There’s Gold in Your Past Years’ Tax Returns

April 10, 2012 by  Filed under: Taxes 

Like many Canadians, you probably have not taken advantage of all tax refunds and credits to which you are entitled. There are a spate of programs offered by Canada Revenue Agency to which you are entitled. Most Canadians are also unaware that under the Taxpayer relief provisions, taxpayers can go back 10 years to recover legitimate tax credits and refunds. Let us take an in depth look at some of these items.

The first item I would like to discuss is the eligible dependent tax credit. This was formerly called the equivalent to married deduction and closely approximated the amount one could claim for a spouse that was fully dependent on the taxpayer and who had no income. To be eligible for the deduction one must be single, separated or divorced and supported a minor child and who lived with the taxpayer “at any time in the year”. The implications are that this non refundable tax credit can be claimed by a person in the year of divorce, separation or death. The credit has both a federal and a Provincial component. For residents of Ontario, the amount of the credit is 15% of the actual amount (Federal) and 6.02% of the amount (Provincial). For 2011, the maximum credit would be 15% x $10,000 and 6.02% X $10,000 or approximately $2,100 in tax savings. This would almost certainly generate an actual cash refund and the result could be a true bonanza if multiple years were involved.

In order to claim this credit for past years a person would fill out an amended Tax return on form T1-ADJ for the tax year(s) in question. CRA may ask for evidence of a marriage breakdown such as a separation agreement, payment of spousal support, or payment of child support. As an aside payments of spousal support after May1, 1997 are tax deductible while child support payments are not.

To apply for retroactive credits within the last three years is not an issue with CRA. Any requests beyond three years are allowed but one must go under the Taxpayer Relief provisions. This will require the expertise of a tax professional. The amount refunded is not taxable to the recipient nor will it affect the Child tax benefit which in the majority of cases is claimed by the mother of the dependent. Only one claim per child can be made by the supporting parties. If more than one dependent is involved, the claimants should determine beforehand who will claim which dependent. It is more advantageous to claim the younger dependent because the claim can be made for more years than if an older dependent is claimed. Moreover, both parties who have suffered a breakdown in a marital relationship can benefit from the eligible dependent tax credit.

Marvin Zeavin is a former employee of Canada Revenue Agency holding positions of Auditor, Technical Advisor and Appeals officer.
He has a tax consulting practice and recently has opened a tax recovery business.
He is based in Toronto, Ontario, Canada and can be reached at (905) 604-3505; fax: (905) 415-7705.
His websites are:

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