Line 418 – Special taxes
Additional tax on RESP accumulated income payments
An accumulated income payment (AIP) is a payment from your registered education savings plan (RESP) that is not:
- an educational assistance payment;
- a payment to a designated educational institution in Canada;
- a refund of contributions to the subscriber or to the beneficiary;
- a transfer to another RESP; or
- repayments under a Canada Education Savings Program or a Provincial Education Savings Program.
AIPs are shown in box 040 of your T4A, Statement of Pension, Retirement, Annuity and Other Income slips. Include the total of all AIPs on line 130 of your income tax and benefit return. There is an additional tax on this amount.
However, the amount may be lowered or reduced to zero if all of the following conditions are met:
- you are the original subscriber or the spouse or common-law partner of a deceased original subscriber (if there is no other subscriber);
- you contribute, or the promoter transfers all or part of the AIPs, to your RRSP, PRPP or SPP or your spouse or common-law partner's RRSP or SPP in the year the AIPs are received or in the first 60 days of the following year; and
- you deduct all of the RRSP, PRPP or SPP contribution on your tax return in the year the payments were received.
If you received an AIP from a registered education savings plan (RESP) in 2016, you may have to pay an additional tax on all or part of the amount shown in box 040 of your T4A slips. Fill out Form T1172, Additional Tax on Accumulated Income Payments from RESPs to calculate the additional tax. For more information, see Registered Education Savings Plans (RESPs).
Tax on excess employees profit-sharing plan (EPSP) amounts
You may have to pay a tax if you are a specified employee (an employee dealing with an employer in a non-arm’s length relationship or with a significant equity interest in their employer) and contributions your employer made to an EPSP allocated to you for the year exceed a threshold equal to 20% of your employment income from the employer for the year.
For more information, and to calculate your threshold and tax payable on this excess amount, use Form RC359, Tax on Excess Employees Profit-Sharing Plan Amounts.
If you are subject to this tax, you may be eligible to claim a deduction at line 229.
Tax related to the non-purchase of replacement shares in a Quebec labour-sponsored fund
You must pay a special tax, if you redeemed your Quebec labour-sponsored fund to participate in the Home Buyers’ Plan (HBP) or the Lifelong Learning Plan (LLP), but did not purchase replacement shares within the prescribed time. Enter the amount shown in box 11 of your T5006 information slips.
If you are filing electronically, keep your T5006 information slips for your records. If you are filing a paper income tax and benefit return, attach your T5006 information slips.
If you did not report this special tax on your 2015 return, you must request an adjustment to your return for 2015.
Completing your income tax and benefit return
On line 418 of Schedule 1, enter the amount from line 10, 13, or 16 (whichever applies) from Form T1172, Additional Tax on Accumulated Income Payments from RESPs (if applicable), and the amount from line 10 from Form RC359, Tax on Excess Employees Profit-Sharing Plan Amounts (if applicable), and the amount calculated as instructed above under “Tax related to the non-purchase of replacement shares in a Quebec labour-sponsored fund.”
Forms and publications
- General Income Tax and Benefit Guide
- Guide RC4092, Registered Education Savings Plans (RESPs)
- Form RC359, Tax on Excess Employees Profit-Sharing Plan Amounts
- Form T1172, Additional Tax on Accumulated Income Payments From RESPs
- Form T5006 – Registered Labour-Sponsored Venture Capital Corporation
- Schedule 1, Federal Tax
- Information Circular IC93-3R2, Registered Education Saving Plans
- Registered Education Savings Plans (RESPs)
- RRSPs and related plans
- Line 130 – Other income
- Line 229 – Other employment expenses
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