Quebec: Harmonization with the federal legislation in respect of the Quebec tax credit for childcare expenses and disability supports deduction
On January 19, 2021, the federal government proposed changes to the childcare expense deduction and the disability supports deduction.
Following up on this federal announcement, on February 26, the Quebec government has confirmed that the Quebec tax legislation will be harmonized with the proposed changes to the federal tax system to:
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suspend the application of the purpose test for the refundable tax credit for childcare expenses and for the disability supports deduction when a person has received, in the course of the year, employment insurance benefits, parental insurance benefits or government assistance amounts;
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include employment insurance and parental insurance benefits when calculating income for the disability supports deduction.
For both the Quebec and federal governments, these changes would only apply for the 2020 and 2021 taxation years.
http://www.finances.gouv.qc.ca/documents/Bulletins/en/BULEN_2021-1-a-b.pdf
Quebec: Duplication of amounts relating to COVID-19 on the RL-1 slip
In Quebec, payments relating to COVID-19 appear not only in box O with the code RS but also with code(s) O-5, O-6 or O-7 depending on the nature of the amount.
If the amount for code RS pertains only to COVID-19 payments, please make sure to enter only the amounts for codes O-6 and/or O-7 and ignore code RS.
The same is true for the Incentive Program to Retain Essential Workers benefits (code O-5). It is important to enter only the amount of code O-5 so that it is reported only on line 151 of the Quebec income tax return. Even though code RS is associated with this amount, it should not be carried over to line 154, despite the instructions for code RS.
According to Revenu Québec, taxpayers who filed their Quebec income tax returns would have entered duplicates of these amounts causing them to be taxed twice.
In order to prevent these duplicates, an error message will now be displayed in the data entry, which prevents the calculation of the return when an amount is entered in box O with code(s) O-5, O-6 and/or O-7 of the RL-1 slip and that the same amount is also entered for code RS.
