would be determined under the description of F in respect of the eligible individual if that description were applied without reference to the fourth and subsequent qualified dependants in respect of whom the person is an eligible individual, and

    • (ii) the denominator is the amount referred to in paragraph (a) of the description of F, divided by 0.122; and

  M

  is the amount determined by the formula

  N - (O × P)

  where

  N

  is the product obtained by multiplying $2,300 by the number of qualified dependants in respect of whom both

  • (a) an amount may be deducted under section 118.3 for the taxation year that includes the month, and

  • (b) the person is an eligible individual at the beginning of the month,

  O

  is the amount determined by the formula

  J - [F/H + (K - L/0.122)]

  where the descriptions of J, F, H, K, and L are described in the description of C, and

  P

  is 4% (or where the person is an eligible individual in respect of only one qualified dependant included in the description of N at the beginning of the month, 2%) of the amount determined for the description of O,

• Marginal note:Shared-custody parent

  (1.1) Notwithstanding subsection (1), if an eligible individual is a shared-custody parent in respect of one or more qualified dependants at the beginning of a month, the overpayment deemed by subsection (1) to have arisen during the month is equal to the amount determined by the formula

  1/2 × (A + B)

  where

  A

  is the amount determined by the formula in subsection (1), calculated without reference to this subsection, and

  B

  is the amount determined by the formula in subsection (1), calculated without reference to this subsection and subparagraph (b)(ii) of the definition eligible individual in section 122.6.

• Marginal note:Exceptions

  (2) Notwithstanding subsection 122.61(1), where a particular month is the first month during which an overpayment that is less than $10 (or such other amount as is prescribed) is deemed under that subsection to have arisen on account of a person’s liability under this Part for the base taxation year in relation to the particular month, any such overpayment that would, but for this subsection, reasonably be expected at the end of the particular month to arise during another month in relation to which the year is the base taxation year shall be deemed to arise under that subsection during the particular month and not during the other month.

• Marginal note:Non-residents and part-year residents

  (3) For the purposes of this section, unless a person was resident in Canada throughout a taxation year,

  • (a) for greater certainty, the person’s income for the year shall be deemed to be equal to the amount that would have been the person’s income for the year had the person been resident in Canada throughout the year; and

  • (b) the person’s earned income for the year shall not exceed that portion of the amount that would, but for this paragraph, be the person’s earned income that is included because of section 114 or subsection 115(1) in computing the person’s taxable income or taxable income earned in Canada, as the case may be, for the year.

• Marginal note:Effect of bankruptcy

  (3.1) For the purposes of this subdivision, where in a taxation year an individual becomes bankrupt,

  • (a) the individual’s income for the year shall include the individual’s income for the taxation year that begins on January 1 of the calendar year that includes the date of bankruptcy; and

  • (b) the total of all amounts deducted under section 63 in computing the individual’s income for the year shall include the amount deducted under that section for the individual’s taxation year that begins on January 1 of the calendar year that includes the date of bankruptcy.

  • (c) [Repealed, 1998, c. 21, s. 94]

• Marginal note:Amount not to be charged, etc.

  (4) A refund of an amount deemed by this section to be an overpayment on account of a person’s liability under this Part for a taxation year

  • (a) shall not be subject to the operation of any law relating to bankruptcy or insolvency;

  • (b) cannot be assigned, charged, attached or given as security;

  • (c) does not qualify as a refund of tax for the purposes of the Tax Rebate Discounting Act;

  • (d) cannot be retained by way of deduction or set-off under the Financial Administration Act; and

  • (e) is not garnishable moneys for the purposes of the Family Orders and Agreements Enforcement Assistance Act.

• Marginal note:Annual adjustment

  (5) Each amount expressed in dollars in subsection (1) shall be adjusted so that, where the base taxation year in relation to a particular month is after 1998, the amount to be used under that subsection for the month is the total of

  • (a) the amount that would, but for subsection 122.61(7), be the relevant amount used under subsection 122.61(1) for the month that is one year before the particular month, and

  • (b) the product obtained by multiplying

    • (i) the amount referred to in paragraph 122.61(5)(a)

    by

    • (ii) the amount, adjusted in such manner as is prescribed and rounded to the nearest one-thousandth or, where the result obtained is equidistant from 2 such consecutive one-thousandths, to the higher thereof, that is determined by the formula

      (A/B) - 1

      where

      A

      is the Consumer Price Index (within the meaning assigned by subsection 117.1(4)) for the 12-month period that ended on September 30 of the base taxation year, and

      B

      is the Consumer Price Index for the 12 month period preceding the period referred to in the description of A.

• (5.1) [Repealed, 1998, c. 21, s. 93(2)]

• Marginal note:Additions to NCB supplement — July 2005 and 2006

  (6) Each amount referred to in the description of F in subsection (1) that is to be used for the purpose of determining the amount deemed to be an overpayment arising during months that are

  • (a) after June 2005 and before July 2006, is to be replaced with the amount that is the total of $185 and the amount otherwise determined under subsection (5) for those months; and

  • (b) after June 2006 and before July 2007, is to be replaced with the amount that is the total of $185 and the amount otherwise determined, for those months, by applying subsection (5) to the amount determined under paragraph (a).

• Marginal note:Agreement with a province

  (6.1) Notwithstanding subsection (5), for the purposes of any agreement referred to in section 122.63 with respect to overpayments deemed to arise during months that are after June 2001 and before July 2002, the amount determined under subparagraph (5)(b)(ii) for a month referred to in paragraph (6)(b) is deemed to be 0.012.

• Marginal note:Rounding

  (7) Where an amount referred to in subsection 122.61(1), when adjusted as provided in subsection 122.61(5), is not a multiple of one dollar, it shall be rounded to the nearest multiple of one dollar or, where it is equidistant from 2 such consecutive multiples, to the higher thereof.