Common Adjustments Made to Your Tax Return

By Randall Orser | Personal Income Tax

Every year Canada Revenue Agency (CRA), adjust returns for various reasons, and many of the adjustments are because you, the taxpayer, didn’t respond to their requests for more information, or the information you did submit was incorrect according to what they’ve received from your employer, etc. Here’s just a few tips on how to reduce the number of adjustments CRA could make on your return.

No reply received

If you do not provide the information requested within the timeframe indicated on the letter, CRA will deny or modify your claim based on the information available to them. If your tax return has been selected for review by one of CRA’s review programs, they will first try to verify your claim based on the information that’s on file. If more information is needed, a representative from one of the tax centres will contact you or your authorized representative by telephone or in writing.

When responding to a request from CRA for more information, be sure to:

  • include the reference number found at the upper right corner of the letter;
  • send your reply and all requested documents to the address in the letter within the time frame indicated;
  • provide all receipts and/or other documents requested.

Change of address

Due to possible changes to your mailing address during the year, CRA’s mail may unknowingly be misdirected. This could result in your claim being disallowed resulting in an amount owing. Therefore, always make sure the CRA has your current mailing address.

The easiest way to do this is go into My Account or the MyCRA mobile app and select “Manage Contact Info”. Yes, they have an app now too. You can also call 1-800-959-8281, however, be prepared with your latest filed tax return, SIN, etc.

Of course, you can avoid worrying about mail completely by signing up for direct deposit for all refunds, credits, etc. And, use their Online Mail via My Account so you never have to worry about postal service disruptions or lost/stolen mail.

What if you don’t have all your information slips?

Do not delay filing an income tax return because of missing T4s or other information slips. If you cannot get the missing slip(s) by the filing due date, use your pay stubs or statements to estimate your income and any related deductions and credits you may be eligible to claim. Usually, the last paystub for the year has all the pertinent information to file your taxes.

If your return is selected for review, all requested receipts and supporting documents have to be provided at that time. If they are not provided within the set timeframe, your claim may be reduced or disallowed. Slips are prepared by your employer, payer, or administrator. You should have received most of your slips and receipts by the end of February. However, T3, and T5013 slips do not have to be sent before the end of March. If you have not received, or have lost or misplaced a slip for the current year, you have to ask your employer, or the issuer of the slip, for a copy. Note that your employer must provide you a copy of your T4 upon request and at no charge.

You can also use My Account to get copies of all slips filed in your name, including RRSP contributions.

Documents in a foreign language

If you are submitting documents in a foreign language, you will need to provide a copy of the original documents and a certified English or French translation to the CRA.

The translation has to be certified by an official who has the authority to administer an oath or solemn declaration (commissioner of oaths, notary public, or lawyer) unless it has been completed by a translator who is a member in good standing of one of the provincial or territorial organizations of translators and interpreters of Canada. The signatory’s name has to be printed in the Latin alphabet.

Other deductions – Line 232

Use this line to claim allowable amounts not deducted anywhere else on this return. Specify the type of deduction that you are claiming in the space to the left of line 232.

Various non-deductible items such as funeral expenses, wedding expenses, loans to family members, a loss on the sale of a home, and other similar amounts are sometimes claimed in error at this line and then disallowed. If you would like additional information on whether a particular expense is deductible at this line or not, talk to your tax preparer or CRA.

Legal fees incurred in employment wage disputes are one item that would go on this line. Note only legal fees incurred for wage disputes can be claimed.

Northern Residents’ deductions – Line 255

If you resided in a prescribed northern or intermediate zone, on a permanent basis, for a continuous period of at least six months, you may be able to claim the northern residents’ deductions. There are two deductions possible, a residency deduction for having lived in a prescribed zone, and a deduction for travel benefits for medical or other travel that you received from employment in a prescribed zone that was included in your income. This continuous six-month period can begin or end in the tax year.

When completing Form T2222, Northern Residents Deductions, you have to clearly indicate the full address where you resided in a prescribed zone and not simply a post office box number. A travel itinerary or other proof of travel, including the receipts for accommodations may be required to support the travel part of a claim.

You are not eligible to claim the additional residency amount if another person has claimed the basic residency amount for the same period and dwelling.

Tuition fees – Line 320 of Schedule 11

Schedule 11, Tuition, Education, and Textbook Amounts, has to be filed with the student’s income tax return and not with the income tax and benefit return of any individual designated by the student to claim the transfer of tuition, education, and textbook amounts.

Fees for non-credit courses or courses that are below the post-secondary level are not deductible. This includes courses such as driver’s education, academic upgrading, or English or French as a second language. The tuition receipt provided by the educational institution has to clearly identify the name and academic level of the course or program, otherwise your claim may be disallowed.

Fees for courses that provide or improve skills in an occupation are deductible if taken at an educational institution certified by Employment and Social Development Canada.

Claims have to be based on fees for a period during the calendar year, not the academic year. Fees that were reimbursed to you or to a parent or spouse on your behalf cannot be claimed unless the reimbursed amount is included in income. Only the eligible tuition fees minus the amount received as a tuition reimbursement can be deducted.

If supporting documents are requested, ensure that the official receipt is issued by the educational institution is submitted.

Education and textbook amounts – Lines 321 and 322 of Schedule 11

You can claim only one education and textbook amount for each eligible month, either the full-time amount or the part-time amount.

Claims have to be based on the calendar year, not the academic year. You cannot claim the education and textbook amounts if the tuition fees paid for the course were reimbursed to you or to another person on your behalf. This applies whether or not the reimbursed tuition was added into income.

If supporting documents are requested, ensure the official receipt issued by the educational institution is submitted. The number of months claimed has to agree with the number of months indicated on the T2202A, TL11A, TL11B, or TL11C.

Medical expenses – Lines 330 and 331 of Schedule 1

Prescription drugs

Amounts paid for vitamins, supplements, or similar medicaments are not deductible even if prescribed by a medical practitioner and recorded by a pharmacist.

Ensure that receipts are dated, indicate “paid”, and that the type of goods or services received is clearly identified. It can also be helpful to provide a list or summary of your expenses, including a clear indication of whether any part of certain expenses was reimbursed to you (for example, through an insurance plan).

Attendant care or care in an establishment

Generally, you can claim the entire amount paid in a nursing home (full-time). In all other cases, the fees claimed have to be for salaries and wages paid for attendant care services.

Attendant care expenses may be eligible as medical expenses (line 330 and line 331) and for the disability supports deduction (line 215). The total you claim cannot be more than the total amount paid. Special rules apply when claiming medical expenses as well as the disability tax credit or the attendant care expenses.

To claim attendant care expenses paid to an establishment, you have to send us a detailed breakdown from the establishment that clearly shows the amounts paid for staff salaries that apply to the attendant care services.

The above are the most common items adjusted on your tax return, and why they’re adjusted is usually the lack of your response, or not providing the correct information in a timely fashion. Fortunately, the CRA is making it easier for people to gather the information, at least that which is filed with them. Just remember to keep your slips and receipts for at least six years, and you’ll be fine.

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