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 tax 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 or your spouse or common-law partner's RRSP in the year the AIPs are received or in the first 60 days of the following year; and
- You deduct all of the RRSP contribution on your tax return in the year the payments were received (your RRSP deduction limit must be high enough to let you do this).
Complete 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
Under proposed changes, you may have to pay a new 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 that are allocated to you for the year exceed a threshold. The threshold is 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 for 2012.
If you are subject to this new 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
Under Quebec provincial income tax legislation, you must pay a special tax equal to the provincial credit on the initial purchase of Quebec labour-sponsored venture capital corporation (LSVCC) shares, if you redeemed your shares to participate in the Home Buyers’ Plan (HBP) or the Lifelong Learning Plan (LLP), but did not purchase replacement shares within the prescribed time.
Under proposed federal changes, a similar federal tax has been introduced effective for 2012 and subsequent years.
For 2012, if you are filing a paper return, include on line 418 of Schedule 1 the total of the amounts shown in boxes F and L1, plus 60 % of box L2 of your Relevé 10 information slips. Attach a copy of your Relevé 10 slips to your return. If you have already filed your 2012 return or are filing electronically, you must request an adjustment to your return for 2012 to report this special tax and include a copy of your Relevé 10 slips.
Completing your tax 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 for 2012 (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 for 2012
- Form T1172, Additional Tax on Accumulated Income Payments From RESPs
- Schedule 1, Federal Tax
- Information Circular IC93-3R1, Registered Education Saving Plans
- Registered Education Savings Plans (RESPs)
- RRSPs and related plans
- Line 130 - Other income
- Line 229 - Other employment expenses
- Budget 2012 - Employees profit sharing plans (EPSPs)
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