The Alternative minimum tax (AMT) was designed to prevent wealthy Canadians from paying little or no income tax through the use of certain preferential tax treatments (like those listed below) requiring them instead to pay a minimum tax.
How do I know if I need to complete form T691?
If you reported any of the following on your return, you’ll need to complete form T691 to determine whether you’ll need to pay minimum tax:
- Taxable capital gain
- Loss from claiming capital cost allowance on rental properties
- Loss from a limited partnership
- Certain carrying charges on investments
- Loss from resource properties resulting from, or increased by
- Claiming a depletion allowance
- Exploration and development expenses and
- Canadian oil and gas expenses
- An employee home relocation loan reduction
- Security options deduction
- Federal political contribution tax credit
- Investment tax credit
- Labour-sponsored funds tax credit
- Federal dividend tax credit or
- Overseas employment tax credit
Note: If you’re a resident of Québec, complete form TP-776.42-V: Alternative minimum tax to calculate your minimum tax payable or if you want to claim a deduction for AMT paid in the previous 7 years.
What is a preferential tax rate?
Preferential tax means that the applied tax rate is better than it would be on a normal salary or interest income.
Tax Tip: If you paid minimum tax in any of the previous 7 years and you aren’t subject to AMT in 2017, you might be able to claim credits against your income tax payable for all or part of the minimum tax you paid previously. To find out, complete the applicable sections of the T691 page in H&R Block’s tax software.
Where do I claim this?
Follow these steps in H&R Block’s 2017 tax software:
- Under the PREPARE tab, click the OTHER icon. You will find yourself here:
- Under the MISCELLANEOUS heading, select the checkbox labelled Alternative minimum tax (T691),then click Continue.
- When you arrive at the page for Alternative minimum tax, enter your information into the tax software.
