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Multiple Jurisdiction involving Quebec

Multiple errors with trying to produce a Multiple Jurisdiction Return involving Ontario and Quebec

Software Version 6.0.29972.0

T2125 transferred correctly to TP80 as expected with net income from the business as $16,449.63 (T1) and $17,201.45.

Was required to over-ride the Federal T2203 to generate the correct split. Note that income has been derived from both Ontario and Quebec with about 88% from Ontario.

Question 1: Why does this require an over-ride? Should not the T2203 be able to handle this without an over-ride? I tried column 1, 3 and 4 and all required over-rides. I settled on Column 1 for my over-ride.

Problem 2: I had to ALSO over-ride Quebec TP22 lines 1 & 2 to match the same percentages that were on the T2203. This was completely unnecessary. Only with that over-ride would line 432 of the TP1 be correctly calculated by the software.

Problem 3: Contribution to the Health Services Fund - Line 82 from TPF transferred from the schedule to the TP1 Line 446. To Quote the Guide: If you were resident in Québec on December 31, 2015, and you carried on a business in Canada, outside Québec, in 2015, calculate the amount of your contribution by multiplying the amount on line 82 of Schedule F by the percentage you determined on line 35 of form TP-22-V, Income Tax Payable by an Individual Who Carries On a Business in Canada, Outside Québec.

Question 4: Have any of the three special cases mentioned in the Guide for line 446 been programmed? This affects all years, so if you are correcting the software, I would assume that you will also correct the prior year returns too!

Another problem

Non-Resident of Canada carrying out a business located in Quebec. They are a medical professional who is providing specialized treatment at a Quebec health facility, so have sufficient foreign income that Federal Schedules A and B indicate that there are to be no credits on the tax returns.

I had to indicate that the professional is deemed resident in Quebec. (Note that I have another non-resident professional who is providing services in both Ontario and Quebec. So I am dreading this situation.)

Schedule 10 is attempting to calculate PPIP for a non-resident. Non-residents do not pay into this plan.

TaxCycle Quebec TP1 is attempting to calculate lines 201, 248, and 439, none of which do not apply to this case.

I am not happy about these multiple jurisdiction errors.

Good afternoon Tim!

First off thank you very much for choosing TaxCycle and taking the time to reach out to us on these! We always appreciate your feedback and help on improving our software!

Question 1: Why does this require an over-ride? Should not the T2203 be able to handle this without an over-ride? I tried column 1, 3 and 4 and all required over-rides. I settled on Column 1 for my over-ride.

TaxCycle automatically allocates the income on the T2203 based on the province and valid postal code entered in the address field of the business statements. If no province and postal code is entered or if the postal code is invalid, TaxCycle doesn’t know to which provinces the income is to be allocated. No overrides should be necessary. Here is some documentation on how to trigger the T2203 in TaxCycle: https://www.taxcycle.com/Support/Documentation/ArticleType/ArticleView/ArticleID/1303

Problem 2: I had to ALSO over-ride Quebec TP22 lines 1 & 2 to match the same percentages that were on the T2203. This was completely unnecessary. Only with that over-ride would line 432 of the TP1 be correctly calculated by the software.

If a valid Québec postal code is entered in the business statement, the TP-22 automatically calculates without needing overrides.

Problem 3: Contribution to the Health Services Fund - Line 82 from TPF transferred from the schedule to the TP1 Line 446. To Quote the Guide: If you were resident in Québec on December 31, 2015, and you carried on a business in Canada, outside Québec, in 2015, calculate the amount of your contribution by multiplying the amount on line 82 of Schedule F by the percentage you determined on line 35 of form TP-22-V, Income Tax Payable by an Individual Who Carries On a Business in Canada, Outside Québec.

Thanks for reporting this issue, we have adjusted the calculation to take into account the % allocation when TP-22 applies. This correction was made in both the 2015 and 2016 modules and will be included in a future release (likely available sometime this coming September). Prior to 2015 TaxCycle didn’t support Québec multiple jurisdiction returns, as such no correction was made in our 2014 T1/TP1 module for that reason.

Question 4: Have any of the three special cases mentioned in the Guide for line 446 been programmed? This affects all years, so if you are correcting the software, I would assume that you will also correct the prior year returns too!

The first special case (when TP-22 applies) will be supported in a future release as mentioned above. The second special case (line 62 of Schedule F) is currently supported however we did make a slight adjustment to the calculation to ensure we bring in only the amounts that apply. As for the third case, we don’t currently have form TP-766.2 (for boxes 404 and 405 of the TP1) as part of our T1/TP1 module. That said, we can look at adding it in for 2016 depending on clients’ requests.

Another problem

Non-Resident of Canada carrying out a business located in Quebec. They are a medical professional who is providing specialized treatment at a Quebec health facility, so have sufficient foreign income that Federal Schedules A and B indicate that there are to be no credits on the tax returns.

I had to indicate that the professional is deemed resident in Quebec. (Note that I have another non-resident professional who is providing services in both Ontario and Quebec. So I am dreading this situation.)

Schedule 10 is attempting to calculate PPIP for a non-resident. Non-residents do not pay into this plan.

TaxCycle Quebec TP1 is attempting to calculate lines 201, 248, and 439, none of which do not apply to this case.

I am not happy about these multiple jurisdiction errors.

We cannot seem to be able to reproduce the issues you reported with Schedule 10 as well as lines 248 and 439 of the TP1 Jacket. That said, we did correct the calculation at line 201 of the TP1 jacket to only calculate when applicable (i.e.: not calculate when non-resident). This correction was made to 2014, 2015 and 2016 and will be included with the other corrections listed above. If you wish, you could send us a copy of the file in question via e-Courier to info@taxcycle.com. This would help us further investigate the other issues you reported.

Again thank you for your time and patience Tim!

~ Annie

We were finally able to reproduce the issue with QPIP and read through applicable portions of the Parental Insurance Act. We have modified the QPIP calculations, those for federal Schedule 10 and TP1 Schedule R to not calculate if the client is not a resident of Québec. Similar conditions were applied to TP1 line 446, for the Health Services Fund contributions.

If we haven’t covered anything you mentioned above, please let us know.