Post Assessment Scrutiny of Rent, Tuition and Education Amount

Canada Revenue Agency (CRA) as indicated in my earlier blog carries out Post Assessment Scrutiny in Spring-Summer after most of the tax returns have been filed with them.

CRA carries out post assessment scrutiny for many items of income, credits and deductions claimed on the taxpayer’s return of income. Rent paid in Ontario and Tuition and education amount is very common and therefore discussed below:

Rent Paid in Ontario:

If you lived in Ontario during and at the end of the year 2015, you can claim rent payments made during 2015 on your tax return for Ontario Trillium Benefit payments. Ontario Trillium Benefit payments are made by the Ontario Government by way of Direct Deposit payments from July to June each year. If the total benefit amount is below $300, Ontario Government usually pays it in one shot.

Rent payment is one of the parameters for deciding the amount of Ontario Trillium Benefits and when audited by CRA, it looks for verification of the following aspects:

1)      The Rent payment should be confirmed by the landlord who received the rent during 2015 either by way of a letter or monthly receipts issued by the landlord. In the absence of both, copies of cancelled cheques or bank drafts are acceptable as evidence.

2)      Monthly receipts should show the relevant details such as the name of the taxpayer who paid the rent, amount of rent paid, month for which the rent was paid, address for which the rent was paid.

3)      The rent payment should be for a principal residence which means that you should be living in the place for which the rent is claimed.

4)      If the you changed your residence during the year, separate receipts/letter should be provided for each residence.

5)      Lease agreements cannot be provided in the place of rent receipts since CRA looks for proof of payment and legality of tenancy.

Tuition and Education Credit Claimed:  

CRA Looks for following details when the Tuition and Education Amount is claimed on the Tax Return:

1)      The amount of Tuition fees paid.

2)      The education months for which tuition fee paid.

3)      The name of the course/program for which it is claimed.

4)      The name of the Institution who issued the receipt.

5)      The name of the taxpayer who claimed it.

6)      The tuition fees receipt should be printed and not handwritten.

If the above proofs are not submitted within a period of 30 days normally, CRA will disallow the same and can allow the claim when the proof is submitted after 30 days.