Reporting Social Assistance Payments on Your Tax Return

Reporting Social Assistance Payments on Your Tax Return

April 13, 2020

Most Social Assistance payments are reported two places on your tax return. When you report them twice, they determine your eligibility for certain tax benefits. But you deduct them again to calculate your taxable income.

Social assistance payments pay third parties based on needs, means, or income tests. They include payments for shelter, food, and clothing for impaired or elderly individuals.

These payments are not taxable. But they add to your net income to calculate your tax benefits properly.

See also ‘Can you get a tax refund if you’re on welfare?

Reporting Social Assistance Payments on your tax return

When you receive Social Assistance (SA) payments in the tax year, you receive a T5007 slip with the SA payments in box 11. The amount in box 11 goes on lines 14500 and 25000 of your tax return. But, if you received these payments for a foster person in your household, usually you don’t report them.

The SA payments you report on line 14500 (previously line 145), are added to any income you have from employment, your business, any investments, and other sources. The total determines your eligibility for the Canada Child Benefit, the GST/HST tax credit, territorial or provincial benefits and other non-refundable tax credits.

But your Social Assistance is not taxable income. That’s why you fill in line 25000, too. Social Assistance payments then subtract again, so you don’t pay any income tax on them.

Note: If married or living common-law, the person with the higher net income reports the SA payments. Your marital or partnership status counts only on December 31st. Use the amount on line 24600 (net income) to compare and decide who has the higher net income.

Reporting Social Assistance Payments on your tax return means adding and then subtracting the amounts. Your SA is not taxable. But it does help determine your eligibility for several federal and provincial tax benefits. CloudTax makes these calculations for you automatically.

Nimalan Balachandran is the Founder & CEO of CloudTax, an income tax filing platform, certified by the Canada Revenue Agency, that allows simple tax filers to file their taxes from home. He was a former employee at the Canada Revenue Agency, and has been in the tax preparation industry for over 10 years. His goal was to bring his passion for technology and assisting Canadians in minimizing their taxes together, by building new software that allows Canadian residents to file simple taxes on their own. Along with his background in accounting, finance, artificial intelligence & business strategy from Seneca College and Massachusetts Institute of Technology, Nimalan has also worked as a Financial Advisor at Sun Life Financials. Nimalan also co-founded a not-for-profit organization, ATI Foundation, serving individuals with intellectual and physical disabilities in the Greater Toronto Area.


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