Canada Tax - Line 207 - T4A Box 32?

Canada Tax - Line 207 - T4A Box 32?

Postby chalfon17 » Mon Mar 21, 2011 2:01 am

CRA Tax - Line 207 - T4A Box 32?
I am filing Canada Revenue Agency (CRA) Tax for my friend.
I need help for Line 207 for T4A Slip paper with Box 32 and Box 126.

I can't upload tax paper example on here (it won't allow so I am copy what it said)

Payer's Name - PSSA Pension LPFP - Year 2010 - T4A

SIN - XXX-XXX-XXX (Private)

--- Recipent's name and address (box area) ---
--- First/Last (private)
--- Address (private)
--- Ontario (Private)
--- Pre-1990 While $4598.28 000689141

Box 016 $22,579.56.............. Box 022 $1,454.04
Box 018 $0.00...................... Box 020 $0.00
Box 024 $0.00...................... Box 048 $0.00
Other Information (grey area)
Box 032 $4598.28................. Box 126 $4598.28

**** On back of T4A Slip Paper ****
Box 032 Registered pension plan contributions (past service) - Enter the amount you can deduct on line 207 (see guide T4040, RRSPs and Other Registered Plans for Retirement) (Box 126 is Pre-1990 past service contributions included in box 032)

I looked up in CRA General Income Tax and Benefit Guide 2010 green book.
On page 22 - Line 207 - Registered pension plan (RPP) deduction).

***** It said in quoted here below *****

"Generally, you can deduct the total of all amounts shown in box 20 of your T4 slips, box 032 of your T4A slips, or on your union or RPP receipts. Contact us or see Guide T4040, RRSPs and Other Registered Plans for Retirement, to find out how much you can deduct if any of the following apply:

(rule 1) * the total is more than $3,500 and your information slips show a past-service amount for service before 1990;
(rule 2) * you contributed in a previous year and could not deduct part of the contributions; or
(rule 3) * you made contributions to a pension plan in a foreign country."

So I guess all 3 rules is not applied to my T4A Slip on Box 032 and 126. So I guess I will put full amount $4598.28 in Line 207.

I should put all amount $4598.28 in Line 207?? or use Chart 2 in T4040 on pg 10 & continued pg 11.
My friend is retired which is about 74 years old. I called CRA they told me to put full amount.. no need use chart... and some tax software (Quick Tax or other program) use $0 or $3500 or $4598.28 on Line 207 (some tax program are confuse me because it has different result). Also I called HR Block. they told me just put full amount.

So I need your professional answer and very honest one. Many Thanks

CRA redesigned new T4A slip to reduce confuse. Now it has no footnote anymore.

Software/Online/Download Program

*** CANTAX software show that Line 207 put full amount $4598.28
*** TubroTax (Quicktax) (online) show that Line 207 (vary $0 or $3500 or $4598.28 depend which 1 of 3 box 32)
*** FutureTax 2010 software show that Line 207 is full amount $4598.28
*** myTaxExpress software show that Line 207 is full amount $4598.28
*** TaxFreeway software show that Line 207 is $0 Amount
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Joined: Sat Feb 05, 2011 5:52 pm

Canada Tax - Line 207 - T4A Box 32?

Postby janene42 » Mon Mar 21, 2011 2:02 am

The maximum amount you can deduct at line 207 is $3500.

The reason you are getting different results with other packages is that the software doesn't know (or wasn't told) that the contributions were for pre-1990 service.

Prior to 1990, the maximum an employee could deduct for pension contributions was $3500. When making past service contributions (which your client did) for service prior to 1990, this limit remains.

The excess contributions ($1098.28 in this case) carries forward and can be deducted in a future year. Depending on when the past service contributions end, and how long your friend lives, it may become deductible.

When interpreting the rules listed, remember that it says if *any* (not all) of the rules apply, the limit is $3500.
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