HAPTER 9 - Other Income, Other Deductions and Other Issues Introduction The coverage of Chapter 9 are other sources of income and deductions in calculating taxable income which do fit in the major components of income that we have learned in Chapters 6-8. INCLUSION IN OTHER INCOME (pages 392-394) - Pension benefits these are certain types of pension plans like registered pension plans, old age security, CPP benefits. - Retiring allowance - are pension benefits given upon death of an employee or loss of office or employment. - Death benefits are amount received by a taxpayer after the death of an employee in recognition of his service in the company. Exclusion of maximum of $10,000 are considered non-taxable for this purpose. CPP benefits (maximum of $2,500 in 2021) is considered taxable to the recipient as his benefit is not in recognition of employees service. - Income inclusions from Deferred Income Plans the following should be included in ones income tax return RRSP withdrawal Income from Home Buyer Plan and Lifelong Learning Plans if repayment or required contribution to the plans are not made, then these amounts should be included in income Payments from Deferred Profit Sharing Plans Registered Retirement Income Funds (RRIF) withdrawal must be included in income - Scholarships and Prizes should be included as income to the extent of the students scholarship exemption under ITA 56 (3), in most cases, scholarships are exempt if it is in connection with: an education program in which the taxpayer is a qualifying student; and an elementary or secondary school education program. - Research Grants are considered taxable net of unreimbursed expenses related to the work. - Social Assistance and Worker Compensation Payments are considered exempt income as is has no effect in taxable income. OTHER DEDUCTIONS (pages 395-403) these are allowable deductions in ones tax return - CPP contribution on self-employed earnings subject to maximum contribution of $2,898 (in 2020) - Moving expenses - ITA 62(1) indicates that a taxpayer can deduct moving expenses incurred as part of an eligible relocation. The usual situations that would be considered eligible relocations can be described as follows: Taxpayers who move to a new work location (a new work location may or may not involve a new employer), either as: - employees, - independent contractors, or - after ceasing to be a full time student at a post-secondary institution. Taxpayers who move in order to commence full time attendance at a post-secondary institution and receive scholarships or research grants from the educational institution that increases their Net Income For Tax Purposes. An unemployed taxpayer who moves to a new location in Canada to take up employment at that new location. The definition also requires that the taxpayers residence, both before and after the move, be in Canada. In addition, it specifies that the distance between the old residence and the new work location or institution b.

1. HAPTER 9 - Other Income, Other Deductions and Other Issues
Introduction
The coverage of Chapter 9 are other sources of income and deductions in calculating taxable
income which do fit in the major components of income that we have learned in Chapters 6-8.
INCLUSION IN OTHER INCOME (pages 392-394)
- Pension benefits these are certain types of pension plans like registered pension plans, old
age security, CPP benefits.
- Retiring allowance - are pension benefits given upon death of an employee or loss of office
or employment.
- Death benefits are amount received by a taxpayer after the death of an employee in
recognition of his service in the company. Exclusion of maximum of $10,000 are considered
non-taxable for this purpose. CPP benefits (maximum of $2,500 in 2021) is considered taxable to
the recipient as his benefit is not in recognition of employees service.
- Income inclusions from Deferred Income Plans the following should be included in ones
income tax return
RRSP withdrawal
Income from Home Buyer Plan and Lifelong Learning Plans if repayment or required
contribution to the plans are not made, then these amounts should be included in income
Payments from Deferred Profit Sharing Plans
Registered Retirement Income Funds (RRIF) withdrawal must be included in income
- Scholarships and Prizes should be included as income to the extent of the students
scholarship exemption under ITA 56 (3), in most cases, scholarships are exempt if it is in
connection with:
an education program in which the taxpayer is a qualifying student; and
an elementary or secondary school education program.
- Research Grants are considered taxable net of unreimbursed expenses related to the work.
- Social Assistance and Worker Compensation Payments are considered exempt income as is
has no effect in taxable income.
OTHER DEDUCTIONS (pages 395-403) these are allowable deductions in ones tax return
- CPP contribution on self-employed earnings subject to maximum contribution of $2,898 (in
2020)
- Moving expenses - ITA 62(1) indicates that a taxpayer can deduct moving expenses incurred
as part of an eligible relocation. The usual situations that would be considered eligible
relocations can be described as follows:

2. Taxpayers who move to a new work location (a new work location may or may not involve a
new employer), either as:
- employees,
- independent contractors, or
- after ceasing to be a full time student at a post-secondary institution.
Taxpayers who move in order to commence full time attendance at a post-secondary institution
and receive scholarships or research grants from the educational institution that increases their
Net Income For Tax Purposes.
An unemployed taxpayer who moves to a new location in Canada to take up employment at that
new location.
The definition also requires that the taxpayers residence, both before and after the move, be in
Canada. In addition, it specifies that the distance between the old residence and the new work
location or institution be not less than 40 kilometres greater than the distance between the new
residence and the new work location or institution.
- Child care expenses (page 399-402) ITA 63 The basic idea is that cost of caring for children
is an allowable deduction in income, this deduction is subject to so many rules, kindly refer to
your textbook for more information on how to calculate these deductions.
- Disability Supports Deduction - ITA 64 (page 402-404)
Eligibility And Coverage
To assist disabled individuals who, work or go to school, ITA 64 provides a disability supports
deduction that is available to disabled individuals who are:
performing duties of an office or employment,
carrying on a business, either alone or as a partner actively engaged in the business,
attending a designated educational institution or a secondary school, or
carrying on research in respect of which the individual received a grant.
The deduction is available for an extensive list of costs that can be associated with a disabled
person working or going to school. The costs must be paid for by the disabled individual and
eligible costs include:
sign language interpretation services, a teletypewriter or similar device;
a Braille printer;
an optical scanner, an electronic speech synthesizer;
note-taking services, voice recognition software, tutoring services; and
talking textbooks.
Limits On the Amount Deducted
The amount of qualifying costs that can be deducted under ITA 64 is limited to the lesser of:

3. An amount determined by the formula:
A - B, where
A is equal to the qualifying disability support costs and
B is equal to any reimbursement (such as payments from medical insurance) of amounts included
in A that were not included in income.
The total of:
Gross employment income, net business income, and scholarships and research grants to the
extent they are included in Net Income For Tax Purposes.
Where the individual is in attendance at a designated educational institution or secondary school,
the least of:
$15,000;
$375 times the number of weeks of school attendance at a designated educational institution or
secondary school; and
the amount by which the individuals Net Income For Tax Purposes exceeds the amounts of
income included in item 1
Related Inclusions and Deductions
- Employment Insurance Benefits this benefit should be included as income and can be
deducted if there are any excess in the amount repaid.
- Pension Income Splitting splitting allows the pensioner / transferor to reallocate 50% of his
or her eligible pension income to the transferee thereby resulting lower tax or savings as the split
income is being taxed at the lowest rate.
- Spousal and child support Support amount is an allowance payable or receivable made on a
periodic basis for maintenance of the recipient, children of the recipient or both. Child support
means support amount not clearly designated as spousal support. A support payment that is
designated as spousal support are deductible to the payor and taxable to the recipient.
- Annuity Payment Received an annuity is an amount payable on a periodic basis, amount
received in excess of the cost of the annuity is considered income or earnings.
- Registered savings plans this allows individuals to make contributions to a trust that is
registered with CRA. Contributions to the plan is tax deferred for Tax Free Savings Account
(TFSAs) , Registered Education Savings Plans (RESPs) and Registered Disability Savings Plans
(RDSPs) however, earnings paid out from (RESPs) and RDSPs are subject to tax to the recipient.