Supplemental pension plan
Those are pension income plans or pensions that give entitlement, at
the time of retirement, to income payments over and above those provided
for under the registered pension plans.
These supplemental pension plans are used to increase the benefits provided
for under the registered pension plans or to set up a complementary plan.
Scholarships (study grants), fellowships, bursaries, and artists’ project
grants
Scholarships (study grants), fellowships and bursaries can be exempt
from tax (in full or partially) or taxable, based on their type and the
taxpayer’s financial situation. To allow Taxprep
to correctly determine the income amount that must be reported on line
13010, you must enter the scholarship amount that was received in the appropriate
box 105.
Scholarships that are non-taxable in full
The following scholarships that were received by the taxpayer during
the year are not taxable and must be reported in box 1051,
Scholarships, bursaries or fellowships – Eligible for the
full exemption:
- scholarships (study grants) and bursaries to attend
an elementary or a secondary school;
- postsecondary scholarships (study grants) bursaries or fellowships received by a taxpayer, if they relate to their enrolment in an education program for which the taxpayer is considered as a qualifying full-time student for 2020, 2021 or 2022.
Scholarships eligible for a $500 exemption
If the taxpayer is not a “qualifying student” , the postsecondary scholarships, bursaries or fellowships that they receive in the year are eligible for a $500 income tax exemption and must be entered in box 1052, Scholarships (study grants) bursaries or fellowships – Eligible for the $500 exemption.
Scholarships received in connection with a part-time program
When a scholarship, fellowship, or bursary is received in connection with a part-time program for which the taxpayer is considered as a part-time “qualifying student” for 2020,2021 or 2022, the scholarship exemption is equal to the amount of tuition paid for the program plus the costs
of program-related materials.
Such scholarships must be reported in box 1054, Scholarships (study grants) bursaries or fellowships – Received in connection with a part-time program.
In order to calculate the exempt portion of a scholarship received in connection with a part-time program, enter the tuition fees and the cost of program-related material in the worksheet of line 13010.
Artist project’s grant
If the taxpayer received an artist project’s grant, consult the folio S1-F2-C3, Scholarships, Research Grants and Other Education Assistance to
know which amount must be reported.
Lump-sum payments accrued to December 31, 1971
A taxpayer who receives a lump-sum payment out of a pension fund or a DPSP, of which they were a contributant before 1972, can elect to exclude the amount accumulated on December 31, 1971, from their income. In that case, a special averaging tax applies. Generally, this special averaging tax is at the average effective federal rate of tax applicable to the taxpayer's income for the three years immediately preceding the year in which the payment is received.
However, the program does not allow for the calculation of the special tax. In order for the taxpayer to take advantage of this measure, a note must be attached so the request can be made when filing the return and the CRA will do the necessary calculations.
Annuity Income
A taxpayer qualifying for the Eligible Pension Income Amount of $2,000 can report all or a portion of the amount in box 024 as eligible pension income. Otherwise, these amounts are considered other income.
Annuities that are taxable under paragraph 56(1)(d), net of a 60(a)
deduction, should be claimed as cumulative investment income on Form T936.
The taxpayer will generally qualify for the pension income amount if they are age 65 or over. For taxpayers who are age 64 or under, the
annuity will ONLY qualify if it
was received due to the death of a spouse.
The amount of eligible pension income is calculated in the Eligible
Pension Income Amount workchart.