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CRA Issues Guidance On Managing Tax Returns For The Deceased

by Mike Godfrey, Tax-News.com, Washington

08 February 2016


The Canada Revenue Agency (CRA) has published guidance on managing the final tax returns for someone who has died.

The CRA said that, in general, the final individual income tax return of a deceased person is prepared and filed in the same manner as when they were alive. All income up to the date of death must be reported, and all credits and deductions to which the person is entitled may be claimed.

The CRA said that it should be provided with the deceased's date of death as soon as possible.

The legal representative of the deceased must report all of the deceased's income from January 1 of the year of death up to and including the date of death. They must also report income earned after the date of death on a T3 Trust and Income Tax and Information Return. If an individual who pays tax by instalments dies during the year, instalment payments due on or after the date of death do not have to be paid.

If the deceased receives a goods and services tax/harmonized sales tax credit payment after the date of death, their legal representative must return the payment. If a recipient of Canada child tax benefit or Universal child care benefit dies, the CRA may be able to transfer these payments to someone else caring for the child. If the deceased is an eligible child, the entitlement to these payments stops the month after the date of death.

The CRA said that an individual would be classed as a legal representative of a deceased person if they are named executor of the will, appointed as the administrator of the estate by a court, or are a liquidator for an estate in Quebec.

TAGS: court | compliance | tax | sales tax | tax compliance | revenue guidance | goods and services tax (GST) | tax authority | Canada | individual income tax | services

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