VII, s. 10]
Marginal note:Overseas employment tax credit
122.3(1)If an individual is resident in Canada in a taxation year and, throughout any period of more than six consecutive months that began before the end of the year and included any part of the year (in this section referred to as the “qualifying period”)
(a)was employed by a person who was a specified employer, other than for the performance of services under a prescribed international development assistance program of the Government of Canada, and
(b)performed all or substantially all the duties of the individual’s employment outside Canada
(i)in connection with a contract under which the specified employer carried on business outside Canada with respect to
(A)the exploration for or exploitation of petroleum, natural gas, minerals or other similar resources,
(B)any construction, installation, agricultural or engineering activity, or
(C)any prescribed activity, or
(ii)for the purpose of obtaining, on behalf of the specified employer, a contract to undertake any of the activities referred to in clause 122.3(1)(b)(i)(A), 122.3(1)(b)(i)(B) or 122.3(1)(b)(i)(C),
there may be deducted, from the amount that would, but for this section, be the individual’s tax payable under this Part for the year, an amount equal to that proportion of the tax otherwise payable under this Part for the year by the individual that the lesser of
(c)an amount equal to that proportion of the specified amount for the year that the number of days
(i)in that portion of the qualifying period that is in the year, and
(ii)on which the individual was resident in Canada
is of 365, and
(d)the specified percentage for the year of the individual’s income for the year from that employment that is reasonably attributable to duties performed on the days referred to in paragraph (c)
is of
(e)the amount, if any, by which
(i)if the individual is resident in Canada throughout the year, the individual’s income for the year, and
(ii)if the individual is non-resident at any time in the year, the amount determined under paragraph 114(a) in respect of the taxpayer for the year
exceeds
(iii)the total of all amounts each of which is an amount deducted under section 110.6 or paragraph 111(1)(b), or deductible under paragraph 110(1)(d.2), (d.3), (f) or (g), in computing the individual’s taxable income for the year.
Marginal note:Specified amount
(1.01)For the purposes of paragraph (1)(c), the specified amount for a taxation year of an individual is
(a)for the 2013 to 2015 taxation years, the amount determined by the formula
[$80,000 × A/(A + B)] + [C × B/(A + B)]
where
(i)for the 2013 taxation year, $60,000,
(ii)for the 2014 taxation year, $40,000, and
(iii)for the 2015 taxation year, $20,000; and
(b)for the 2016 and subsequent taxation years, nil.
Marginal note:Specified percentage
(1.02)For the purposes of paragraph (1)(d), the specified percentage for a taxation year of an individual is
(a)for the 2013 to 2015 taxation years, the amount determined by the formula
[80% × A/(A + B)] + [C × B/(A + B)]
where
(i)for the 2013 taxation year, 60%,
(ii)for the 2014 taxation year, 40%, and
(iii)for the 2015 taxation year, 20%; and
(b)for the 2016 and subsequent taxation years, 0%.
Marginal note:Excluded income
(1.1)No amount may be included under paragraph (1)(d) in respect of an individual’s income for a taxation year from the individual’s employment by an employer
(a)if
(i)the employer carries on a business of providing services and does not employ in the business throughout the year more than five full-time employees,
(ii)the individual
(A)does not deal at arm’s length with the employer, or is a specified shareholder of the employer, or
(B)where the employer is a partnership, does not deal at arm’s length with a member of the partnership, or is a specified shareholder of a member of the partnership, and
(iii)but for the existence of the employer, the individual would reasonably be regarded as being an employee of a person or partnership that is not a specified employer; or
(b)if at any time in that portion of the qualifying period that is in the taxation year
(i)the employer provides the services of the individual to a corporation, partnership or trust with which the employer does not deal at arm’s length, and
(ii)the fair market value of all the issued shares of the capital stock of the corporation or of all interests in the partnership or trust, as the case may be, that are held, directly or indirectly, by persons who are resident in Canada is less than 10% of the fair market value of all those shares or interests.
Marginal note:Definitions
(2)In subsection 122.3(1),
specified employermeans
(a)a person resident in Canada,
(b)a partnership in which interests that exceed in total value 10% of the fair market value of all interests in the partnership are owned by persons resident in Canada or corporations controlled by persons resident in Canada, or
(c)a corporation that is a foreign affiliate of a person resident in Canada; (employeur déterminé)
tax otherwise payable under this Part for the yearmeans the amount that, but for this section, sections 120 and 120.2, subsection 120.4(2) and sections 121, 126, 127 and 127.4, would be the tax payable under this Part for the year. (impôt qu’il est par ailleurs tenu de payer pour l’année en vertu de la présente partie)
Marginal note:Definitions
122.5(1)The following definitions apply in this section.
adjusted income, of an individual for a taxation year in relation to a month specified for the taxation year, means the total of the individual’s income for the taxation year and the income for the taxation year of the individual’s qualified relation, if any, in relation to the specified month, both calculated as if in computing that income no amount were
(a)included
(i)under paragraph 56(1)(q.1) or subsection 56(6),
(ii)in respect of any gain from a disposition of property to which section 79 applies, or
(iii)in respect of a gain described in subsection 40(3.21); or
(b)deductible under paragraph 20(1)(ww) or 60(y) or (z). (revenu rajusté)
cohabiting spouse or common-law partnerof an individual at any time has the meaning assigned by section 122.6. (époux ou conjoint de fait visé)
eligible individual, in relation to a month specified for a taxation year, means an individual (other than a trust) who
(a)has, before the specified month, attained the age of 19 years; or
(b)was, at any time before the specified month,
(i)a parent who resided with their child, or
(ii)married or in a common-law partnership. (particulier admissible)
qualified dependantof an individual, in relation to a month specified for a taxation year, means a person who at the beginning of the specified month
(a)is the individual’s child or is dependent for support on the individual or on the individual’s cohabiting spouse or common-law partner;
(b)resides with the individual;
(c)is under the age of 19 years;
(d)is not an eligible individual in relation to the specified month; and
(e)is not a qualified relation of any individual in relation to the specified month. (personne à charge admissible)
qualified relationof an individual, in relation to a month specified for a taxation year, means the person, if any, who, at the beginning of the specified month, is the individual’s cohabiting spouse or common-law partner. (proche admissible)
return of income, in respect of a person for a taxation year, means
(a)for a person who is resident in Canada at the end of the taxation year, the person’s return of income (other than a return of income under subsection 70(2) or 104(23), paragraph 128(2)(e) or subsection 150(4)) that is required to be filed for the taxation year or that would be required to be filed if the person had tax payable under this Part for the taxation year; and
(b)in any other case, a prescribed form containing prescribed information that is filed for the taxation year with the Minister. (déclaration de revenu)
Marginal note:Persons not eligible individuals, qualified relations or qualified dependants
(2)Notwithstanding subsection (1), a person is not an eligible individual, is not a qualified relation and is not a qualified dependant, in relation to a month specified for a taxation year, if the person
(a)died before the specified month;
(b)is confined to a prison or similar institution for a period of at least 90 days that includes the first day of the specified month;
(c)is at the beginning of the specified month a non-resident person, other than a non-resident person who
(i)is at that time the cohabiting spouse or common-law partner of a person who is deemed under subsection 250(1) to be resident in Canada throughout the taxation year that includes the first day of the specified month, and
(ii)was resident in Canada at any time before the specified month;
(d)is at the beginning of the specified month a person described in paragraph 149(1)(a) or (b); or
(e)is a person in respect of whom a special allowance under theChildren’s Special Allowances Actis payable for the specified month.
Marginal note:Deemed payment on account of tax
(3)An eligible individual in relation to a month specified for a taxation year who files a return of income for the taxation year is deemed to have paid during the specified month on account of their tax payable under this Part for the taxation year an amount equal to ¼ of the amount, if any, determined by the formula
A - B
where
(a)$213,
(b)$213 for the qualified relation, if any, of the individual in relation to the specified month,
(c)if the individual has no qualified relation in relation to the specified month and is entitled to deduct an amount for the taxation year under subsection 118(1) because of paragraph (b) of the description of B in that subsection in respect of a qualified dependant of the individual in relation to the specified month, $213,
(d)$112 times the number of qualified dependants of the individual in relation to the specified month, other than a qualified dependant in respect of whom an amount is included under paragraph (c) in computing the total for the specified month,
(e)if the individual has no qualified relation and has one or more qualified dependants, in relation to the specified month, $112, and
(f)if the individual has no qualified relation and no qualified dependant, in relation to the specified month, the lesser of $112 and 2% of the amount, if any, by which the individual’s income for the taxation year exceeds $6,911; and
Marginal note:COVID-19 — additional deemed payment
(3.001)An eligible individual in relation to a month specified for a taxation year who files a return of income for the taxation year is deemed to have paid during the specified month on account of their tax payable under this Part for the taxation year an amount determined by the formula
A − B − C
where
(a)$580,
(b)$580 for the qualified relation, if any, of the individual in relation to the specified month,
(c)if the individual has no qualified relation in relation to the specified month and is entitled to deduct an amount for the taxation year under subsection 118(1) because of paragraph (b) of the description of B in that subsection in respect of a qualified dependant of the individual in relation to the specified month, $580,
(d)$306 times the number of qualified dependants of the individual in relation to the specified month, other than a qualified dependant in respect of whom an amount is included under paragraph (c) in computing the total for the specified month,
(e)if the individual has no qualified relation and has one or more qualified dependants, in relation to the specified month, $306, and
(f)if the individual has no qualified relation and no qualified dependant, in relation to the specified month, the lesser of $306 and 2% of the amount, if any, by which the individual’s income for the taxation year exceeds $9,412;
Marginal note:Additional deemed payment
(3.002)An eligible individual in relation to a month specified for a taxation year who files a return of income for the taxation year is deemed to have paid during the specified month on account of their tax payable under this Part for the taxation year an amount determined by the formula
0.25 × (A – B) – C
where
(a)$918,
(b)$918 for the qualified relation, if any, of the individual in relation to the specified month,
(c)if the individual has no qualified relation in relation to the specified month and is entitled to deduct an amount for the taxation year under subsection 118(1) because of paragraph (b) of the description of B in that subsection in respect of a qualified dependant of the individual in relation to the specified month, $918,
(d)$483 times the number of qualified dependants of the individual in relation to the specified month, other than a qualified dependant in respect of whom an amount is included under paragraph (c) in computing the total for the specified month,
(e)if the individual has no qualified relation and has one or more qualified dependants, in relation to the specified month, $483, and
(f)if the individual has no qualified relation and no qualified dependant, in relation to the specified month, the lesser of $483 and 6% of the amount, if any, by which the individual’s income for the taxation year exceeds $9,919;
Marginal note:Shared-custody parent
(3.01)Notwithstanding subsection (3), if an eligible individual is a shared-custody parent (within the meaning assigned by section 122.6, but with the wordsqualified dependantin that section having the meaning assigned by subsection (1)) in respect of one or more qualified dependants at the beginning of a month, the amount deemed by subsection (3) to have been paid during a specified month is equal to the amount determined by the following formula:
1/2 × (A + B)
where
Marginal note:COVID-19 — shared-custody parent
(3.02)Notwithstanding subsection (3.001), if an eligible individual is ashared-custody parent(within the meaning assigned by section 122.6, but with the wordsqualified dependantin that section having the meaning assigned by subsection (1)) in respect of one or more qualified dependants at the beginning of a month, the amount deemed by subsection (3.001) to have been paid during the specified month is equal to the amount determined by the following formula:
0.5(A + B)
where
Marginal note:Additional deemed payment — shared-custody parent
(3.03)Notwithstanding subsection (3.002), if an eligible individual is ashared-custody parent(within the meaning assigned by section 122.6, but with the wordsqualified dependantin that section having the meaning assigned by subsection (1) in respect of one or more qualified dependants at the beginning of a month, the amount deemed by subsection (3.002) to have been paid during the specified month is equal to the amount determined by the following formula:
0.5 × (A + B)
where
Marginal note:When advance payment applies
(3.1)Subsection (3.2) applies in respect of an eligible individual in relation to a particular month specified for a taxation year, and each subsequent month specified for the taxation year, if
(a)the amount deemed by that subsection to have been paid by the eligible individual during the particular month specified for the taxation year is less than $50; and
(b)it is reasonable to conclude that the amount deemed by that subsection to have been paid by the eligible individual during each subsequent month specified for the taxation year will be less than $50.
Marginal note:Advance payment
(3.2)If this subsection applies, the total of the amounts that would otherwise be deemed by subsection (3) to have been paid on account of the eligible individual’s tax payable under this Part for the taxation year during the particular month specified for the taxation year, and during each subsequent month specified for the taxation year, is deemed to have been paid by the eligible individual on account of their tax payable under this Part for the taxation year during the particular specified month for the taxation year, and the amount deemed by subsection (3) to have been paid by the eligible individual during those subsequent months specified for the taxation year is deemed, except for the purpose of this subsection, not to have been paid to the extent that it is included in an amount deemed to have been paid by this subsection.
Marginal note:Months specified
(4)For the purposes of this section, the months specified for a taxation year are July and October of the immediately following taxation year and January and April of the second immediately following taxation year.
Marginal note:COVID-19 — month specified
(4.1)Notwithstanding subsection (4) and for the purposes of this section, the month specified in subsection (3.001) is May 2020 (or an earlier month designated by the Minister) and the taxation year is the 2018 taxation year.
Marginal note:Month specified
(4.2)Notwithstanding subsection (4) and for the purposes of this section, the month specified in subsection (3.002) is October 2022 and the taxation year is the 2021 taxation year.
Marginal note:Only one eligible individual
(5)If an individual is a qualified relation of another individual in relation to a month specified for a taxation year and both those individuals would be, but for this subsection, eligible individuals in relation to the specified month, only the individual that the Minister designates is the eligible individual in relation to the specified month.
(5.1)[Repealed, 2002, c. 9, s. 38(2)]
Marginal note:Exception re qualified dependant
(6)If a person would, if this Act were read without reference to this subsection, be the qualified dependant of two or more individuals, in relation to a month specified for a taxation year,
(a)the person is deemed to be a qualified dependant, in relation to that month, of the one of those individuals on whom those individuals agree;
(b)in the absence of an agreement referred to in paragraph (a), the person is deemed to be, in relation to that month, a qualified dependant of the individuals, if any, who are, at the beginning of that month, eligible individuals (within the meaning assigned by section 122.6, but with the wordsqualified dependantin that section having the meaning assigned by subsection (1)) in respect of that person; and
(c)in any other case, the person is deemed to be, in relation to that month, a qualified dependant only of the individual that the Minister designates.
Marginal note:Notification to Minister
(6.1)An individual shall notify the Minister of the occurrence of any of the following events before the end of the month following the month in which the event occurs:
(a)the individual ceases to be an eligible individual;
(b)a person becomes or ceases to be the individual’s qualified relation; and
(c)a person ceases to be a qualified dependant of the individual, otherwise than because of attaining the age of 19 years.
Marginal note:Non-residents and part-year residents
(6.2)For the purpose of this section, the income of a person who is non-resident at any time in a taxation year is deemed to be equal to the amount that would, if the person were resident in Canada throughout the year, be the person’s income for the year.
Marginal note:Effect of bankruptcy
(7)For the purpose of this section, if in a taxation year an individual becomes bankrupt, the individual’s income for the taxation 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.
Marginal note:Definitions
122.51(1)The definitions in this subsection apply in this section.
adjusted incomeof an individual for a taxation year has the meaning assigned by section 122.6. (revenu modifié)
eligible individualfor a taxation year means an individual (other than a trust)
(a)who is resident in Canada throughout the year (or, if the individual dies in the year, throughout the portion of the year before the individual’s death);
(b)who, before the end of the year, has attained the age of 18 years; and
(c)the total of whose incomes for the year from the following sources is at least $2,500:
(i)offices and employments (computed without reference to paragraph 6(1)(f)),
(ii)businesses each of which is a business carried on by the individual either alone or as a partner actively engaged in the business, and
(iii)the program established under theWage Earner Protection Program Act. (particulier admissible)
Marginal note:Deemed payment on account of tax
(2)Where a return of income (other than a return of income filed under subsection 70(2), paragraph 104(23)(d) or 128(2)(e) or subsection 150(4)) is filed in respect of an eligible individual for a particular taxation year that ends at the end of a calendar year, there is deemed to be paid at the end of the particular year on account of the individual’s tax payable under this Part for the particular year the amount determined by the formula
A - B
where
(a)$1000, and
(b)the total of
(i)the amount determined by the formula
(0.25/C) × D
where
(ii)25% of the total of all amounts each of which is the amount deductible under section 64 in computing the individual’s income for a taxation year that ends in the calendar year; and
(a)the total of all amounts each of which is the individual’s adjusted income for a taxation year that ends in the calendar year
exceeds
(b)$21,663.
Marginal note:Definitions
122.6In this Subdivision,
adjusted earned income[Repealed, 1998, c. 21, s. 92]
adjusted income, of an individual for a taxation year, means the total of all amounts each of which would be the income for the year of the individual or of the person who was the individual’s cohabiting spouse or common-law partner at the end of the year if in computing that income no amount were
(a)included
(i)under paragraph 56(1)(q.1) or subsection 56(6),
(ii)in respect of any gain from a disposition of property to which section 79 applies, or
(iii)in respect of a gain described in subsection 40(3.21), or
(b)deductible under paragraph 20(1)(ww) or 60(y) or (z); (revenu modifié)
base taxation yearin relation to a month means
(a)where the month is any of the first 6 months of a calendar year, the taxation year that ended on December 31 of the second preceding calendar year, and
(b)where the month is any of the last 6 months of a calendar year, the taxation year that ended on December 31 of the preceding calendar year; (année de base)
cohabiting spouse or common-law partnerof an individual at any time means the person who at that time is the individual’s spouse or common-law partner and who is not at that time living separate and apart from the individual and, for the purpose of this definition, a person shall not be considered to be living separate and apart from an individual at any time unless they were living separate and apart at that time, because of a breakdown of their marriage or common-law partnership, for a period of at least 90 days that includes that time; (époux ou conjoint de fait visé)
earned income[Repealed, 1998, c. 21, s. 92]
eligible individualin respect of a qualified dependant at any time means a person who at that time
(a)resides with the qualified dependant,
(b)is a parent of the qualified dependant who
(i)is the parent who primarily fulfils the responsibility for the care and upbringing of the qualified dependant and who is not a shared-custody parent in respect of the qualified dependant, or
(ii)is a shared-custody parent in respect of the qualified dependant,
(c)is resident in Canada or, where the person is the cohabiting spouse or common-law partner of a person who is deemed under subsection 250(1) to be resident in Canada throughout the taxation year that includes that time, was resident in Canada in any preceding taxation year,
(d)is not described in paragraph 149(1)(a) or 149(1)(b), and
(e)is, or whose cohabiting spouse or common-law partner is, a Canadian citizen or a person who
(i)is a permanent resident within the meaning of subsection 2(1) of theImmigration and Refugee Protection Act,
(ii)is a temporary resident within the meaning of theImmigration and Refugee Protection Act, who was resident in Canada throughout the 18 month period preceding that time,
(iii)is a protected person within the meaning of theImmigration and Refugee Protection Act,
(iv)was determined before that time to be a member of a class defined in theHumanitarian Designated Classes Regulationsmade under theImmigration Act, or
(v)is an Indian within the meaning of theIndian Act,
and for the purposes of this definition,
(f)where the qualified dependant resides with the dependant’s female parent, the parent who primarily fulfils the responsibility for the care and upbringing of the qualified dependant is presumed to be the female parent,
(g)the presumption referred to in paragraph 122.6 eligible individual (f) does not apply in prescribed circumstances,
(h)prescribed factors shall be considered in determining what constitutes care and upbringing, and
(i)an individual shall not fail to qualify as a parent (within the meaning assigned by section 252) of another individual solely because of the receipt of a social assistance amount that is payable under a program of the Government of Canada, the government of a province or anIndigenous governing body(as defined in section 2 of theChildren’s Special Allowances Act) for the benefit of the other individual; (particulier admissible)
qualified dependantat any time means a person who at that time
(a)has not attained the age of 18 years,
(b)is not a person in respect of whom an amount was deducted under paragraph (a) of the description of B in subsection 118(1) in computing the tax payable under this Part by the person’s spouse or common-law partner for the base taxation year in relation to the month that includes that time, and
(c)is not a person in respect of whom a special allowance under theChildren’s Special Allowances Actis payable for the month that includes that time; (personne à charge admissible)
return of incomefiled by an individual for a taxation year means
(a)where the individual was resident in Canada throughout the year, the individual’s return of income (other than a return of income filed under subsection 70(2) or 104(23), paragraph 128(2)(e) or subsection 150(4)) that is filed or required to be filed under this Part for the year, and
(b)in any other case, a prescribed form containing prescribed information, that is filed with the Minister; (déclaration de revenu)
shared-custody parentin respect of a qualified dependant at a particular time means, where the presumption referred to in paragraph (f) of the definitioneligible individualdoes not apply in respect of the qualified dependant, an individual who is one of the two parents of the qualified dependant who
(a)are not at that time cohabitating spouses or common-law partners of each other,
(b)reside with the qualified dependant either
(i)at least 40% of the time in the month in which the particular time occurs, or
(ii)on an approximately equal basis, and
(c)primarily fulfil the responsibility for the care and upbringing of the qualified dependant when residing with the qualified dependant, as determined in consideration of prescribed factors. (parent ayant la garde partagée)
Marginal note:Deemed overpayment
122.61(1)If a person and, if 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
(A + M)/12
where
E − Q
where
(a)the product obtained by multiplying $6,400 by the number of qualified dependants in respect of whom the person was an eligible individual at the beginning of the month who have not reached the age of six years at the beginning of the month, and
(b)the product obtained by multiplying $5,400 by the number of qualified dependants, other than those qualified dependants referred to in paragraph (a), in respect of whom the person was an eligible individual at the beginning of the month, and
(a)if the person’s adjusted income for the year is less than or equal to $30,000, nil,
(b)if the person’s adjusted income for the year is greater than $30,000 but less than or equal to $65,000, and if the person is, at the beginning of the month, an eligible individual in respect of
(i)only one qualified dependant, 7% of the person’s adjusted income for the year in excess of $30,000,
(ii)only two qualified dependants, 13.5% of the person’s adjusted income for the year in excess of $30,000,
(iii)only three qualified dependants, 19% of the person’s adjusted income for the year in excess of $30,000, or
(iv)more than three qualified dependants, 23% of the person’s adjusted income for the year in excess of $30,000, and
(c)if the person’s adjusted income for the year is greater than $65,000, and if the person is, at the beginning of the month, an eligible individual in respect of
(i)only one qualified dependant, the total of $2,450 and 3.2% of the person’s adjusted income for the year in excess of $65,000,
(ii)only two qualified dependants, the total of $4,725 and 5.7% of the person’s adjusted income for the year in excess of $65,000,
(iii)only three qualified dependants, the total of $6,650 and 8% of the person’s adjusted income for the year in excess of $65,000, or
(iv)more than three qualified dependants, the total of $8,050 and 9.5% of the person’s adjusted income for the year in excess of $65,000,
N – O
where
(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, and
(a)if the person’s adjusted income for the year is less than or equal to $65,000, nil, and
(b)if the person’s adjusted income for the year is greater than $65,000,
(i)where the person is an eligible individual in respect of only one qualified dependant described in N, 3.2% of the person’s adjusted income for the year in excess of $65,000, and
(ii)where the person is an eligible individual in respect of two or more qualified dependants described in N, 5.7% of the person’s adjusted income for the year in excess of $65,000.
Marginal note:COVID-19 — additional amount
(1.01)If the month referred to in subsection (1) is May 2020, each amount expressed in dollars referred to in paragraphs (a) and (b) of the description of E in subsection (1) is deemed, for that month, to be equal to that amount (as adjusted under subsection (5)) plus an additional amount of $3,600