What's new for T1/T2 version 7.01?

The latest DT Max program update v7.01 is now available for downloading.

This version of DT Max contains the T1/TP1 program for years 1996 to 2003. It allows for paper filing of T1/TP1 returns but it does not include EFILE due to its early release date.

Version 7.01 also includes the T2 program for fiscal periods 1994 to 2004 and supports corporation Internet filing and Ontario CT23 D-file.

DT Max T1

Tax Highlights

Federal

• The T1 forms incorporated in this 2003 release are fully certified by the CRA.
• The automatic calculation of pensionable earnings has been removed from preferences.
• Taxpayers interested in calculating CPP/QPP on other employment income must use the keyword CPP-Elect-OV (QPP-Elect-OV).

Quebec

• The TP1 forms incorporated in this 2003 release are fully certified by the MRQ.
• There has been a change to the definition of "spouse on December 31, 2003". Wherever the term is used, it refers to the person who was the spouse on that date. If one of the spouses dies in 2003, they are still considered to be your spouse on December 31, 2003, provided the surviving spouse does not have a new spouse on that date. This change will affect the status of the couple, as well as some of the calculations on schedules B, C and K.
• The annual contribution to the Quebec prescription drug insurance plan has been increased from $422 to $460 effective July 1st, 2003. However, the maximum contribution for 2003 is $441.
• The input of the drug insurance plan coverage is mandatory for 2003. As requested by the government, DT Max will no longer automatically calculate the amount for drug insurance if the keyword is left blank.
• Beginning in 2003, couples on December 31 are no longer required to file returns under the simplified tax system in order to have non-refundable tax credits transferred from one spouse to the other (line 440). For non-refundable tax credits to be transferred both spouses must file a tax return.
• A capital gains exemption respecting qualified fishing property has been introduced. This measure applies to qualified fishing property disposed of after December 10, 2002 and is only an exemption on the Quebec tax return.

Other Jurisdictions

• The calculation of provincial additional tax for minimum tax purposes is now completed on forms 428.
• The Ontario minimum tax carryover can be calculated using form T1219-ON.
• The Ontario equity in education tax credit has been eliminated for the 2003 tax year.
• Manitoba now has its own provincial non-refundable tax credits. The rules for claiming them are the same as the rules for the federal non-refundable tax credits.
• A community enterprise development tax credit has been introduced for Manitoba resident investors.
• A new Small Business Investor Tax Credit has been introduced to provide a 30% non-refundable tax credit of up to $15,000 per year to New Brunswick investors who invest in eligible small businesses in the province.
• The disability amount for Newfoundland and Labrador residents has been increased to $5,000, and there is a new disability supplement of $2,353 for persons under 18 years of age. There is also a new non-refundable tax credit that applies to the principal portion of payments on Newfoundland and Labrador student loans.
• There is a new non-refundable tax credit for Prince Edward Island teachers. An amount of up to $500 can now be claimed for expenses incurred in purchasing specified school supplies.
• Members of the Ta'an Kwach'an settlement lands may now claim the Yukon First Nations income tax credit.

New keywords

• Use the keyword Teacher to enter the amount of expenses incurred by a teacher to purchase specified school supplies with their own funds. This tax credit can only be claimed by residents of Prince Edward Island.
• Use CED-TaxCr to claim the community enterprise development tax credit for Manitoba resident investors. The credit is shown on slip T2CEDTC(MAN).
• Use the keyword LOAN-PRINCIPAL to enter the amount of principal paid on a student loan under the Canada Student Loans Act. The student loan tax credit for Newfoundland and Labrador residents will be calculated by multiplying the principal amount paid by the rate determined.
• Use the keyword Proceeds-Disp to enter the proceeds of disposition or the settlement amount from box 21 of the T5008 slip or RL-18. The T5008 slip does not show the amount to be included in the taxpayer's income. This amount must be calculated by subtracting the cost of acquisition from the proceeds of disposition.
• Use the keyword Cost-Value to enter the adjusted cost base of the securities disposed of. This amount may be found in T5008 box 20.

Forms under review

At the time of release, the government had just recently published the following forms. They should not be used unless otherwise noted.

• T1 Federal Tax forms (Non-Resident)
• Schedule B - Allowable amount of non refundable tax credits
• Schedule C - Electing under section 217 of the income tax act
• T1170 - Capital gains on gifts of certain capital property
• TP-231 - Capital gain resulting from the donation of certain property
• TP-772 - Foreign tax credit

Obsolete forms

• NB 479 - New Brunswick Credits
• T1219 - Provincial and Territorial Alternative Minimum tax
• T1238 - Equity in Education Tax Credit (EETC)

Reminders

• If filing a paper return, please note that only form TPF-1.W-V Keying Summary for the Income Tax Return is required. Do not submit either jacket (general or simplified) to the MRQ.
• As always, we strongly recommend that you verify your carry forwards carefully before processing client files.
• Forms stamped with "Preliminary" on the top cannot be processed. These forms were not available from the government and therefore have not been updated for this version.

DT Max T2

New Features

• For corporate tax planning purposes, DT Max now offers the option to display a tax planning summary for the federal, Quebec, Ontario and Alberta jurisdictions. Where data exists, users can view information for the current taxation year production and 6 tax plans all on one page.
• Due to this new feature, there are certain fields on the comparative summary for the column 2003 that will not appear when doing a 2004 taxation year-end. This will be fixed in a future version.

Program certification

Federal

• DT Max is fully certified for both RSI's, and corporate Internet filing under the CRA's new specifications. Users can file returns with year-ends up to April 30, 2004.
• Please note that CRA will terminate Corporate Efile services December 31, 2003. As such DT Max will no longer support this feature within version 7.01. Former Corporate EFILE users are invited to file their income tax returns using the new Corporation Internet Filing option.

Manitoba

• DT Max is newly certified under the specifications of Manitoba Finance Taxation with respect to the Corporation Capital Tax Return.

Ontario

• DT Max is newly certified under the new specifications of the Ontario Ministry of Finance with respect to the 2003 CT23 (short and long form).
• On November 24, 2003, the Ontario government introduced the Fiscal Responsibility Act, 2003, Bill 2, which proposed the following corporate tax changes:
• Increasing the general corporate tax rate to 14%
• Increasing the tax credit for income from M&P, mining, logging, farming and fishing to 2%, thus increasing the tax rate on this type of income to 12%
• Maintaining the small business tax rate at 5.5%
• Increasing the business limit to increase the income eligible for the small business rate to 400,000

These above-mentioned changes will affect corporations with a taxation year that ends after December 31, 2003. They are not incorporated into this version. The Ontario Ministry of Finance did not provide consent for implementation of these changes since finalized forms were unavailable.

Federal forms

New forms

• The notes to the financial statements will no longer appear on RSI schedule 100. The notes will now be seen on a new form called Notes to the Financial Statements, which has been implemented in this version of DT Max.

Updated/Revised

• Capital Dividend Account Balance
• T2 Corporation Income Tax Return
• Schedule 5 - Tax Calculation Supplementary
• Schedule 7 - Calculation of Aggregate Investment Income and Active Business Income
• Schedule 8 supplementary - Reconciliation of fixed assets
• Schedule 12 - Resource-related Deductions
• Schedule 23 - Agreement Among Associated CCPC's to Allocate the Business Limit
• Schedule 27 - Calculation of Canadian M&P Profits Deduction
• Schedule 31 - Investment Tax Credit
• Schedule 43 - Calculation of Parts IV.1 and VI.1 Taxes
• Schedule 48 - Claiming a Film or Video Production Services Tax Credit
• Schedule 49 - Agreement Among Associated CCPC's to Allocate the Expenditure Limit
• Schedule 70 - Active Business Income for the Purposes of the Accelerated Tax Reduction for Corporations with Specified Partnership Income
• Schedule 342 - Nova Scotia Tax on Large Corporations
• Schedule 360 - New Brunswick R&D Tax Credit
• Schedule 366 - New Brunswick Corporation Tax Calculation
• Schedule 381 - Manitoba M&P Tax Credit
• Schedule 383 - Manitoba Corporation Tax Calculation
• Schedule 411 - Saskatchewan Corporation Tax Calculation
• Schedule 422 - British Columbia Film and Television Tax Credit
• Schedule 423 - British Columbia Production Services Tax Credit
• Schedule 427 - British Columbia Corporation Tax Calculation
• Schedule 441 - Yukon Mineral Exploration Tax Credit

Obsolete forms

• Schedule 80 - Industry Canada - Annual Return - Canada Business Corporations Act
• Schedule 81 - Notice of Change of Directors - Canada Business Corporations Act

These schedules are not included in this version of DT Max. Corporations Canada Branch of Industry Canada, and the CRA have decided to discontinue the joint Annual Return/Corporation Income Tax Return filing option. If the corporation needs to file either of these schedules, they must use Corporations Canada Electronic Filing Centre (http://www.strategis.ic.gc.ca/corporations).

Ontario forms

New forms

• Schedule 591 - Capital Tax Election of Associated Group Agreement for Allocation of $5,000,000 Exemption

Updated/Revised

• 2003 CT23 Short-Form Corporations Tax Annual Return
• 2003 CT23 Corporations Tax and Annual Return
• Schedule 17 - Additional Deduction for Credit Unions
• Schedule 18 - Ontario Capital Gains Refund
• Schedule 111 - Ontario Foreign Tax Credit

Manitoba forms

Updated/Revised

• Manitoba Corporation Capital Tax Return

Obsolete forms

• Declaration of Exemption from Corporation Capital Tax

Quebec forms

Updated/Revised

• CO-771-V - Calculation of the Income Tax of a Corporation

New keywords

• The keyword ELECT-EXEMPT in the RelatedParty group can be used to make an election to file Ontario schedule 591, under CTA subsection 69(2.1).
• Use the keyword ONT-ALLOC.RE in the RelatedParty group to enter the previous year's Ontario allocation for purposes of the schedule 591 net deduction calculation.
• Use the keyword ONT-ALLOC in the CorpHistory group to enter the previous year's Ontario allocation for purposes of the schedule 591 net deduction calculation
• Use the keyword NET-ALLOC in the RelatedParty group to enter the allocation of net deduction to claim for the associated corporation for purposes of Ontario schedule 591.
• The keyword Contribution.b in the Book-Publish group can be used to enter the amount of book publishing industry development program contribution to obtain the British Columbia book publishing tax credit which will appear on federal schedule 5.
• Use the keyword Days-Photo found in the Cred-Film group to enter the total number of days of principal photography in British Columbia outside of the designated Vancouver area, as well as the total number of days of principal production in B.C. This information is needed on federal schedules 422 and 423.
• Use the keyword NAME.F in the Cred-Film group to enter the name of the corporation from the accreditation certificate, if other than the corporation's legal name. This information is needed on federal schedules 422 and 423.
• Use the keyword Title-Cert in the Cred-Film group to enter the title of the production from the accreditation certificate, if other than the actual title of the production for federal schedules 422 and 423.
• Use the keyword Labour-Exp.f in the Cred-Film group to indicate the type of labour expenditures that were incurred in the year.
• Use the keyword Associated in the CorpHistory group to indicate if the corporation was associated with another corporation in a prior year in order to calculate the large corporation tax on line 415 of the T2 return (schedule 200).
• Use the keyword FARMING.R&;D in the SR&;ED group to indicate that the corporation has paid a contribution to an agricultural organization whose goal is to finance SR&ED activities.
• Use the keyword TRUST in the IncomeSource group to indicate if the capital gain dividend was received from a trust.
• The keyword MCT1-OV enables you to generate the Manitoba MCT 1 return despite any exemption from filing.

Also note that

• As a result of the modifications made to the CDA form, the previous year information with respect to eligible capital property must be reentered under the keyword CDA-ECP from the CDA-Balance group.
• We have been requested by CRA to remind our clients that a new RC-59 for the current taxation year should not be filed if one was already submitted in a prior year and you had chosen to apply it to all future years.
• In December 2003, the MRQ replaced the registration number by a new identification number. Its format will be 9999999999IC0001 within the new version of the Corporation Income Tax Return (CO-17-V 2003-12). As the current form does not include this new format, MRQ recommends that you enter the registration number until the new form is available in DT Max.

Reminder

• CRA has informed us that they have been receiving corporate tax returns with the corporation business number 123456782RC001. Users are not to use this business number. Although this is a valid business number, these returns are experiencing processing delays since the information for the particular corporation is fictitious. If the corporation is not a registered corporation, enter NR (PE in French) where a business number is requested. If the corporation is registered, then enter the proper business number applying to that corporation.