5003-PC Information for Residents of Nova Scotia

What’s new for Nova Scotia for 2018?

The age amount, the basic personal amount, the spouse or common-law partner amount, and the amount for an eligible dependant have increased for individuals with a taxable income of $25,000 or less. The increase is phased out for taxable income between $25,000 and $75,000.

The rate used to calculate the dividend tax credit for other than eligible dividends has decreased to 3.16%.

Nova Scotia benefits for individuals and families

Nova Scotia child benefit

The Nova Scotia child benefit (NSCB) is a non-taxable amount paid monthly to help low- and modest-income families with the cost of raising children under 18 years of age. This benefit is combined with the Canada child benefit into one monthly payment.

You do not need to apply for the NSCB. The Canada Revenue Agency (CRA) will use the information from your Canada child benefits application to determine your eligibility and tell you if you are entitled to the benefit.

Nova Scotia affordable living tax credit

The Nova Scotia affordable living tax credit (NSALTC) is a non-taxable quarterly payment to make life more affordable for low- and modest-income individuals and families. This credit is combined with the federal GST/HST credit.

You do not need to apply for the GST/HST credit or the NSALTC. The CRA will use the information from your return to determine your eligibility and tell you if you are entitled to the credit.

File your return

To make sure you get your payments on time, you (and your spouse or common-law partner) need to file your 2018 income tax and benefit return(s) by April 30, 2019. The CRA will use the information from your return(s) to calculate the payments you are entitled to get from these programs.

The NSBC and NSALTC are fully funded by the Province of Nova Scotia. For more information about these programs, go to Province of Nova Scotia, or call the CRA at 1-800-387-1193.

Completing your Nova Scotia form

You can download and print a copy of Form NS428, Nova Scotia Tax and Credits to calculate your Nova Scotia tax and credits. Attach a completed copy of Form NS428 to your return.

Definitions

Spouse refers to a person to whom you are legally married.

Common-law partner refers to a person who is not your spouse but with whom you are in a conjugal relationship, and at least one of the following conditions applies:

• This person has been living with you in a conjugal relationship for at least 12 continuous months (including any period of time where you were separated for less than 90 days because of a breakdown in the relationship).
• This person is the parent of your child by birth or adoption.
• This person has custody and control of your child (or had custody and control immediately before the child turned 19 years of age) and your child is wholly dependent on them for support.

End of the year means any of the three following dates:

• December 31, 2018
• the date you left Canada if you emigrated in 2018
• the date of death for a person who died in 2018

Form NS428, Nova Scotia Tax and Credits

Complete Form NS428 if you were a resident of Nova Scotia at the end of the year.

If you were a non-resident of Canada in 2018, complete Form NS428 if one of the following applies:

• You earned income from employment in Nova Scotia.
• You received income from a business with a permanent establishment only in Nova Scotia.

Complete Form T2203, Provincial and Territorial Taxes for 2018 – Multiple Jurisdictions, instead of Form NS428 if each of the following applies:

• You had income from a business (including income you received as a limited or non-active partner).
• The business has a permanent establishment outside Nova Scotia.

Part A – Nova Scotia non-refundable tax credits

The eligibility criteria and rules for claiming most of the Nova Scotia non-refundable tax credits are the same as those for the federal non-refundable tax credits. However, the value and calculation of most Nova Scotia non-refundable tax credits are different from the corresponding federal credits.

Newcomers to Canada and emigrants

If you reduced your claim for the amounts on lines 300 to 307, 316, 318, 324, and 326 of your federal Schedule 1, you also need to reduce the corresponding provincial amounts on lines 5804 to 5820, 5823, 5840, 5844, 5848, 5860, and 5864 in the same manner.

Line 5812 – Spouse or common-law partner amount

You can claim this amount if the rules are met for claiming the amount on line 303 of federal Schedule 1 and your spouse’s or common-law partner’s net income (line 236 of their return, or the amount that it would be if they filed a return) is less than $9,329.

Line 5816 – Amount for an eligible dependant

You can claim this amount if the rules are met for claiming the amount on line 305 of federal Schedule 1 and your dependant’s net income (line 236 of their return, or the amount that it would be if they filed a return) is less than $9,329.

Line 5820 – Amount for infirm dependants age 18 or older

You can claim up to $2,798 for each of your (or your spouse’s or common-law partner’s) dependent children or grandchildren only if they had an impairment in physical or mental functions and were born in 2000 or earlier.

You can also claim an amount for more than one person if each one meets all of the following conditions:

• They were your (or your spouse’s or common-law partner’s) parent, grandparent, brother, sister, aunt, uncle, niece, or nephew.
• They were 18 years of age or older.
• They were dependent on you (or on you and others) because of an impairment in physical or mental functions.
• They were a resident of Canada at any time in the year.

You can claim an amount only if the dependant’s net income (line 236 of their return, or the amount it would be if they filed a return) is less than $8,481.

If you had to make support payments for a child, you cannot claim an amount on line 5820 for that child unless each of the following conditions apply:

• You were separated from your spouse or common-law partner for only part of 2018 because of a breakdown in your relationship.
• You do not claim any support amounts paid to your spouse or common-law partner on line 220 of your return.

If each of these conditions is met, you can claim either an amount on line 5820 or an amount on line 220 of your return, whichever is better for you.

How to claim this amount

Complete the calculation for line 5820 using Worksheet NS428. If you are claiming this amount for more than one dependant, enter the total amount on line 5820.

Claim made by more than one person

If you and another person support the same dependant, you can split the claim for that dependant. However, the total amount of your claim and the other person’s claim cannot be more than the maximum amount allowed for that dependant.

Line 5823 – Amount for young children

You can claim this amount if you were a resident of Nova Scotia at the end of the year and you had a dependent child who was less than six years of age.

You can claim $100 per month for each child, if all of the following conditions are met:

• The child was less than six years of age and living with you on the first day of the month.
• No one else claimed the amount for young children for the child for the month you are claiming.
• The child has not been claimed by you or anyone else as an eligible dependant on line 5816.
• No one has received a special allowance under the Children’s Special Allowances Act for the child for the month you are claiming.

If you had a spouse or common-law partner at the end of the year, only the person with the lower net income (including zero income) can claim this amount. If you and your spouse or common-law partner have equal net incomes, you have to decide who will claim this amount.

How to claim this amount

Complete the “Details of amount for young children” chart in Part C of Form NS428.

Provide the details for each child you are claiming including the number of eligible months you are claiming for that child.

Enter the total number of eligible months you are claiming for all children beside box 6372 on page 1 of Form NS428. Claim $100 for each eligible month, and enter the total amount on line 5823. The maximum amount you can claim for 2018 is $1,200 for each dependent child.

Line 5836 – Pension income amount

The amount you can claim on line 5836 is the amount on line 314 of your federal Schedule 1 or $1,173, whichever is less.

Line 5840 – Caregiver amount

If, at any time in 2018, you (alone or with another person) kept a dwelling where you and one or more of your dependants lived, you may be able to claim up to $4,898 for each dependant.

Each dependant must have been one of the following:

• your (or your spouse’s or common-law partner’s) child or grandchild
• your (or your spouse’s or common-law partner’s) brother, sister, niece, nephew, aunt, uncle, parent, or grandparent who was resident in Canada

Also, each dependant must meet all of the following conditions:

• They were 18 years of age or older when they lived with you.
• They had a net income in 2018 (line 236 of their return, or the amount it would be if they filed a return) of less than $18,575.
• They were dependent on you because of an impairment in physical or mental functions, or they are your (or your spouse’s or common-law partner’s) parent or grandparent born in 1953 or earlier.

If you had to make support payments for a child, you cannot claim an amount on line 5840 for that child. However, you may be able to claim an amount for that child on line 5840 (in addition to any allowable amounts on lines 5816 and 5848) if each of the following applies:

• You were separated from your spouse or common-law partner for only part of 2018 because of a breakdown in your relationship.
• You do not claim any support amounts paid to your spouse or common-law partner on line 220 of your return.

How to claim this amount

Complete the calculation for line 5840 using Worksheet NS428. If you are claiming this amount for more than one dependant, enter the total amount on line 5840.

Claim made by more than one person

If you and another person support the same dependant, you can split the claim for that dependant. However, the total of your claim and the other person’s claim cannot be more than the maximum amount allowed for that dependant.

If anyone (including you) can claim this amount for a dependant, no one can claim an amount on line 5820 for that dependant.

If anyone other than you claims an amount on line 5816 for a dependant, you cannot claim an amount on line 5840 for that dependant.

Line 5844 – Disability amount (for self)

You can claim this amount if you met the rules for claiming the amount on line 316 of federal Schedule 1.

If you were 18 years of age or older at the end of the year, enter $7,341 on line 5844.

If you were under 18 years of age at the end of the year, complete the calculation for line 5844 using Worksheet NS428.

Line 5848 – Disability amount transferred from a dependant

You can claim this amount if the rules are met for claiming the amount on line 318 of federal Schedule 1.

Line 5856 – Your tuition and education amounts

Complete Schedule NS(S11), Provincial Tuition and Education Amounts.

Transferring amounts

If you do not need to use all of your 2018 tuition and education amounts to reduce your provincial income tax to zero, you can transfer all or some of the unused part to your spouse or common-law partner (who would claim it on line 5864), or your parent or grandparent, or your spouse’s or common-law partner’s parent or grandparent (who would claim it on line 5860).

The student must complete the “Transfer or carryforward of unused amount” section of Schedule NS(S11) to transfer an amount. The student must also complete any of the following applicable forms to designate who can claim the transferred amount and to specify the provincial amount this person can claim:

• T2202A, Tuition and Enrolment Certificate
• TL11A, Tuition  and Enrolment Certificate – University Outside Canada
• TL11B, Tuition and Enrolment Certificate – Flying School or Club
• TL11C, Tuition and Enrolment Certificate – Commuter to the United States

The transferred amount may be different than the amount calculated for the same person on your federal Schedule 11. Enter the provincial amount you are transferring on line 20 of your Schedule NS(S11).

Carrying forward amounts

Complete the “Transfer or carryforward of unused amounts” section of Schedule NS(S11) to calculate the amount you can carry forward to a future year. This amount is the part of your tuition and education amount that you do not need to use for the year and are not transferring to your spouse or common-law partner, your parent or grandparent or your spouse’s or common-law partner’s parent or grandparent.

Supporting documents
If you are filing electronically, keep all your documents in case we ask to see them later.
If you are filing a paper return, attach your completed Schedule NS(S11), but do not send your other documents. Keep all your documents in case we ask to see them later.

Line 5860 – Tuition and education amounts transferred from a child

The student may be able to transfer all or part of their unused tuition and education amounts for 2018 to their parent or grandparent or their spouse’s or common-law partner’s parent or grandparent.

The maximum amount each student can transfer is $5,000 minus the amount they use, even if there is an unclaimed part.

How to claim this amount

Enter on line 5860 the total of all provincial amounts that each student has transferred to you as shown on their Form T2202A, TL11A, TL11B, or TL11C.

Supporting documents
If you are filing electronically or filing a paper return, do not send any documents. Keep all your documents in case we ask to see them later.
The student must attach Schedule NS(S11) to their paper return.

Line 5868 – Medical expenses for self, spouse or common-law partner, and your dependent children born in 2001 or later

The medical expenses you can claim on line 5868 are the same as those you can claim on line 330 of your federal Schedule 1. They have to cover the same 12-month period ending in 2018, and must be expenses that were not claimed for 2017.
The total expenses need to be more than 3% of your net income (line 236 of your return) or $1,637, whichever is less.

Line 5872 – Allowable amount of medical expenses for other dependants

You can also claim medical expenses for other dependants in addition to the medical expenses claimed on line 5868.

The medical expenses you can claim on line 5872 are the same as those you can claim on line 331 of your federal Schedule 1. They have to cover the same 12-month period ending in 2018, and must be expenses that were not claimed for 2017.

The total expenses for each dependant need to be more than either 3% of that dependant’s net income (line 236 of their return) or $1,637, whichever is less.

Part C – Nova Scotia tax

Line 40 – Nova Scotia tax on split income

If you need to pay federal tax on split income on line 424 of your federal Schedule 1, complete Part 3 of Form T1206, Tax on Split Income, to calculate the Nova Scotia tax that applies to this income and enter the amount on line 428 of your return.

For more information on tax on split income, see the Federal Income Tax and Benefit Guide.

Line 47 – Nova Scotia additional tax for minimum tax purposes

If you need to pay federal minimum tax as calculated on Form T691, Alternative Minimum Tax, complete the calculation on line 47 of Form NS428 to determine your Nova Scotia additional tax for minimum tax purposes.

For more information on minimum tax, see the Federal Income Tax and Benefit Guide.

Line 49 – Provincial foreign tax credit

If your federal foreign tax credit on non-business income is less than the related tax you paid to a foreign country, you may be able to claim a provincial foreign tax credit.

To claim the credit, complete Form T2036, Provincial or Territorial Foreign Tax Credit.

Enter, on line 49 of Form NS428, the tax credit calculated on line 5 of Form T2036.

Supporting documents
If you are filing electronically, keep all your documents in case we ask to see them later.
If you are filing a paper return, attach your Form T2036.

Nova Scotia research and development tax credit recapture

If you are a member of a partnership or a beneficiary of a trust that acquired property from a corporation in a non-arm’s length transaction and, in 2018, converted the property to commercial use or disposed of it, you may have to include in your Nova Scotia tax payable all or part of the Nova Scotia research and development tax credit previously claimed by the corporation for the property.

For more information on the Nova Scotia research and development tax credit recapture, including instructions on how to calculate and report this amount, call the CRA at 1-800-959-8281.

Nova Scotia low-income tax reduction

You can claim the Nova Scotia low-income tax reduction if you were a resident of Nova Scotia on December 31, 2018, and any of the following conditions applied to you:

• You were 19 years of age or older.
• You had a spouse or common-law partner.
• You were a parent.

If you had a spouse or common-law partner on December 31, 2018, you and your spouse or common-law partner need to decide who will claim the low-income tax reduction for your family.

You cannot claim the tax reduction if, on December 31, 2018, you were confined to a prison or a similar institution for a total of more than six months during 2018.

If you are preparing a return for a resident of Nova Scotia who died in 2018, the tax reduction can be claimed on their final return. If the deceased person had a spouse or common-law partner, the tax reduction can be claimed on either the deceased person’s final return or the return of the spouse or common-law partner.

Adjusted family income for the calculation of the Nova Scotia low-income tax reduction

To calculate your adjusted family income, complete columns 1 and 2 (lines 51 to 56 of Form NS428) using the information from your and your spouse’s or common-law partner’s returns.

Line 59 – Reduction for spouse or common-law partner

Claim $300 if you had a spouse or common-law partner on December 31, 2018.

Line 60 – Reduction for an eligible dependant

Claim $300 if you claimed an amount for an eligible dependant on line 5816 of Form NS428.

Line 62 – Reduction for dependent children born in 2000 or later

Enter beside box 6099 the number of dependent children you have who were born in 2000 or later.

Claim $165 for each dependant, but do not include a child for whom you claimed the reduction for an eligible dependant on line 60 of Form NS428. Only one person can claim the tax reduction for a child.

Who is a dependent child?

A dependent child is a child who, on December 31, 2018, met all of the following conditions:

• They were 18 years of age or younger.
• They did not have a spouse or common-law partner.
• They were not a parent.
• They lived with you or were claimed as a dependant only by you or your spouse or common-law partner.

Line 71 – Nova Scotia political contribution tax credit

You can claim a credit equal to 75% of the contributions you made in 2018 to recognized Nova Scotia political parties or to candidates seeking election in the Nova Scotia House of Assembly.

On line 71 of Form NS428, calculate and enter your credit to a maximum of $750.

Supporting documents
If you are filing electronically, keep all your documents in case we ask to see them later.
If you are filing a paper return, attach the official receipt (signed by an official agent of the candidate or political party) for each contribution.

Line 73 – Food bank tax credit for farmers

You can claim this credit if you meet all of the following conditions:

• You were a resident of Nova Scotia at the end of the year.
• You or your spouse or common-law partner was a farmer.
• You made a qualifying donation to an eligible food bank in the year.
• You have claimed the qualifying donation on line 340 of your federal Schedule 9 and on line 29 of Form NS428 as a charitable donation or gift for the year.

A qualifying donation is a donation of one or more agricultural products produced in Nova Scotia and donated to an eligible food bank in Nova Scotia on or after January 1, 2018.

An eligible food bank is a registered charity under the Income Tax Act that distributes food to the public in Nova Scotia without charge and does so mainly to provide relief to the poor.

The amount of qualifying donations can be split between spouses or common-law partners; however, the total amount of qualifying donations that can be claimed by spouses or common-law partners cannot be more than the total of the qualifying donations made in the tax year.

If you are preparing a return for a person who died in 2018, you can claim this credit on the deceased person’s final return.

If you were bankrupt in 2018, claim your food bank tax credit for farmers on either the pre- or post-bankruptcy return you file for the tax year ending December 31, 2018, depending on when the qualifying donations were made.

If qualifying donations are claimed on more than one return, the total amount of donations that can be claimed on all returns filed for the year cannot be more than the total qualifying donations made.

How to claim this credit

Enter beside box 6098 the amount of donations you have included on line 340 of your federal Schedule 9 that are qualifying donations for the food bank tax credit for farmers. Then enter 25% of this amount on line 73 of Form NS428.

Line 75 – Labour-sponsored venture capital tax credit

You can claim a credit equal to 20% of your investment in eligible shares acquired in 2018 (that you did not claim on your 2017 return) or in the first 60 days of 2019.

If an RRSP for spouse or common-law partner became the first registered holder of the share, either the RRSP contributor or the annuitant may claim this credit for that share.

How to claim this credit

Enter on Form NS428 the cost of your shares shown on Form NSLSV, Nova Scotia Labour-Sponsored Venture Capital Tax Credit, issued by the relevant labour-sponsored venture capital corporation.

On line 75 of Form NS428, calculate and enter your credit to a maximum of $2,000.

Supporting documents
If you are filing electronically, keep all your documents in case we ask to see them later.
If you are filing a paper return, attach your Form NSLSV.

Line 77 – Equity tax credit

You can claim this credit for investments in eligible shares you acquired in 2018 (that you did not claim on your 2017 return) or in the first 60 days of 2019.

How to claim this credit

Complete Form T1285, Nova Scotia Equity Tax Credit.

Enter, on line 77 of Form NS428, the tax credit calculated on line 6 of Form T1285.

Supporting documents
If you are filing electronically, keep all your documents in case we ask to see them later.
If you are filing a paper return, attach your Form T1285 along with your NSETC-1 receipt, Nova Scotia Equity Tax Credit.

Line 79 – Age tax credit

You can claim this credit if you meet all of the following conditions:

• You were a resident of Nova Scotia on December 31, 2018.
• You were 65 years of age or older on or before December 31, 2018.
• Your taxable income from line 260 of your return was less than $24,000.

If you qualify for this credit, enter $1,000 on line 79 of Form NS428.

If you are preparing a return for a resident of Nova Scotia who died in 2018, you can claim this credit on the deceased person’s final return if they were 65 years of age or older on the day of death and their taxable income was less than $24,000.

Line 81 – Nova Scotia volunteer firefighters and ground search and rescue tax credit

You can claim this credit if you meet all of the following conditions:

• You were a resident of Nova Scotia on December 31, 2018.
• You were a volunteer firefighter or a ground search and rescue volunteer for a minimum of six months during the period of January 1 to December 31, 2018.
• You did not receive salary, wages, or compensation, other than reasonable reimbursement or allowance for expenses.
• For a volunteer firefighter, you were listed as a volunteer firefighter on the report filed by the fire chief of the volunteer fire department.

If you qualify for this credit, enter $500 on line 81 of Form NS428.

If you are preparing a return for a person who died in 2018, you can claim this credit on the deceased person’s final return if they were a resident of Nova Scotia on the day of death and met all of the conditions.

Link to Source:https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package/nova-scotia/5003-pc/information-residents-nova-scotia.html