2 – ELIZABETH & RONALD PAGE: SENIOR COUPLE WITH SPLIT PENSION

Elizabeth & Ronald Page — Senior couple with split pension: complete starter guide for tax preparers 🧾👵👴
Important steps for preparing seniors’ tax returns — pension income splitting & best practices 🧾👵👴
Dealing with the sale of the principal residence — step-by-step guide for tax preparers 🏠🧾
Overview of the tax returns — conceptual & practical guide to preparing seniors’ T1s (with ProFile steps) 🧾👵👴
How province changes the tax return — will the pension split amount change? 🗺️🧾

Elizabeth & Ronald Page — Senior couple with split pension: complete starter guide for tax preparers 🧾👵👴

Quick orientation: this is a standalone, beginner-friendly knowledgebase for preparing a retired couple’s T1 return (pensions, RRIF withdrawals, CPP/OAS, instalments, and a home sale). Every step includes practical notes and Intuit ProFile walkthroughs so you can follow along even if you’ve never used tax software before.

1) At a glance — what this client file usually contains ✅

Personal details (names, DOB / ages, marital status, new & former addresses).
Pension & retirement slips: T4A (pension/annuity), T4A(P) (Canada Pension Plan benefits), T4A(OAS) (Old Age Security), T4RIF (RRIF withdrawals), possibly T4RSP (RRSP annuity/transfers). Canada+1
Investment slips: T3/T5 for interest, dividends, capital gains.
Medical receipts (including out-of-country invoices).
Instalment payment records (amounts prepaid during the year). Canada
Sale of principal residence — you’ll likely need Schedule 3 and form T2091(IND) for designation and capital gains calculation. Canada+1

2) Preparation checklist before opening ProFile 🧰

Collect all original slips (T4A, T4A(P), T4A(OAS), T4RIF, T3/T5). If client can’t find slips, get CRA My Account or MyServiceCanada printouts. Keep copies. Canada+1
Proof of identity info: DOB (accurate ages matter for credits), SIN, mailing address (current & previous if moved), and dates of sale of property (if sold).
Instalment confirmation (bank statements or CRA Instalment Reminder / INNS1/INNS2). Canada
All receipts for medical & other itemized claims; record which spouse paid what (helps for optimal tax credit allocation).

3) Start the return in Intuit ProFile — step-by-step (for absolute beginners) 🖥️✍️

These steps assume you have ProFile installed and a valid licence/module for T1 returns. ProFile’s interface groups data by sections (Identification, Income, Deductions, Schedules). Use the Form Explorer or GoTo menu to jump around. Intuit Digital Asset+1

A. Create the client file

Open ProFile → File → New Return → T1 (Canadian Individual).
Enter the client identification: last/first name, SIN, marital status, phone, email, and most importantly date of birth for each spouse. (ProFile will calculate age-based credits automatically when DOB is entered.)
Save the return with an identifiable file name (e.g., Page_E_R_2025_T1).

B. Enter address & residency changes

In Identification → Address enter the current Halifax address.
If they sold a home earlier in the year, also record the former address in the property section (you’ll use it for Schedule 3/T2091 later). ProFile links property disposals to Schedule 3 automatically. profile.intuit.ca+1

C. Enter income slips (precise slip entry)
ProFile uses a dedicated Slip Entry or Slip menu. You’ll create a new slip and choose the slip type exactly as on the client’s paper slip.

Entering a T4A (pension / other income):
1. Go to Slip → New → T4A.
2. Type the payer information (name of pension payer), then enter amounts into the box numbers that match the paper slip (e.g., box 16, 18, etc.). ProFile will map these to the correct T1 lines. (If the pension is pension income, it usually flows to line 11500 / 11599 depending on type.) Canada
Entering T4A(P) — CPP benefits:
1. Slip → New → T4A(P) (the specific T4A(P) slip).
2. Enter the amounts shown on the slip (boxes as shown). These amounts are used to populate lines for CPP benefits on the T1. Refer to CRA slip to confirm which box maps to which T1 line. Canada
Entering T4A(OAS) — Old Age Security:
1. Slip → New → T4A(OAS) and enter amounts. ProFile maps to the proper T1 line for OAS. Canada
Entering T4RIF — RRIF withdrawals:
1. Slip → New → T4RIF. Enter gross payment amounts and any income tax withheld exactly as shown. The T4RIF will populate pension/line items (e.g., line 11500 or 13000 depending on type). Confirm box-to-line mapping while entering. Canada+1

Tip: Always match box numbers exactly. ProFile displays slip box labels — enter the numbers from the client’s paper or PDF slip.

D. Enter CPP & OAS amounts not on slips

If CRA/MyServiceCanada provided a statement but you don’t have the slip, enter the amounts into the appropriate income lines in ProFile (search for CPP/OAS in the form explorer). If you do have a T4A(P) / T4A(OAS), prefer slip entry — it’s auditable and carries metadata.

E. Investments (T3/T5)

Use Slip → New → T3 or T5 and enter boxes for interest, dividends, capital gains. ProFile will auto-place amounts on Schedule 3 or income lines.

4) Reporting the sale of their house (principal residence) — CRA rules & ProFile steps 🏠💡

Legal requirement: For sales from 2016 onward, you must report the sale on Schedule 3 and T2091(IND) (if claiming the principal residence exemption). If the property was the principal residence for all years owned, the designation is usually straightforward. Canada+1

In ProFile:

Open the Schedule 3 (Capital Gains) form (use the Form Explorer → Schedules → Schedule 3).
Find S3 Principal Residence Detail or the property disposal table. Click Add Property / New.
Enter: address, year of acquisition, proceeds of disposition (selling price), outlays & expenses on sale (legal fees, commissions), and percentage ownership (if split). ProFile will create the linked T2091(IND) automatically for that property. QuickBooks+1
If the property qualifies as principal residence for all years, check the designation box — ProFile will calculate the exempt portion and normally reduce the taxable capital gain to zero (if fully qualified). If only partially eligible, ProFile computes the taxable portion.

Note box 📝
If the taxpayer used part of the home for business or claimed CCA (capital cost allowance) in prior years, the PRE rules are more complex and you must prorate the gain. Seek guidance or mark for review.

5) Medical expenses (including out-of-country receipts) 🏥✈️

CRA accepts eligible foreign medical costs if they would be deductible in Canada and you have supporting receipts. Total eligible medical expenses are claimed on Line 33099/33199 (or ProFile’s Medical Expenses section). Include provider name, date, and convert foreign amounts to CAD (document conversion method). Keep invoices.

ProFile steps: Use Deductions → Medical Expenses → add receipts with dates and amounts (ProFile will sum and apply the lesser/threshold rule automatically).

6) Instalment payments — where to record prepaid tax amounts 💸

Enter the total instalments paid for the tax year on Line 47600 of the T1. ProFile has a “Payments & Credits” area where you enter CRA instalment payments (or use the CRA slip/reminder totals). These amounts reduce balance owing or increase refund. Canada

ProFile steps: Form Explorer → Payments (or search for line 47600) → enter combined instalments for the year (e.g., Ronald $4,628 + Elizabeth $3,480 totals if they each paid separately and both amounts apply to the return).

7) Splitting pension income & optimizing tax position for seniors 🎯

For couples, pension splitting rules allow a portion of eligible pension income to be allocated to the spouse (up to 50%) — this can reduce family tax. Typical eligible incomes: lifetime pension income (certain pension types) and some other qualifying amounts. Verify eligibility and document client consent (signed Form T1032 for Quebec? check provincial rules).

ProFile action: Search for pension income splitting or use the Pension Splitting worksheet in ProFile (it will ask amount to allocate and produce the required schedules). ProFile then adjusts both spouses’ returns automatically.

Note box ⚠️
Not all pension amounts are eligible for splitting (e.g., RRIF withdrawals beyond certain ages). Confirm type of pension first (T4A box details help determine eligibility).

8) Finalize, audit & file — ProFile best practices ✅

Run ProFile Auditor / Error Check: fix missing SINs, mismatched slip boxes, or unfilled mandatory fields. ProFile flags red Xs for problems and green checks for success. Intuit Global
Generate T2091(IND) and get client signature if you claimed PRE. Keep a signed copy. profile.intuit.ca
Reconcile instalments & tax withheld (ensure totals match client records and slips).
EFILE via ProFile if client authorizes — prepare, review, and submit. ProFile supports e-filing and internet filing of many slip types. Intuit Global

9) Common pitfalls & pro tips (do these every time) 🛑✨

🔎 Age errors: Wrong DOB will miscalculate age credits — double-check.
🧾 Mismatch between slips and return: If CRA later issues a slip you didn’t include, the return will be reassessed. Always enter every slip. Canada
🏷️ Principal residence paperwork: Even if the entire gain is exempt, CRA requires Schedule 3 + T2091 — don’t skip it. Canada
💳 Instalment records: Keep proof of each instalment. If a payment isn’t on CRA’s INNS1 reminder, still include it on line 47600 with supporting proof. Canada
📁 File everything: Keep copies of slips, receipts, and signed forms for 6 years (CRA standard).

10) Short reference table — where common slips flow on the T1

T4A (pension/annuity) → pension income lines (e.g., 11500/11600 depending on type). Canada
T4A(P) → CPP benefits line (as per slip mapping). Canada
T4A(OAS) → OAS line. Canada
T4RIF → RRIF income lines (map boxes to line numbers). Canada

Closing checklist — file-ready ✅

DOBs, SINs, addresses verified.
All slips entered (T4A, T4A(P), T4A(OAS), T4RIF, T3/T5).
Medical receipts entered and totaled.
Instalments recorded on line 47600. Canada
Schedule 3 & T2091 completed for house sale (signed if claiming PRE). Canada
Pension splitting considered and applied if advantageous.
ProFile auditor run and errors cleared. Intuit Global

Important steps for preparing seniors’ tax returns — pension income splitting & best practices 🧾👵👴

🎯 Ultimate beginner-friendly reference for tax preparers: how to prepare a senior couple’s T1, when and how to split pension income, Practical ProFile walkthroughs, common pitfalls, and checklist items you must never skip. Clear, step-by-step, and ready to use even if you’ve never opened tax software before.

Quick orientation (one-line): Enter everything first, then optimize and test scenarios (pension split + reports of medical, donations, investment allocations). Never assume 50/50 — calculate. 🔍

What you’ll learn in this section

Which retirement incomes are eligible to be split. ✅
Exact, repeatable ProFile steps for pension splitting and scenario testing. 💻
How to allocate slips (T4A, T4A(P), T4A(OAS), T4RIF, T3/T5) for couples. 🧾
Practical tips, documentation to collect, and audit-safe recordkeeping. 📂

Why pension splitting matters (simple):
Splitting eligible pension income between spouses can lower the couple’s combined tax bill by shifting taxable income from the higher-tax spouse to the lower-tax spouse. It’s not automatic — you must elect it, and the optimal amount is usually a calculated value, not automatically 50/50. ⚖️

🛠️ Step 0 — Documents & facts to collect before you begin

Full identification for both spouses (names, DOB, SINs, current & any previous addresses during year). ✔️
All slips: T4A (pension), T4A(P) (CPP benefits), T4A(OAS) (OAS), T4RIF (RRIF withdrawals), T3/T5 (investment income), RRSP/T slip copies. ✔️
Instalment records (dates & amounts). ✔️
Medical receipts (including foreign receipts with CAD conversion note). ✔️
Signed client consent form to proceed with pension splitting (T1032 election signed by both spouses). ✔️
Notes on non-standard items: prior CCA claims on principal residence, business use of home, or any attribution concerns. ✔️

Important rule of thumb (do this every file):
Enter every slip and all credits/deductions first into the return (both spouses), then run pension-splitting optimization or manual scenarios. This ensures the optimizer considers all interactions (age credits, OAS clawback, surtaxes, credits that phase out). ✅

Which incomes are typically eligible for pension splitting (and which aren’t)

Usually eligible: lifetime pension income from an employer pension plan (pensions reported on T4A with pension box), some RRIF income once the annuitant is age 65+ (check slip type and CRA rules).
Not eligible (or limited): CPP/QPP and OAS are not split. RRSP lump-sum withdrawals are generally not eligible for splitting (unless they become a pension-type payment later). Investment income (T3/T5) is not a pension — it can be allocated between spouses for reporting purposes only if they legitimately own the investments or share beneficial ownership, but that’s different from “pension splitting.”
Practical note: Always confirm the slip type and box numbers — they tell you whether the income is pension/annuity or another type. 🔍

Intuit ProFile — detailed, step-by-step workflow for pension splitting (for absolute beginners) 💻

These steps assume you have access to ProFile’s T1 module. Follow them in order — DO NOT attempt to calculate the split until the full returns are entered.

1) Create and save the client file

ProFile → File → New Return → T1 (Individual).
Enter identification for both spouses (full name, SIN, DOB, current address). Save the file with an intuitive name (e.g., Page_Ronald_Elizabeth_T1_YYYY).
Tip: Enable autosave if available.

2) Enter all slips for both spouses (first pass)

Use Slip → New and pick the correct slip type:
- T4A (pensions/annuity) — fill box numbers exactly as on slip.
- T4A(P) (CPP) — enter if provided (but note CPP is not splittable).
- T4A(OAS) (OAS) — enter OAS amounts (not splittable).
- T4RIF (RRIF withdrawals) — enter gross and tax withheld.
- T3/T5 (investment slips) — enter boxes for interest, dividends, capital gains.
Important: Match box numbers exactly. ProFile maps boxes to T1 lines automatically.

3) Enter deductions & credits for both spouses

Medical expenses, CPP/QPP contributions, charitable donations, disability amounts, pension adjustments, etc. Use the Deductions and Credits panels or search the Form Explorer for each line.

4) Enter payments & instalments

In ProFile, go to Payments (or search for line 47600) and enter total instalments paid for the year for each spouse if they paid separately — then reconcile total payment amount to T1 payments section.

5) Run the ProFile Auditor / basic error check

Before optimization, run the built-in check to clear missing SINs, empty mandatory fields, or invalid box values. Fix errors flagged in red.

6) Open the T1032 form (joint election to split pension income)

In the Form Explorer search for T1032. Open the form on the pensioner’s return (choose the spouse with the higher pension as the “pensioner” in the worksheet). T1032 is the CRA election form you must complete and retain (both spouses must sign).

7) Use the ProFile Pension Split Optimizer (recommended)

In ProFile: with T1032 open, locate the worksheet/optimizer tool (often a right-click context menu or an “Optimize” button).
Right-click in the T1032 worksheet and choose Optimize (or Run optimizer). ProFile will run multiple iterations and calculate the dollar amount of pension to allocate to the spouse that yields the lowest combined tax.
When the optimizer finishes, it will present a recommended split amount (e.g., $X). Accept the recommendation or test alternate amounts manually if you wish to compare scenarios.

8) Elect & apply the split

After you accept, ProFile will:
- Put the split amount on the lower-income spouse’s line 116 (or equivalent line) and
- Deduct it on the higher-income spouse’s line 210 (pension income deduction).
ProFile will also create the T1032 pages needed for client signature. Print/sign and keep in file.

9) Scenario testing (must do at least one)

Run scenarios after optimization: toggle where donations, medicals, or capital losses are claimed (all on one spouse vs split between spouses) and re-run the optimizer to see the combined tax change. This reveals interactions (e.g., moving donations to the spouse who will receive the pension split might increase total savings).
Save each scenario as a separate file copy (e.g., Page_scenario_A, Page_scenario_B) so you can show clients comparative numbers and keep an audit trail.

10) Final audit & EFILE

Run ProFile’s Auditor one more time. Confirm totals of instalments, tax withheld, and that T1032 is present and signed. Use ProFile’s EFILE function if the client authorizes electronic filing.

Practical examples & scenario ideas (how to test) 🧪

Example scenario to test manually (conceptual, not exhaustive):

Ron pension: $40,000; Liz pension: $5,000; other income split evenly.
You enter everything, run optimizer → ProFile might recommend splitting $7,105 from Ron to Liz (example). That small shift could reduce Ron’s tax bracket and increase Liz’s basic credits, producing a net family tax saving.
Always compare combined tax payable (Ron tax + Liz tax) before and after the split — that’s the metric that matters.

Common mistakes new preparers make (and how to avoid them) ❌➡️✅

Mistake: Splitting pensions before entering ALL other income and deductions.
Fix: Enter everything first — then run optimizer.
Mistake: Assuming 50/50 is best.
Fix: Run the optimizer or test multiple scenarios — the best split is usually not 50%.
Mistake: Forgetting to get client signatures for T1032.
Fix: Generate T1032 from ProFile, have both spouses sign, keep signed copy.
Mistake: Trying to split CPP or OAS (they are not eligible).
Fix: Only split eligible pension/annuity income per CRA rules.
Mistake: Neglecting interactions (OAS clawback, age credits, surtaxes).
Fix: Always use software optimizer or test scenarios — these interactions determine the true benefit.

Allocation of investment income & slips — best practice 🧾

If investment slips are in one spouse’s name but investments are jointly owned in reality, you may report a reasonable split between spouses. Document the rationale in your client file (notes explaining shared ownership).
Keep proof of beneficial ownership or client statements that both spouses share the investment benefits. The CRA may query, so keep documentation.

Documentation & audit trail — what to file & keep 📂

Signed T1032 (joint election form). ✅
Copies of all slips (T4A, T4RIF, T3, T5, T4A(P), T4A(OAS)). ✅
Printed scenario comparisons considered (e.g., combined tax BEFORE and AFTER split). ✅
Proof of instalments (bank records or CRA statement). ✅
Notes explaining why you chose the split amount (optimizer result + brief explanation). ✅
Keep everything for six years (CRA standard retention period).

Edge cases & red flags — when to pause and escalate ⚠️

If the couple has significant benefit clawbacks (OAS clawback) or one spouse’s income after split will trigger loss of a benefit, test carefully.
If attribution rules might apply (large transfers between spouses that trigger attribution), seek senior advisor help. Attribution is rare but can apply in some family arrangements.
If the couple has mixed ownership of investment accounts, ask for documentation showing beneficial ownership or obtain a signed declaration.

Quick cheat-sheet checklist you can print and use now ✅

Collect ALL slips (T4A, T4A(P), T4A(OAS), T4RIF, T3/T5).
Collect instalment receipts & medical receipts (foreign receipts converted to CAD).
Enter all slips & credits in ProFile for both spouses.
Run ProFile Auditor — fix red Xs.
Open T1032 on the pensioner’s return and run the ProFile optimizer.
Accept recommended split (or test alternate splits) and save scenario files.
Print & get T1032 signed by both spouses. Keep copy.
Final audit & reconcile instalments/tax withheld.
File (EFILE if authorized) and retain documentation for 6 years.

Final pro tips (short & powerful) ✨

Always show the combined family tax numbers to the client — they care about household tax, not just individual lines. 👪
Keep scenario screenshots / saved files — they prove you tested options if CRA asks. 📸
When in doubt, model three cases: (A) no split, (B) optimized split, (C) forced 50/50 — present the best with rationale. 📊

Dealing with the sale of the principal residence — step-by-step guide for tax preparers 🏠🧾

⭐ Ultimate beginner-friendly reference: what to collect, how to decide whether and how to claim the Principal Residence Exemption (PRE), exactly what must be reported on the T1 (Schedule 3 & T2091), and Intuit ProFile step-by-step actions for someone who has never used tax software before. Audit-safe tips, common pitfalls, checklists and short FAQs included.

📌 One-line rule: Even if the entire gain is exempt under the PRE, you must disclose the disposition on the T1 (Schedule 3) and complete T2091(IND) when required.

1) Documents & facts to collect (before you open ProFile) 📂

Property details: full address, date of acquisition, date of sale, selling price (proceeds of disposition).
Purchase price and purchase closing costs (for ACB calculations, if needed).
Selling costs (realtor commissions, legal fees) and other outlays/expenses of sale.
Ownership share (joint tenants / tenants in common / percentage ownership).
Use history: years the property was inhabited as the taxpayer’s principal residence (for each owner).
Any use of the property for business or rental (even part-time) during ownership.
Any previous PRE claims for the same property or another property during the ownership period.
Supporting docs: sale agreement, closing statement, receipts for commissions/legal fees. Keep originals. 🧾

2) Key tax concepts you must understand (short & practical) 🔎

Principal Residence Exemption (PRE): may exempt all or part of the capital gain when a taxpayer sells a property that qualified as their principal residence for the years owned.
Reporting requirement (since 2016): sales of principal residences must be reported on Schedule 3 and the T2091(IND) (or equivalent) must be completed if claiming the PRE. Even if exempt, the disposition is disclosed.
Formula for exempt portion: exempt proportion = (number of years property designated as principal residence + 1) ÷ (number of years owned). The “+1” is a special concession for ownership/occupancy in the year of sale or acquisition — learn when it applies.
Joint owners: spouses or co-owners usually report their share of proceeds and adjust their Schedule 3 entries to reflect their ownership percentage (commonly 50/50 when both are on title).
Business use or past CCA claims: claiming CCA or using the property for business or rental changes or disqualifies PRE for those years — requires pro-rata calculations.
Moving expenses: moving to access better medical care is NOT an eligible reason to claim moving expenses — moving expenses are only deductible in narrow cases (employment, business, or to attend full-time post-secondary studies under CRA rules).

3) High-level flow you will follow in the return 👣

Gather documents and verify ownership/use facts.
Decide whether the PRE will be claimed for all or part of the ownership period.
Compute proceeds, allowable outlays (selling costs), and ACB (only needed if there’s a taxable gain or to document calculation).
Complete Schedule 3 (Capital Gains) — add the disposition line and indicate the PRE claim.
Complete T2091(IND) (Designation of a property as a principal residence) — show years designated.
Keep supporting documents and a short file note documenting your reasoning and calculations.

4) Intuit ProFile — exact step-by-step (for someone who has never used a tax package) 💻

These instructions assume you have ProFile and the T1 module available.

A — Open / create client file

Open ProFile → File → New Return → T1 (Canadian Individual).
Enter client identification details (name, SIN, DOB, address). Save the file.

B — Tell ProFile the taxpayer disposed of a property

In ProFile’s main return window, open the Identification / Information page or the return summary where it asks “Did the taxpayer dispose of property and claim the PRE?” — mark Yes (if applicable). This flags the return to include Schedule 3/T2091.

C — Enter the disposition on Schedule 3

Open the Form Explorer (or search for “Schedule 3” in ProFile).
Open Schedule 3 — Capital gains (dispositions) for the taxpayer.
Scroll to the section that captures real property dispositions (principal residence details). Click Add or New Property.
Fill in the required fields:
- Description / address of property (full civic address).
- Date acquired and date sold.
- Proceeds of disposition (selling price).
- Outlays & expenses on sale (commissions, legal fees).
- Adjusted cost base (ACB) and acquisition costs (if you want to record/calculations — useful if gain exists).
- Ownership percentage for this taxpayer (e.g., 50% if joint owners).
Save the property line. ProFile will show the split of proceeds automatically if you entered the same property for both spouses and indicate ownership shares.

D — Complete T2091(IND) within ProFile

Still in Form Explorer, search for T2091(IND) or find it linked from Schedule 3.
Open the T2091 page — ProFile often populates it from the Schedule 3 entry.
Enter the number of years the property was designated as a principal residence. For most simple cases where the taxpayer lived in the home every year and never claimed PRE on another property, this will equal years owned (and you’ll include the +1 in the formula).
Confirm the prefilled computation: ProFile will calculate the exempt portion and show whether any taxable capital gain remains. If the exempt portion equals 100%, the capital gain reported on Schedule 3 should be zero (but the disposition still appears on Schedule 3/T2091).
If both spouses are on title, repeat the Schedule 3 property entry for the other spouse with the correct ownership percentage so ProFile can reconcile both returns and tie to a single T2091.

E — Joint ownership / splitting proceeds

If the property is jointly owned (typical for spouses), enter the same property on both spouses’ Schedule 3 forms and set ownership percentages (most common = 50/50). ProFile will then show each spouse’s share of proceeds and link to the same T2091 designation.
If ownership is not 50/50, enter the precise ownership percentage and reason (documentation required).

F — What to do if there is a partial exemption

If the property was not the principal residence for all years owned (for example, rented out some years or used for business), you must prorate the exempt portion. Enter exact years designated on T2091 and ensure ProFile calculates the taxable portion. Document the rationale and any relevant events (periods of rental, CCA claimed, etc.).

G — Save, print & retain

ProFile will generate Schedule 3 and T2091 pages you can print and keep in the client file (even if not sent to CRA separately). Keep these printed pages with sale supporting documents. Retain for at least 6 years.

5) Practical examples (common easy scenarios) 🧾🔢

A — Simple full PRE (most straightforward)

Bought 1992, lived there entire time, sold 2022 for $590,000 (50% share each for married couple).
Action: On each spouse’s Schedule 3 enter half the proceeds (or reflect ownership share). Complete T2091 showing years lived = years owned. Result: PRE covers full gain → no taxable capital gain shown.

B — Partial PRE (rental or business use in some years)

If property was rented for 3 of 30 years, you must prorate the PRE and calculate taxable capital gain for the 3 years of non-principal residence. Enter those details in T2091 and keep documentation.

6) Common pitfalls & how to avoid them ⚠️✅

Pitfall: Not reporting the sale at all because “gain = $0.”
Fix: Report on Schedule 3 and complete T2091 even when fully exempt — CRA requires disclosure.
Pitfall: Claiming moving expenses when moving for health reasons.
Fix: Moving expenses are deductible only when move is for work (or school) under CRA rules — don’t claim moving expenses for medical/health-related relocations.
Pitfall: Forgetting to split proceeds according to legal ownership.
Fix: Confirm legal title ownership and enter exact ownership percentages in ProFile. If spouses want to split differently for tax purposes, document the beneficial ownership and rationale.
Pitfall: Claiming PRE while previously claiming PRE on another property for the same year(s).
Fix: Only one property per family unit may be designated per year — evaluate and document choices carefully.
Pitfall: Claiming PRE after previously claiming CCA on the property.
Fix: Prior CCA claims create recapture/tax consequences and can limit PRE — escalate complex cases to senior advisor.

7) Audit-safe documentation & file note (must keep) 🗂️

Signed client intake confirming ownership & occupancy periods.
Sale agreement and closing statement.
Receipts showing commissions/legal fees/other sale expenses.
Signed T2091 printout and copy of Schedule 3.
Short file note explaining designation choice (e.g., “Client lived in property from purchase date to sale; no rental/use; claim PRE for entire period”).
Keep all records for six years.

8) Quick decision flow chart (TL;DR) 🧭

Did client sell property during tax year? → Yes → go to 2.
Was property used as principal residence for all or some years? → Yes → go to 3.
Is PRE being claimed? → Yes → Report on Schedule 3 and complete T2091.
Any rental/business use/CCA claimed? → Yes → compute prorated PRE & taxable gain; document.
File and retain supporting docs. ✅

9) Short FAQ (beginner questions) ❓

Q: If the sale is fully exempt, do I still need to do anything?
A: Yes — you must disclose the sale on Schedule 3 and complete T2091 to claim the PRE.

Q: Do I always split proceeds 50/50 for married couples?
A: No — split according to legal/beneficial ownership. Many couples use 50/50, but if ownership differs you must reflect the actual percentage.

Q: Can the PRE be applied retroactively to prior years?
A: You designate the property for the years you wish to claim; only one property per family unit per year can be designated. Prior returns may need amending if a previous designation was incorrect — handle carefully.

Q: Are moving expenses deductible if they moved for medical care?
A: No — moving for medical reasons is not an eligible reason under the CRA moving-expenses rules.

10) Printable checklist you can use now ✅

Confirm dates of acquisition and sale.
Confirm legal ownership percentage(s).
Collect sale agreement, closing statement, commission & legal fee receipts.
Confirm occupancy history (years lived in property).
Enter property on Schedule 3 for each relevant spouse with correct ownership share.
Complete T2091(IND) showing years designated.
If partial PRE, calculate taxable gain and document reasoning.
Print Schedule 3 & T2091 and save with supporting docs (retain 6 years).

Final tip for new preparers ✨

Always document your assumptions. If you record in the client file why a property was designated as the PRE (dates, absence of rental, no prior PRE claims), you make future review or CRA queries much easier to resolve.

Overview of the tax returns — conceptual & practical guide to preparing seniors’ T1s (with ProFile steps) 🧾👵👴

📚 The ultimate beginner-friendly knowledgebase: what a senior client’s T1 looks like, how to think about the big-picture tax issues for seniors, a clear checklist of what to enter and why, common optimizations (pension splitting, medicals, donations), and exact, step-by-step Intuit ProFile actions you can follow even if you’ve never opened tax software. Audit-safe tips, decision rules, scenario-testing workflow, and printable checklists included.

Quick orientation (one sentence): For seniors, most of the work is data-entry (slips) + a few strategic choices (pension split, allocation of credits/expenses, PRE reporting) — enter everything first, then model optimizations and compare combined household outcomes. 🔁

🔎 What this guide covers (at a glance)

Core components of a senior’s return (slips, credits, special lines).
How to conceptually evaluate a senior return (what to check, why it matters).
Step-by-step ProFile workflow for an entire senior file (from new return → EFILE).
Optimization workflow: pension split, medical allocation, donation placement.
Common pitfalls, audit-proof documentation, and a printable final checklist.

1) Core components of a senior T1 — what to expect and why they matter ✅

Identification & residency — DOBs (age matters for credits), SINs, address(es) during year.
Pension & retirement slips — T4A (pensions/annuity), T4A(P) (CPP), T4A(OAS) (OAS), T4RIF (RRIF). These drive most income lines.
Investment slips — T3/T5 for dividends, interest, and capital gains. Affects taxable income and credits.
Medical expenses — eligible for credit (Line 331/332 depending on province), include out-of-country medicals (converted to CAD).
Instalments & tax withheld — reduces balance owed (Line 47600 etc.). Always reconcile to client bank receipts / CRA notices.
Capital dispositions — Schedule 3 & T2091(IND) for principal residence sales, if any.
Other credits — Age amount, pension income amount, disability (if applicable), caregiver credits, GST/HST credit eligibility checks.
Election forms — T1032 for pension splitting (signed by both spouses) — must be retained.

📝 Note: For seniors, OAS clawback, surtaxes, and age-based credits can interact strongly with income — optimize with the combined family tax as the key metric.

2) Conceptual checklist — the “think before you click” rules 🧠

Enter everything before optimizing: slips, deductions, credits, instalments. Why: interactions (age credit thresholds, OAS clawback, surtaxes) change optimal splits.
Household metric: always compare combined tax payable (spouse A + spouse B) and combined refund/balance. Individual tax reductions that increase household tax are not wins.
Signatures matter: T1032 must be signed by both spouses — if CRA requests and you cannot produce it, the split can be disallowed.
Documentation: keep receipts, signed election forms, and scenario screenshots — keep for 6 years.
Convert foreign amounts: use a consistent exchange rate method (daily rate or yearly average) and record which you used.

3) ProFile: start-to-finish practical workflow (for absolute beginners) 💻

A — Create & name the return

Open ProFile → File → New Return → T1 (Canadian Individual).
Enter client identification for both spouses (names, SINs, DOBs, addresses). Save file with a meaningful name (Page_Ron_Liz_T1_YYYY).

B — Enter residency / address changes

In Identification/Information page enter current address and prior address if moved during year. (ProFile flags Schedule 3/T2091 when a disposition is indicated.)

C — Enter all income slips (do this for both spouses)

Slip → New → [choose slip type: T4A / T4A(P) / T4A(OAS) / T4RIF / T3 / T5].
Match box numbers exactly to the paper/PDF slip. ProFile auto-maps boxes to T1 lines.
Enter tax withheld fields if present — don’t skip these (lots of students miss tax withheld boxes on T4A(P)/T4A(OAS)).

D — Enter deductions & credits

Use Deductions area for medicals, donations, pension adjustments, CPP contributions, etc.
Enter medical receipts with dates. For foreign receipts, convert to CAD and note conversion method in the file.

E — Payments & instalments

Form Explorer → Payments (or search for line 47600) → enter instalments / remittances paid during the year. Reconcile to CRA instalment slips or bank records.

F — Pension splitting (T1032)

After all slips/deductions entered: search Form Explorer for T1032. Open it on the pensioner’s return (choose the higher pension earner as the “pensioner”).
Right-click in the T1032 worksheet → Optimize. ProFile will iterate and recommend a split amount.
Review: ProFile will place the split on the recipient’s line (e.g., line 116) and deduct it from the transferring spouse’s pension lines (e.g., line 210).
Print T1032 and obtain both signatures. Keep signed form in client file.

G — Scenario testing (mandatory for learning & client presentation)

Save a copy of the return as Client_scenario_A (baseline).
Move medicals/donations between spouses, run pension optimizer again, and save scenario_B, scenario_C.
Compare combined tax payable (line 435 for each spouse, then sum) — choose scenario with lowest combined household tax (not just single spouse savings).

H — Schedule 3 & T2091 (if property sold)

Form Explorer → Schedule 3 → Add Property → complete proceeds, outlays and ownership %.
Open T2091(IND) (linked) and enter years designated. Save printed copy in file.

I — Final auditor & efile

Run ProFile Auditor / Error Check. Fix red Xs.
Reconcile totals: tax withheld + instalments vs CRA notices.
Print returns, obtain signatures (consent + T1032). EFILE if client authorized.

4) Optimization workflow — pension split + medicals + donations (practical rules) 🔧

Rule 1 — Enter everything first
Rule 2 — Compare combined household tax payable (the right metric)

Pension split steps (summary):

Enter slips → run auditor → open T1032 on pensioner’s return → Optimize → review recommended amount → accept and print T1032 for signatures → save scenario(s).

Medical allocation tips:

Claim medicals on the spouse who gets the greatest benefit (often the lower-income spouse), but test: sometimes splitting medical expenses across both spouses produces a better combined result (try scenarios). Convert foreign receipts and keep conversion note.

Donation placement:

Donations can affect surtaxes and credit thresholds; test placing donations on spouse with higher marginal tax rate or where they would create the greatest net household tax reduction.

Testing approach (practical):

Baseline: no pension split, medicals on spouse A. Note combined payable.
Run optimizer; accept recommended split → note combined payable.
Move medicals to spouse B and re-run optimizer → note combined payable.
Compare all combined totals — pick scenario with lowest household payable. Document choices.

5) Common beginner mistakes (and quick fixes) ❌➡️✅

Mistake: Running pension split before entering all slips.
Fix: Enter all information, run auditor, then optimize.
Mistake: Looking at software’s “savings” number instead of combined tax payable.
Fix: Compare combined payable (sum of both spouses’ final payable/refund).
Mistake: Forgetting T1032 signatures.
Fix: Print T1032, get both signatures, file copy.
Mistake: Skipping tax withheld boxes on T4A(P)/T4A(OAS).
Fix: Always scan slip box-by-box and enter tax withheld where shown.
Mistake: Claiming moving expenses for medical-motivated moves.
Fix: Know CRA moving-expense rules: only for work/business or full-time education moves.

6) Audit-proof documentation — what to keep in the client file 🗂️

Signed client intake & ID (DOBs, SINs).
All slips (copies) and scan of paper originals.
Signed T1032 and any client authorization to efile.
Printouts/screenshots of scenario comparisons showing combined tax outcomes.
Receipts for medicals (with CAD conversion notes), donations, instalment proofs (bank slips).
T2091 & Schedule 3 pages + supporting sale documents (if property sold).
Short file note summarizing the rationale for the pension split and allocation choices.

📌 Pro tip: Put a one-line note at top of file: “Optimizer run on YYYY-MM-DD — selected scenario X as lowest combined tax. T1032 signed.”

7) Short technical reference — key lines & forms to watch (for quick checks) 📋

Line 116 — eligible pension income received by recipient (after split).
Line 210 — pension deduction (transferor).
Lines 33099 / 33199 — medical expense amounts (provincial variants exist).
Line 435 — tax payable (use combined value across both spouses to compare scenarios).
Schedule 3 — capital gains / property disposition reporting.
T2091(IND) — principal residence designation (must complete if claiming PRE).
T1032 — joint election to split pension income (signed by both).

(Note: exact line numbers may vary slightly with tax-year updates — always confirm with current ProFile mapping when preparing returns.)

8) Final quick-print checklist you can use now ✅

All slips entered for both spouses (T4A, T4A(P), T4A(OAS), T4RIF, T3/T5).
Tax withheld fields entered exactly as on slips.
Medical receipts entered and converted (if foreign).
Instalments & payments reconciled and entered.
Run ProFile Auditor & fix errors.
Open T1032 → Optimize after full entry → print & get both signatures.
Run scenario tests for medicals/donations and re-run optimizer if allocations changed.
Complete Schedule 3 / T2091 if property sold.
Save scenarios, print returns, get client signatures, EFILE if authorized.
Keep all documents and retain for 6 years.

9) Final tips for your learning path ✨

Practice with three full sample files: (A) simple retired couple with pensions, (B) retired couple with RRIFs + investments, (C) same as B plus a house sale. Compare scenarios and get comfortable reading slip boxes and the Form Explorer.
Always keep a one-page “why I chose this” note in each file — it becomes invaluable if CRA asks.
When starting out, show clients the combined savings and get written approval for the selected scenario.

How province changes the tax return — will the pension split amount change? 🗺️🧾

Short answer: Yes — the pension split amount recommended by software often changes when you change province, because provincial/territorial tax brackets, surtaxes and non-refundable credits differ.* The pension-splitting mechanism (a joint election on CRA Form T1032) is federal, but the tax effect (how much you save) depends on where the couple files residence at year-end. Canada+1

Why the province matters (conceptual)

Pension splitting itself is a federal joint election (Form T1032). It allows the transferring spouse to allocate up to 50% of eligible pension income to the other spouse for tax-reporting purposes. The election must be completed and signed by both spouses. Canada+1
Eligible pension income excludes government benefits like CPP/QPP and OAS for CRA’s pension-splitting election (CPP has a separate Service Canada “pension sharing” program). That means only certain employer pensions, RRIF/RRSP annuity amounts and qualifying life annuities (rules vary by age/type) are available for T1032 splitting. Canada+1
After you elect a split, the taxable income of each spouse changes — and provincial tax is calculated separately using that spouse’s taxable income and the province’s brackets, surtaxes, and provincial non-refundable credits. Because provinces have different marginal rates and thresholds, the optimal split (the one that produces the lowest combined household tax) commonly differs between provinces. In short: same slips → different province → often different optimal split. Canada+1

Practical effects you’ll see on the return

Total family taxable income stays the same, but the distribution changes. That affects: federal tax, provincial tax, eligibility for provincial credits, OAS clawback thresholds (federal but affected by combined income), and surtaxe thresholds in some provinces.
The software optimizer re-runs its calculations using the selected province’s rate tables and will often recommend a different dollar amount to allocate. (You’ll see different recommended split amounts and a different combined balance/refund after changing province.) Canada+1

Intuit ProFile — exact steps to test a different province and re-optimize the pension split (for absolute beginners) 💻🔁

Open the client file in ProFile and save a baseline copy (e.g., Page_baseline_PROV_NS).
Change the province: go to the Identification / Address section and change the province/territory (enter a valid city/postal code if required). Save.
Reconcile any province-specific fields (e.g., provincial credits, surtax fields, provincial health premiums) — ProFile may prompt or prefill forms specific to that province.
Clear any existing pension split amount (open T1032 on the transferring spouse’s return and set split to zero).
Run the T1032 optimizer: right-click in the T1032 worksheet or use the optimizer button. ProFile will iterate scenarios taking the new province’s tax tables into account and return a recommended split amount.
Compare outputs: note (a) recommended split amount, (b) combined tax payable (sum of both spouses’ line 435 or combined balance/refund), (c) changes in provincial credits/clawbacks. Save this scenario as Page_PROV_ON (or similar).
Repeat for any other provinces you want to compare (e.g., NS → ON → BC). Keep printed screenshots or saved files for your audit trail.

Pro tip: always compare combined household tax payable (sum of both spouses) — not the software’s displayed “savings” relative to the immediately prior scenario — because the optimizer’s displayed savings reflect the scenario currently loaded, not the absolute best across provinces. Canada

Things to check when you change a client’s province (must-do checklist)

Confirm residency date (tax residence is determined at Dec 31; provincial tax uses province of residence on that date).
Re-run T1032 after all slips/deductions are entered — province changes mean you must re-optimize. Canada
Reconcile provincial credits & surtaxes (some provinces have surtax or health premiums that change the marginal benefit of moving income). Canada
Check OAS clawback risk (combined net income can affect OAS recovery tax) after re-splitting. enrichedthinking.scotiawealthmanagement.com
Re-test medical/donation allocation scenarios: moving medicals/donations between spouses before/after splitting can change which province’s rates make the family best off.
Save each provincial scenario with an explicit filename and short file note documenting date, province, and chosen scenario (audit trail).

Realistic examples (conceptual)

If a province has higher marginal rates at the income level of the transferring spouse, shifting income to the lower-rate spouse in a different province could yield larger household savings — or vice versa. For example, moving from a high-rate province to a lower-rate one often reduces the incentive to split (because the high earner already faces lower marginal provincial tax), but the exact effect depends on bracket thresholds and where each spouse’s income sits in those brackets. Always model it. Fidelity Investments Canada+1

Important legal & audit notes (don’t skip)

T1032 must be completed and signed by both spouses for each year you elect to split pension income. Keep the signed T1032 in the file — CRA may request it and will disallow the split if you cannot produce it. Canada
CPP/OAS: CRA pension-splitting election does not include CPP or OAS amounts — those are treated separately (CPP has Service Canada sharing options). Don’t try to split CPP/OAS via T1032. Document the source(s) of income you are splitting. Canada+1

Short FAQ (fast answers)

Q: Does the mechanic of pension splitting change by province?
A: No — the mechanic (T1032 federal election) is the same nationwide. What changes is the tax outcome because provinces have different rate structures. Canada+1
Q: Will the pension split always be different if I change province?
A: Not always. Sometimes the optimal split is similar across provinces; sometimes it’s noticeably different. You must model it — don’t assume. Fidelity Investments Canada
Q: Does CPP/OAS get split by T1032?
A: No — CPP/OAS are not split via T1032. CPP has a separate Service Canada sharing program. Canada+1

Final checklist before you present numbers to the client ✅

Enter every slip & deduction for both spouses.
Run auditor (fix errors).
Save baseline (original province) file.
Change province → re-run T1032 optimizer → save scenario.
Compare combined household tax payable across provinces.
Print scenario comparisons and get client sign-off on chosen approach (and signed T1032).