We are a few weeks into the HST transition and there have been a few common questions and issues during the transition. This week I’ll forward some of the more common questions that have arose. If you have received common questions about the HST from clients please forward them to me for inclusion.
As mentioned in the April 5th HST blast, there is an HST transitional sales tax benefit to a maximum of $300 available to Ontario resident individuals who earned less than $80,000 in 2009 and a maximum credit of $1,000 Ontario resident families (couples or single parents) who had total income of less than $160,000. These benefits are payable in three instalments to be paid June 2010, December 2010 and June 2011.
Ontario Sales Tax Transition Benefit
Question 1: Why did my T1 cover letter show one individual getting the credit and the benefit was given to the spouse?
The T1 program calculates the amount of the credit at the bottom of form GSTC and calculated the amount and reported the amount on the client letter of the first spouse in the file, unless overridden in the box at the top of the form. The recipient of the credit may be different than the individual stated on the letter since the benefit payments will be made to the individual whose return is assessed by the CRA first.
Question 2: Why is the amount of the benefit on the letter different than my cheque?
The T1 letter shows the total amount to be paid in the calendar year in two instalments. A spouse receiving the full $1,000 benefit will receive $330 in June 2010, $335 in Dec 2010 and $335 in June 2011. The cover letter states that the taxpayer is entitled to a benefit of $665.
Question 3: Is the benefit taxable?
Thankfully no, the benefit is not taxable.
