What's new for T1 version 9.01?

The latest DT Max program update is now available for downloading. It features the fully functional T1/TP1 program for tax years 1996 to 2005.

Please note that T1 v9.01 supports paper filing but does not support efile due to its early release date. The efile version will be integrated into the next version of DT Max that will be stamped 9.10, and will be distributed on CD-Rom and via www.drtax.ca to all DT Max users. This will take place as soon as we receive all relevant certifications towards the end of January or early February 2006.

In this edition...

About the tax changes contained in this version

The DT Max knowledge base will help you to stay abreast of all taxation changes. Please find in the following paragraphs an overview of the implemented tax changes.

The federal economic and fiscal update

On November 14th the government tabled a "mini-budget" that affects in 2005 the tax brackets for individuals and a whole set of tax credits. We would like to advise you that DT Max performs all these recently sanctioned calculations. We enjoin you to consult the tax brackets and rates tables as well as those that pertain to non-refundable tax credits that cover all Canadian jurisdictions for more detailed information.

New adoption expense tax credit (certain provinces)

This new non-refundable tax credit allows for a maximum of $10 000 of fees paid to a licensed adoption agency, legal, travelling as well as any other reasonable expenses to reduce the tax liability at the rate of 15%.

Abolition of the exempt capital gain balance on flow-through entities

Any remaining balance should be added back to the adjusted cost base (ACB) of the asset.

Medical expenses

The refundable medical expense supplement has increased from $562 to $750. The eligible amount of medical expenses that can be claimed per other dependent person has been increased from $5,000 to $10,000.

New Ontario tax measures

The eligible amount of medical expenses that can be claimed per other dependent person has been increased from $5,000 to $10,000. This change also affects the following provinces: PE, NS, MB, SK, AB, BC, YT, NL.

The Ontario Health Premium (OHP) is now payable at 100%, as opposed to 50% for 2004, up to a maximum of $900.

The new adoption expense tax credit is also available for Ontario.

New Quebec tax measures

The Quebec simplified tax system has been abolished.

Although Quebec is returning to a single detailed form, the mechanics of deciding which is the better option for the taxpayer remain.

In order to retain the benefits of the lump sum that the simplified system offered, the complementary amount of $2,965 is still granted. Starting in 2005, the calculation of non-refundable tax credits must include the higher of the following: the lump sum of $2,965, or the total of:

• the contributions to the QPP/CPP;
• the employment insurance premiums;
• the contributions to the Health Services Fund.

Impact of the introduction of the child assistance payments, which replace miscellaneous allowances and credits with respect to dependent children

Since January 1, 2005, Quebec families with dependent children and low-income workers receive assistance throughout the year that replaces the following:

• the non-refundable tax credits respecting dependent children, Q[367];
• the family tax reduction Q[420];
• the PWA (Parental Wage Assistance or APPORT) program.

This will sensibly change the landscape of how dependent children are claimed on the Quebec return. However, a Schedule A will still be required to make any of the following claims for 2005:

• amount for post-secondary studies (maximum 2 semesters);
• amount for single-parent family;
• amount for other dependent children.

Restructuring of Quebec Schedule A regarding dependants under 18

The schedule that calculates dependent children amounts has been partially reorganized to cover situations of minor children and adult children pursuing post-secondary studies. Calculations are such that the total payout between the monetary assistance given and the tax credits granted does not exceed what normally could have been claimed with respect to the dependent child.

New features

New licence key system (T1, T2, T3)

The activation procedure of your DT Max program is slightly different from past years. You will from here on need to enter a 16-digit licence key sent to you by mail to activate your software once version 9.01 is installed.

Please read Installing an updated licence for further details.

New DT Max startup screen

DT Max greets you with a new splash screen that presents all the same information as before.

• Selection of a DT Max program ( T1, T2, T3)
• Selection of a taxation year and a language of use
• Display/selection of the database location
• Username, program version, and name and number of licence holder

The DT Max updater program (T1, T2, T3)

DT Max now comes with a sophisticated updater program that will enable you to download and install updates and patches quickly and efficiently.

Using the DT Max updater you can check for updates from DT Max or set it to automatically check for new releases at regular intervals so you know you are always using the most current DT Max products. Either way, you will always be able to choose which updates you want to download and install.

To use the DT Max updater, select Check for program updates from the Help menu. Click here to get more information about this topic.

New federal 2D bar code (T1)

Following Revenu Québec's example but with a different approach, the federal government now requires from software packages the printing of two-dimensional bar codes. Acting as a keying summary, these bar codes replace the T1-KS, which has been abolished.

These bar codes are printed on the bottom of page 1 of the federal T1 return for almost all tax situations. For taxpayers with a business or rental property, there will normally be 1 or 2 bar codes at the bottom of page 2. The DT Max default value is set to print the federal bar codes (highly recommended). Should you need to disable the printing of the bar codes it is possible to do so within the Printing options of the Preferences menu.

The CRA asks us to relay the following guidelines to our users on 2D bar code printing:

• Please use white paper when printing tax returns.
• Avoid using punctuation such as periods or commas in the street address line.
• The pre-printed address label provided by the Canada Revenue Agency should not be used when the address has changed.
• 2D bar code allows for more accurate processing as manual data capture is eliminated.
• The bar code contains the tax data present in the software at the time the print request is made.
• Where changes are required subsequent to the printing of the bar code, make the changes using the software and print the return again.

Even more aliases

DT Max continually offers its users tips and tricks to accelerate data entry of files and minimize keyword search.

With version 8.35 (T2) we introduced a new layout for the keyword help index and with the present version we have added even more aliases to find keywords.

For example, if you enter "Q250" with the keyword addition function [F11], DT Max will give you the option to choose amongst all types of other deductions from the TP-1 return.

New forms

Please note that all new forms have been added to the billing module.

FEDERAL

T2091/TP-274 - Principal residence

In the CAPITAL-GAIN group, for the relevant types of capital gain, we have added a set of keywords that allow you to make a principal residence designation for federal and Quebec jurisdictions.

Two new variables (%200 for the T2091 and %211 for the TP-274) have been added to permit you to notify the taxpayer of the presence of such an election by way of the client letter.

World income

There exists a new federal form that presents world income amounts for immigrants and emigrants. In addition, the Immigration-Date and Emigration-Date keywords are now part of the Non-Resident group.

T1272 - Newfoundland-and-Labrador direct equity tax credit

QUEBEC

Schedule O - Déclaration de renseignements pour le Registre des entreprises du Québec

Revenu Québec sent all owners of sole proprietorships a statement summarizing the information this agency detains on their business. They must update the information concerning the business annually by completing Schedule O.

Please note that according to provisions of the Charte de la langue française, this form will always be printed in French.

In DT Max, you can fill out schedule O with the NEQ keyword group (business income SmartStart section).

Schedule P - Work premium tax credit

RL-19 - Advance payments of the work premium and the child care expense tax credit

Work chart - line 287

A new work chart associated to line Q[287] has been added to determine the Quebec exploration expenses

Keywords

New keywords

• The Apartment number now has its own keyword in the Street group. DT Max assures compliance of its presentation with government specifications and converts the addresses of 2004 files with the apartment number in the Street keyword to the new keyword arrangement. The POBOX-RR accepts the client's second line of his mailing address (P.O. box, rural road).
• NEQ group to generate Quebec Schedule O.
• Sport-Recreation allows Nova Scotia parents to claim a non-refundable tax credit when they register their children to a designated sport or recreational activity. The amount shows on form NS428.
• Home-Situation is a new keyword to fill in line 517 of form TP-80.
• Inuit is the keyword to enter Inuit residency information for tax administration agreements.
• Ref-Indemnities is the keyword that accepts the amount from box P of RL-5, which impacts lines Q[250] and Q[276].
• Tax-Adjust.rl5 accomodates new boxes M and O of the same RL-5 but carries over to line Q[358].

Modified keywords

• Capital cost allowance

The following options have been added to the selection of CCA-Class you can pick from:

43.1 - 30%
43.2 - 50%
47 - 8%
48 - 15%
49 - 8%



• T2200 - Employment conditions

  An entire set of keywords has been added to the T2200 group to streamline data entry, including the possibility to select the Fed-Conditions that apply to the worker wishing to claim employment expenses.

• T5013 - Statement of partnership income

  Keywords relating to flow-through shares of the T5013 option have been revised for more clarity. These fields can be found in section 3 of this slip, which is titled Allocation of Canadian exploration and development expenses.

• Relation

  The following options have been added to the selections under the Relation keyword:
  
  

  • Great grand-mother/grand-father of...
    
  • Son-in-law/Daughter-in-law of...
    

Reminders

If you file a paper return, note that you are only required to submit form TPF-1.W titled Sommaire des champs à saisir de la déclaration de revenus. Do not submit the jacket (general or simplified) to the MRQ.

As always, we recommend that you verify your carryforwards carefully before processing your client files.

Forms marked "Preliminary" at the top of the page should not be submitted to the government as they were not available in official version at the time of the release of v9.01.

Here is the list of forms that are presently in preliminary version:

AT60 - Alberta royalty credit
NR5 - Reduction in tax withheld
T183 - Efile authorization
T626 - Overseas employment tax credit
T657 - Capital gains deduction
T691 - Alternative minimum tax
T1139 - Reconciliation of business income
T1153 - Consent and request form
T1161 - Properties by an emigrant
T1163 - CAIS account information
T1170 - Capital gains on gifts
T1172 - Tax from RESP's
T1175 - CAIS Calculation of CCA
T1219 - ON Minimun tax carryover
T1221 - Ontario resource expense
T1229 - Exploration and development expenses
T1258 - NB Small business investment credit
T1272 - NL Direct equity tax credit
T2017 - Capital gains reserves
T2036 - Provincial foreign tax credit
T2038 - Investment tax credit
TP-231 - Capital gains on gifts
TP-726.6 - Cumulative net investment loss
TP-726.7 - Capital gains deduction
TP-729 - Carryforward of net capital losses
TP-776.42 - Alternative minimun tax
TP- 935.3 - RRSP home buyer's plan payment
TP-1029.8.63 - Adoption expenses
TP-1029.8.66.2 - Tax credit for infertility
TP-1029.9 - Credit for taxi firms