Parents and Grandparents Sponsorship 2018

[canuck_in_uk]

As far i know line 150 in notice of assessment is nothing to do with residency, it is total income on which tax is calculated by CRA. As I was not residence until Mid of 2017 and there is income in my 2015, 2016 notice of assessment at line 150.

But yes I agree in my case another other income will not count as that income was not counted in my tax return of 2015 (although I showed it during the tax filling).

Thanks for help..

Line 150 most certainly has something to do with residency, as it only includes income earned while you are a tax resident of Canada. Income earned while not a tax resident of Canada, such as your US income, is not taxable and therefore not included in line 150

 

[Swaps]

Line 150 most certainly has something to do with residency, as it only includes income earned while you are a tax resident of Canada. Income earned while not a tax resident of Canada, such as your US income, is not taxable and therefore not included in line 150

Permanent residency and tax resident is two different thing, any person living in Canada can be considered as tax resident based on certain criteria example living more than 181 days (approx not sure on number of days) in a year or other family or economic ties with country (like having a house etc.). So line 150 is nothing to do with Permanent residency, yes person is considered resident for tax purposes, so that his taxation can be calculated like residence. So for example if person lived here for say 9 months out of 12 for a given tax year and lived rest of the 3 month in US, when he file taxes in Canada line 150 should include both incomes (Canada + US), and he need to file tax in Canada as tax resident.

Note: Above is my best guess and not cross checked with any documents, so do your own research before considering above.

 

[Rob_TO]

Income only counts if it's earned while living in Canada. Income earned while living in another country, does not count.

http://www.cic.gc.ca/english/resources/manuals/ip/ip02-eng.pdf
5.30. Financial requirements
The financial test is needed to prove that sponsors can support sponsored persons for the period of the undertaking. For more details, see Minimum Necessary Income Requirement: Low-Income Cut-Off levels (LICO), section 5.32, Exception to Minimum Necessary Income Requirement, section 5.33 and Low Income Cut-Off and Quebec Income Scale, Appendix F.

Financial resources:
• may include the resources of the sponsor’s spouse or common-law partner if the sponsor’s financial resources are inadequate and the sponsor’s spouse or common-law partner declares their resources as income on their Canadian tax return and they co-sign the undertaking.
• cannot include pooled resources from other relatives to meet the income test.

Financial resources must originate from Canadian sources for the following reasons:
• employment income abroad is not a reliable indicator of future or stable employment in Canada.
• CPC staff cannot easily verify if foreign income can be transferred to Canada.
• converting foreign income into Canadian dollars is resource-intensive.
• in cases of default, collection and litigation, it is easier to recover income from Canadian sources.

5.31. Exceptions to Canadian income rule
The exceptions to the Canadian income rule are as follows:
• sponsors who commute from Canada to work in the U.S.A. can use their U.S. employment income provided it is declared as income on their Canadian income tax return;
• sponsors living in Canada who declare income from foreign sources on their Canadian tax returns, can use this foreign income to meet the financial requirements for sponsorship.

Discretionary approval of financial requirements is not possible

 

[Swaps]

Income only counts if it's earned while living in Canada. Income earned while living in another country, does not count.

http://www.cic.gc.ca/english/resources/manuals/ip/ip02-eng.pdf
5.30. Financial requirements
The financial test is needed to prove that sponsors can support sponsored persons for the period of the undertaking. For more details, see Minimum Necessary Income Requirement: Low-Income Cut-Off levels (LICO), section 5.32, Exception to Minimum Necessary Income Requirement, section 5.33 and Low Income Cut-Off and Quebec Income Scale, Appendix F.

Financial resources:
• may include the resources of the sponsor’s spouse or common-law partner if the sponsor’s financial resources are inadequate and the sponsor’s spouse or common-law partner declares their resources as income on their Canadian tax return and they co-sign the undertaking.
• cannot include pooled resources from other relatives to meet the income test.

Financial resources must originate from Canadian sources for the following reasons:
• employment income abroad is not a reliable indicator of future or stable employment in Canada.
• CPC staff cannot easily verify if foreign income can be transferred to Canada.
• converting foreign income into Canadian dollars is resource-intensive.
• in cases of default, collection and litigation, it is easier to recover income from Canadian sources.

5.31. Exceptions to Canadian income rule
The exceptions to the Canadian income rule are as follows:
• sponsors who commute from Canada to work in the U.S.A. can use their U.S. employment income provided it is declared as income on their Canadian income tax return;
• sponsors living in Canada who declare income from foreign sources on their Canadian tax returns, can use this foreign income to meet the financial requirements for sponsorship.

Discretionary approval of financial requirements is not possible

Thanks Rob, for the link. Exception part is interesting.

 

[oaw]

Another question related to income,
In 2017, I had earned 75K, then put 25K in RRSP.
I hope, it does not matter whatever I put in RRSP, income will be 75K

 

[canuck_in_uk]

Permanent residency and tax resident is two different thing, any person living in Canada can be considered as tax resident based on certain criteria example living more than 181 days (approx not sure on number of days) in a year or other family or economic ties with country (like having a house etc.). So line 150 is nothing to do with Permanent residency, yes person is considered resident for tax purposes, so that his taxation can be calculated like residence. So for example if person lived here for say 9 months out of 12 for a given tax year and lived rest of the 3 month in US, when he file taxes in Canada line 150 should include both incomes (Canada + US), and he need to file tax in Canada as tax resident.

Note: Above is my best guess and not cross checked with any documents, so do your own research before considering above.

Re-read my post, especially the line in BOLD. I never said line 150 had anything to do with Permanent Residency. I specifically stated tax resident.

Spending part of the year in Canada does NOT make a person a resident for tax purposes for the entire year. A person who moves to Canada partway through the year is only considered a tax resident from the date they establish residential ties. All income earned BEFORE that date is NOT taxable in Canada and therefore not included in line 150.

https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/newcomers-canada-immigrants.html#nwc

What income do you have to report?

For the part of the tax year that you WERE NOT a resident of Canada

You have to report the following amounts:

• income from employment in Canada or from a business carried on in Canada;
• taxable capital gains from disposing of taxable Canadian property; and
• taxable part of scholarships, bursaries, fellowships, and research grants you received from Canadian sources.

 

[Swaps]

Re-read my post, especially the line in BOLD. I never said line 150 had anything to do with Permanent Residency. I specifically stated tax resident.

Spending part of the year in Canada does NOT make a person a resident for tax purposes for the entire year. A person who moves to Canada partway through the year is only considered a tax resident from the date they establish residential ties. All income earned BEFORE that date is NOT taxable in Canada and therefore not included in line 150.

https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/newcomers-canada-immigrants.html#nwc

What income do you have to report?

For the part of the tax year that you WERE NOT a resident of Canada

You have to report the following amounts:

• income from employment in Canada or from a business carried on in Canada;
• taxable capital gains from disposing of taxable Canadian property; and
• taxable part of scholarships, bursaries, fellowships, and research grants you received from Canadian sources.

I read your post before writing my reply and replied on the line that I BOLD below so that if some one refer to the thread get the clear information.

"Line 150 most certainly has something to do with residency, as it only includes income earned while you are a tax resident of Canada. "

Now as far taxation goes in any given year you can be tax resident for entire year as far you meet the criteria of tax resident of that year (doesn't matter when person moved).

For example :

https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/determining-your-residency-status.html


Your residency status if you entered Canada.
.
.

• If you have not established significant residential ties with Canada to be considered a factual resident, but you stayed in Canada for 183 or more days in the year, you may be considered a deemed resident of Canada.

For deemed resident look at the below link and YES person will be taxed in below case for his world wide income (you can get tax credits etc which depend on different country tax treaties with Canada).

https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/deemed-residents.html

Your tax obligations
If you are a deemed resident of Canada for the tax year, you:

• must report world income (income from all sources, both inside and outside Canada) for the entire tax year;

Line 150 include your complete taxable income, so yes it will include income from other countries. Also i got my answers I am just writing to make it as informative as I can.

Thanks to all and Good bye!!

Note: Again I am posting this to best of my knowledge, so your own research before using it.

 

[canuck_in_uk]

I read your post before writing my reply and replied on the line that I BOLD below so that if some one refer to the thread get the clear information.

"Line 150 most certainly has something to do with residency, as it only includes income earned while you are a tax resident of Canada. "

Now as far taxation goes in any given year you can be tax resident for entire year as far you meet the criteria of tax resident of that year (doesn't matter when person moved).

For example :

https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/determining-your-residency-status.html


Your residency status if you entered Canada.
.
.

• If you have not established significant residential ties with Canada to be considered a factual resident, but you stayed in Canada for 183 or more days in the year, you may be considered a deemed resident of Canada.

For deemed resident look at the below link and YES person will be taxed in below case for his world wide income (you can get tax credits etc which depend on different country tax treaties with Canada).

https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/deemed-residents.html

Your tax obligations
If you are a deemed resident of Canada for the tax year, you:

• must report world income (income from all sources, both inside and outside Canada) for the entire tax year;

Line 150 include your complete taxable income, so yes it will include income from other countries. Also i got my answers I am just writing to make it as informative as I can.

Thanks to all and Good bye!!

Note: Again I am posting this to best of my knowledge, so your own research before using it.

You are referring to deemed residents, which is an entirely different situation than the one in this thread. People cannot be deemed a tax resident of Canada before they even immigrate and establish ties here.

You cannot pick and choose information to support your statement.

 

[maduljid062]

Hi , I m also applying for my mom and dad this year, I m single, so our family size is 3. I have a question, Is the LICO calculated before taxes or after taxes, I mean if my t4 shows an income of 48,000 ..so is this what is calculated or income before tax deduction...I m confused, pls help.. also when the 2018 forms are released do we get a ticket number...someone said so

 

[jpfyoung]

Are we assuming that the required tax years will be 2017, 2016 & 2015?

 

[oaw]

Hi , I m also applying for my mom and dad this year, I m single, so our family size is 3. I have a question, Is the LICO calculated before taxes or after taxes, I mean if my t4 shows an income of 48,000 ..so is this what is calculated or income before tax deduction...I m confused, pls help.. also when the 2018 forms are released do we get a ticket number...someone said so

Hi,
You need to meet MNI (minimum necessary income) on the amount before tax ( line 150 on your tax assessment).

MNI = LICO + 30%

 

[oaw]

Is the MNI table mentioned in this link still valid and updated until 2016.
https://www.canadavisa.com/necessary-income-levels-for-family-sponsorship.html

based on this MNI table, A family of 3 will need to have
2014: $47,051
2015: $47,476
2016: $48,404

For each three year the MNI will be different ?

 

[jpfyoung]

Is the MNI table mentioned in this link still valid and updated until 2016.
https://www.canadavisa.com/necessary-income-levels-for-family-sponsorship.html

based on this MNI table, A family of 3 will need to have
2014: $47,051
2015: $47,476
2016: $48,404

For each three year the MNI will be different ?

My understanding from the website is that they want 2015, 2016, 2017 income. But we probably won't know definitely until January 2nd. Just my assumption at the moment.

 

[oaw]

Another question related to income,
In 2017, I had earned 75K, then put 25K in RRSP.
I hope, it does not matter whatever I put in RRSP, income will be 75K

 

[Rob_TO]

My understanding from the website is that they want 2015, 2016, 2017 income. But we probably won't know definitely until January 2nd. Just my assumption at the moment.

There is zero mention anywhere on 2017 income. The only indication of income so far is same as last year, 2014/2015/2016.

If they do the lottery and start accepting apps in a more efficient and timely way vs last year, then it's possible 2017 NOAs may not yet be available for 2018 intake, in which case 2014/2015/2016 income will be required. Recall that self employed people often don't have their taxes done until much later in the year.

Will need to wait though until official 2018 app package is released.