Taxable Benefits, Tax Credits, and Deductions

The Income Taxes page within Snap allows you to customize default settings and add taxable benefits, indicate if a client is eligible for additional federal and provincial non-refundable tax credits, and enter applicable tax deductions for the client.

Select Scenario Setup -> Settings -> Income Taxes.

Certain tax credits and deductions are applied by default. These credits and deductions are listed under the section Apply the following tax credits and deductions.  If you do not wish to apply these default credits and deductions you can uncheck the checkbox. 

Snap automatically adjusts the client's federal personal amount based on their total Taxable Income.

Additional Non-Refundable Tax Credits:

To add additional non-refundable tax credits, (such as a disability tax credit) you can enter the amount in the fields as shown in the following screenshot. The amount entered in the additional non-refundable tax credits field is:

• automatically multiplied by the lowest tax rate to calculate the amount to reduce the federal and/or provincial tax.
• applied for all years of the projection (unless you enter a From Age or To Age to reflect that the credit will begin some year in the future, or that it's expected to stop in a future year).
• indexed with the General Inflation rate (unless you enter a percentage value in the Indexing Rate field).

This example shows a disability tax credit being entered for a resident of Ontario in 2024.  If the non-refundable tax credit is transferrable, you may wish to enter the credit under the Income Taxes settings for the spouse.

To see the impact of the additional tax credits on the federal and provincial taxes, view the Tax Breakdown table.  From the Planning page, click the blue icon at the top of the Total Tax column.

A good resource for the federal and provincial non-refundable tax credit base amounts for 2024 is taxtips.ca. 

Additional Tax Deductions and Taxable Benefits:

The amount entered for additional tax deductions will decrease the taxable income by that amount for all years of the plan (unless you enter a From Age or To Age to reflect that the deduction will begin some year in the future, or that it's expected to stop in a future year).  Both federal and provincial tax calculations will be impacted.

The amount entered for additional tax benefits increases taxable income by the specified amount each year of the projections (unless you enter a From Age or To Age to reflect that the benefit will begin some year in the future, or that it's expected to stop in a future year, for instance when the client retires).  This will increase the amount of tax your client pays and therefore decrease the available cash flow.

Both of these values are indexed with the General Inflation rate unless you enter a percentage value in the Indexing Rate field.

The Taxable Income Details table shows the application of the Tax Deductions or Tax Benefits. Click the blue icon at the top of the Taxable Income column to see the details.

In the Taxable Income Details table, the Benefits column displays the Additional Tax Benefits entered.  See the above screenshot. This amount corresponds to Line 11900 - Employment insurance and other benefits in the T1 Income Tax and Benefit Return.