Visual tax summary: Understanding your Revenu Québec tax return

Visual tax summary gives you a visual breakdown of the amounts found in your return that relate to each of the sections below. This’ll let you see exactly how they all work together to get your refund or tax owing. 

Note: Visual tax summary is a feature that’s available only to users of one of our paid products.

What's total income?

Your total income is calculated by combining all your sources of income, including what you earned from employment or self-employment activities, from your investments (in the form of dividends or interest), foreign income, etc. It even includes the income you earned that wasn’t reported on any of your slips, like tips and gratuities.

Note: If you earned employment income while working for a company located outside of Québec (regardless of where you performed your duties), this income is also included in your total income.

Determining your total income is the first step in figuring out if you're taxable or not. Once you know your total income, you can then apply certain deductions to reduce your total income to your net income (this amount is used to calculate certain benefits like the GST/HST tax credit, Canada child benefit, or the Guaranteed Income Supplement).

Refer to the list below for some of the more common income sources you’re likely to include in your return. For a full list, refer to the Revenu Québec’s Income Tax Return Guide.

  • Employment income
  • Parental insurance benefits
  • Québec pension plan (QPP) or Canada pension plan (CPP) benefits
  • Other employment income
  • Old age security (OAS) pension
  • Interest and other investment income
  • Rental income
  • Taxable capital gains
  • RRSP income
  • Self-employment income
  • Social assistance payments

What are deductions?

Before you can calculate your taxable income, you must first claim your deductions. Some deductions help by lowering the amount of income you’re required to pay taxes on, while others will directly lower your tax liability. 

Certain deductions encourage beneficial behaviours like making contributions to your RRSP, or splitting pension income with your spouse*; others help you manage the costs of daily life (the cost of childcare and, in some cases, your work-related expenses can be deducted from your total income).

*It’s important to remember that while splitting pension income with your spouse results in a deduction that you can claim on your return (lowering your total income), the income that’s transferred to your spouse will increase his or her total income. 

Refer to the list below for some of the more common deductions you’re likely to claim on your return. For a full list, refer to Revenu Québec’s Income Tax Return Guide.

  • RRSP contributions
  • Childcare expenses
  • Moving expenses
  • Carrying charges and interest expenses
  • Deduction for residents of a designated remote area
  • Disability supports deduction
  • Social benefits repayment

What's taxable income?

Your taxable income is your total income minus all your deductions. Your taxable income is used to figure out the amount of Québec tax you owe before your refundable and non-refundable tax credits are claimed. 

What are non-refundable tax credits?

Much in the same way federal non-refundable tax credits reduce your federal tax owing, Québec’s non-refundable tax credits lowers the amount of taxes you’re required to pay to the government of Québec.

Generally speaking, if the total of these credits is more than the Québec tax you owe, you won’t receive the difference back as a refund. You will, however, receive a refund if the amount of taxes you’ve already paid (or the taxes paid by your employer on your behalf) to the government is more than what you owe once these credits have been applied.

For example, let’s say your total provincial non-refundable tax credits for 2017 is an even $1,000. If, while completing your return your provincial tax owing is calculated to be $750, the best your provincial non-refundable credits can do is reduce this amount to $0.

If, however, your taxes withheld at source (for example, by your employer) equals $750, applying these credits to your return might actually reduce your tax owing to a point where you’ve paid too much tax during the year. If that’s the case, you’ll receive the difference as a tax refund.

Refer to the list below for some of the more common non-refundable credits you’re likely to claim on your return. For a full list, refer to Revenu Québec’s website.

  • Basic personal amount
  • Expenses for medical services not provided in your area
  • Interest paid on student loans
  • Tax credit for tuition or examination fees

What is income tax on taxable income?

This is the amount of tax you need to pay on your taxable income. Your taxable income is your total income minus your deductions and non-refundable tax credits. Québec tax rates are then applied to the different tiers of your income; the amount you’re left with is your Québec tax payable.

For example, let’s say your taxable income for the year is $65,000. The way Québec’s tax brackets are designed, a tax rate of 16% is applied to the first $42,705 of your income while a slightly higher rate of 20% is applied to the remaining $22,295. This means that your provincial tax owing for the year would be $11,292:

$42,705 x 16% = $6,833
$22,295 x 20% = $4,459

See all 2017 Québec tax rates

 

Income tax and contributions

There are certain credits that can be subtracted from your tax owing, and certain contributions that can be added, to reach your total income and contributions (Line 450 of your Québec TP-1). Some of the credits that help reduce your amount owing include:

  • Québec political contributions
  • Dividend tax credit
  • Tax credit for the acquisition of Capital régional et coopératif Desjardins shares
  • Tax credit for a labour-sponsored fund and
  • Credits transferred from one spouse to the other

On the other hand, certain contributions that you’ve made during the year will increase the amount owing. The amounts include:

  • Additional contribution for subsidized educational childcare
  • QPIP premium on income from self-employment or employment outside Québec
  • Advance payments of tax credits
  • Special taxes
  • QPP contribution on income from self-employment
  • Contribution to the health services fund
  • Premium payable under the Québec prescription drug insurance plan and
  • Health contributions

Note: If you’re claiming any of the following amounts, you can choose to reduce the amount you’re claiming instead of transferring the unused amount to your spouse so that you can use them on a future return:

  • Medical expenses
  • Interest paid on a student loan
  • Tax credits for donations and gifts
  • Tax credit for tuition and examination fees
  • Foreign tax credit
     

Income tax and other credits

The income tax you’ve already paid (like the Québec income tax withheld by your employer) along with amounts that you might have overpaid during the year like QPP or CPP contributions are reported here, with your other refundable credits.

Refer to the list below of some of the more common refundable credits you’re likely to claim on your return. For a complete list, refer to Revenu Québec’s website.

  • Tax credit for childcare expenses
  • Tax credit for caregivers
  • Tax credit for children’s activities
  • Solidarity tax credit
  • Refundable tax credit for medical expenses

 

What are spousal refund transfers?

Revenu Québec allows you to transfer part or all of your refund to your spouse to help reduce their tax owing. Before you transfer any of your refund to your spouse, there are just a couple of things that you should know:

  • The amount you transfer can’t be more than what your spouse owes to Revenu Québec (to be sure, check the amount found on line 475 of his or her Québec return)
  • Once you’ve made the transfer, you won’t be able to cancel or change the amount being transferred
  • Even if you’ve only transferred a portion of your refund to your spouse, you won’t be able to request an accelerated refund on the remaining refund amount
  • Before Revenu Québec transfers a portion of your refund to your spouse, they reserve the right to use all or part of your refund to pay any debt you owe to the government (for details refer to Revenu Québec’s website)

Unfortunately, if your spouse passed away in 2017, you won’t have the option to transfer a portion of your refund to cover a balance due for the 2017 tax year.

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