I have a client and their child did some acting last year. She is 3yrs old. But they gave her a t4a box 048 which I have to create a business for this child? or do I just enter the amount as income on the dependant page?
Now both the parents received a t4a from the agency but this amount was so they would go get a covid test done so they paid them a small fee to go have this done. The fee was for the inconvenience of having to take time from work. But again it is on box 048 that is requiring me to do up a t2125. This is not a business for them at least not yet. Also, they gave the mom a T4A box 048 for $1000 the reason for this is because when the child first started she did not have a SIN# so they gave the money to the mom. The mom did ask that they correct this but it was a hassle.
Any suggestion on how to get around not having to create a business page. And if I have to create a business page what code would I even use. I looked through the codes and have not guess at all.
Hoping someone will be able to help me out with this one.
A 3-year-old need to file a tax return?
It doesn’t matter what you do, it will be attributed to the parent. It takes as much time to create a business return as it does to try to figure out what to do. A three year old child in Canada would receive a SI# at birth.
Business income isn’t subject to the attribution rules.
Report the income on the dependant’s schedule as THEIR income. Not attributable.
Report the parents’ T4A on Line 13000, at the risk of having to respond to a matching inquiry in the fall. If it’s small, they may pick it up directly. Not technically correct, but having done it in the past for small amounts (also T1204) it doesn’t generally seem to be an issue.
THank you I will look into reporting it on line 13000. But it is reported on the t4a that is making me report it as a business, But I will look to see if I can do what you are suggesting
Yup - if you follow TC’s entry method it will do that. Or don’t enter as a T4A and enter directly onto 13000 under other income. (Oddly TC provides a spot for a T1204 to go to 13000, but not a T4A. I do this regularly for honoraria.)
One of the cool things about TaxCycle is you can report the amount from Box 48 of the T4A properly and from the drop down selection just below box 48 on the T4A input screen where it says “Reporting method for box 48 income” you can select the option that says “Transfer directly to line 13500 (Business), No T2125”
What is wrong with that?
As for the kid’s earnings… do as SmallBizGuy says. I have had clients with young children appear in television commercials who receive their income on the T4A box 48. It’s income of the child. If they don’t need to file a T1 return then enter the income in the Dependant area.
It now wants me to pick an industry code? What code would I use for child who is just doing some acting. She was in a couple commercials. I hope you can help me with this one
711512 independent actors, comedians and performers
@snowplowguy – don’t think I’ve ever noticed that drop-down!! Of course I also can’t remember the last time I had a box 48 amount either…(getting old?)
I understand getting old.
I believe that it’s new in the software this year?
@mike actually been there for a while now
I think Mike was likely referring to the “new” features added in the drop down that snowplow was detailing. I believe the option to not create a T2125 is in fact new this year.