---
name: preparing-canadian-personal-tax-returns
description: Helps organize and prepare a Canadian personal income tax return (T1) — slips checklist, deductions vs credits, federal brackets, deadlines, NETFILE, and instalments. Use when the user asks for help preparing, organizing, or checking their Canadian tax return, T1, T4/T5/T3 slips, RRSP deduction, CRA filing deadlines, refund estimation, or which credits apply. Do not use for US returns (preparing-us-personal-tax-returns), corporate T2 returns (filing-canadian-business-taxes), or tax planning strategy (optimizing-canadian-personal-taxes).
---

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Author: Simon-Pierre Boucher
Contact: contact@spboucher.ai
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# Preparing Canadian Personal Tax Returns

## When to use / when NOT to use
- **Use for:** organizing slips, mapping income and deductions to the T1, distinguishing deductions from credits, deadline and payment questions, NETFILE readiness, instalment rules for an individual return.
- **Do NOT use for:** US 1040 returns, corporate T2, GST/HST business filings, or planning strategy for future years. Quebec residents also file a provincial TP-1 — flag it, then stay on the federal T1.

## Important limits
- Educational preparation help, not professional tax advice — complex situations (departure tax, foreign property T1135, audits) go to a CPA.
- All figures below are stated for **tax year 2026** and MUST be verified against [canada.ca](https://www.canada.ca/en/revenue-agency.html) before use.
- Never assist with evasion — unreported income or fabricated deductions are out of scope; if asked, decline and explain the legal alternative.

## Workflow
1. Collect slips against the checklist: T4 (employment), T4A (pensions/self-employment/scholarships), T5 (investment income), T3 (trust/fund distributions), T5008 (securities sales), T2202 (tuition), RRSP contribution receipts (including first-60-days), T4E (EI), T4A(P)/T4A(OAS), plus rent/property-tax records where provincial credits apply.
2. Confirm residency and province on December 31 — provincial tax and credits follow that province.
3. Map income to T1 lines (see the slip map in [references/reference.md](references/reference.md)); capital gains from T5008 need cost-basis reconciliation.
4. Apply **deductions** (reduce taxable income): RRSP (within the deduction limit on the prior notice of assessment), union dues, child care, moving (eligible cases). Keep the distinction from credits precise.
5. Apply **credits** (reduce tax): basic personal amount, medical above the income floor, donations (two-tier federal rate), tuition, disability, Canada employment amount.
6. Compute balance or refund; check the instalment rule — CRA requires instalments when net tax owing exceeds $3,000 (Quebec: $1,800) in the current year and either of the two prior years.
7. **Validate:** every slip from step 1 appears on the return (CRA auto-matches slips — omissions trigger reassessment); RRSP claimed ≤ deduction limit; totals cross-check against slips; NETFILE confirmation number recorded after transmission.

## Current figures (tax year 2026 — verify before use)
| Item | Value | Source |
|---|---|---|
| Federal brackets | 14% ≤ $58,523 · 20.5% ≤ $117,045 · 26% ≤ $181,440 · 29% ≤ $258,482 · 33% above | canada.ca |
| Provincial tax | Stacks on top — separate bracket table per province | provincial sites |
| Filing deadline | April 30 (self-employed: June 15, but payment still April 30) | canada.ca |
| RRSP deduction deadline | ~60 days into the following year (Mar 2, 2026 for TY2025) | canada.ca |
| RRSP dollar limit | $33,810 (and ≤18% of prior-year earned income + carryforward) | canada.ca |
| TFSA annual room | $7,000 (no deduction — contributions are after-tax) | canada.ca |
| FHSA | $8,000/yr, $40,000 lifetime (deductible like RRSP) | canada.ca |
| Instalment threshold | Net owing > $3,000 in current + one of two prior years | canada.ca |

## Edge cases & failure modes
- **Missing slip** → pull it from CRA My Account (Auto-fill my return); never estimate silently.
- **Error found after filing** → ReFILE or T1 adjustment (T1-ADJ); do not file a second return.
- **First-time filer** → NETFILE may require paper filing or CRA account setup first.
- **Can't pay** → file by the deadline anyway: the late-filing penalty is 5% + 1%/month (up to 12), separate from interest on the balance.
- **Foreign property > $100,000 cost** → T1135 required; steep penalties — flag and refer out if complex.

## References
Full slip map, credit tables, deadline calendar, penalty structure, and worked examples: see [references/reference.md](references/reference.md).