Schedule K - Premium Payable under the Québec Prescription Drug Insurance Plan

In Taxprep, it is assumed by default that the taxpayer and the spouse were insured throughout the year when an amount is entered in the T4 slip (box 85) and the RL-1 slip (box J, P or 235), or on the T4A slip (box 135) or the RL-22 slip. You can cancel this assumption by clearing the box Calculation made for Schedule K from the group insurance plan (slips T4, RL-1 and 22) in the Tax Preparer’s Profile. In addition, you have to modify the months selected in Schedule K when the taxpayer is covered for part of the year only.

The software prints Schedule K and calculates the premium payable for an individual that moved to another Canadian province taking into account the full year’s income. To do so, you must have entered the date of the move in the "Residence" section of the Identification form.

If the individual received a retroactive old age pension payment or net federal supplement payment (guaranteed income supplement or spouse’s allowance), you may ask Revenu Québec (RQ) to calculate if it is more advantageous that the portion of the amount that relates to previous years be claimed against the income subject to the Québec Prescription Drug Plan premium for the current taxation year or that an adjustment of both the taxpayer and, if applicable, spouse’s premium be made by RQ. To do so, complete Form TP-766.2-V, Averaging of a Retroactive Payment or of Support, and attach it to the tax return.

When you want to modify the months to check in Schedule K, you must check all the months in which the situation applies.

Everyone registered with the RAMQ must be covered by basic prescription drug insurance provided by a group insurance plan or by the Québec Prescription Drug Insurance Plan (which is administered by the RAMQ). This public plan provides coverage with respect to the cost of medications supplied in Québec. As a rule, persons who are not covered by a group insurance plan must participate in the financing of the public plan by paying a premium.

Note: If the taxpayer was covered by a private or collective insurance plan that reimburses only expenses other than the cost of medication covered by the Québec Prescription Drug Insurance Plan, he or she must pay a premium to the Québec Plan.

An individual who is covered under a basic prescription drug plan offered by a group insurance must also cover the spouse, except if the latter is already covered under a group insurance plan.

The individual may specify, in section K of the Identification form, that the spouse provides information in his respect and pays his premium to the Québec Prescription Drug Insurance Plan and vice versa. To do so, you must select the appropriate box when the situation is applicable for the full year, if not, you will have to complete Schedule K to indicate that the situation is applicable for only part of the year, for example, when the taxpayer has been insured since the month of September.

To modify the months to check that have been calculated by the software, you must check all the months for which the situation(s) applies directly on Schedule K.

Note that the taxpayer can choose to pay the spouse’s premium when family income entered on line 275 (of the taxpayer and spouse) is greater than $26,670. The taxpayer may choose to pay the contribution of his/her spouse who was deceased in the current taxation year.

This choice cannot, however, be made if in the year they separated. In this case, Schedule K must be completed for each taxpayer, and this, without considering the income of the other spouse since the definition of "spouse on December 31" is not applicable. The software automatically applies this calculation. However, if the taxpayer is insured for only part of the year, you must complete Schedule K.

Separation in the year

If the taxpayer was covered throughout the year by basic drug insurance offered by a group insurance plan of which his spouse was a member, Schedule K does not have to be completed and no premium is payable. Rather, you must specify that the individual is covered by the spouse’s plan directly on Schedule K.

Bankruptcy

The premium amount is calculated on the return that you file for the post-bankruptcy period. However, you must take into account all the year’s income.

Death

The amount of the premium is calculated in the final return taking into consideration the income shown in all the optional returns. The "Deceased" form has been modified in order to enter this income.

The exemption situations mentioned at numbers 27, 28, 29, 31 and 33, which concern a person who was 65 years of age or over and who was receiving the net federal supplements, must be adjusted when the person is deceased.

In this situation, the amounts indicated as criteria in these numbers must be replaced by the result of the following calculation:

Amount shown in the number in question	X	Number of months before death (including the month of death)
12

Other Situations (lines 59 and 73 of Schedule K)

You are not required to pay the premium if you are in one of the following situations:

• you are a foreign national and you are not entitled to be reimbursed for the cost of your prescription drugs by the Québec prescription drug insurance plan;
• you are a French national temporarily living in Québec under the Protocole d’entente Québec-France, and in the current taxation year you attended an educational institution recognized by the Ministère de l’Éducation, du Loisir et du Sport on a full-time basis;
• you are a French national temporarily living in Québec under the Entente entre Québec et la France and, in the current taxation year, you performed a remunerated or non-remunerated activity while subject to French law;
• you were resident in a province other than Québec throughout the year, and carried on a business in Québec;
• you were absent from Québec throughout the year;
• you were in situation 28, 29 or 31, but you wish to pay your spouse’s premium. Follow the steps in the next paragraph in order for Taxprep to calculate the premium correctly for this situation.

You were in situation 28, 29 or 31, but you wish to pay your spouse’s premium.

If you are exempt from paying the premium payable under the Québec prescription drug insurance plan, because the situation of code 28, 29 or 31 applies to you, your spouse is not exempt from paying his or her premium and you wish to pay his or her premium, follow the instructions below carefully in order for the premium to be calculated correctly:

• you must replace code 28, 29 or 31 with code A, “You provided the information about your spouse and you choose to pay your spouse’s premium” (note that code A is part of the roll forward process);
• you must override box 59 with an “x” in Part B of your Schedule K;
• you must select the box If you entered an “x” in box 59 and the number of months on line 62 must equal 12;
• you must add the following description on the line Other: Aged 65 with net federal supplements.

The program automatically selects the applicable situation from the following circumstances:

• the taxpayer was receiving social assistance payments throughout the year;
• the taxpayer was, throughout the year, under 18 years of age and was not married;
• the taxpayer was at least 18 years of age, but under 26 years of age, had no spouse, was a student and was dependent on his or her parents;
• the taxpayer lived outside Québec throughout the year and operated a business in Québec;
• the taxpayer was absent from Québec throughout the year;
• the taxpayer had no spouse on December 31 of the current taxation year and the amount entered on line 275 of the tax return does not exceed $16,460;

• the taxpayer had no spouse on December 31 of the current taxation year and the amount of net federal supplements entered on line 148 of the return exceeds $10,314;

• taxpayer had a spouse on December 31 of the current taxation year and the total amount on line 275 of the taxpayer’s and spouse’s returns does not exceed $26,670.

• the taxpayer and the spouse are over 65 years of age and the amount of net federal supplements entered on line 148 of the taxpayer’s return exceeds $6,178;

• the taxpayer is over 65 years of age and the spouse is more than 60 years of age, but under 65 years of age and the amount of net federal supplements entered on line 148 of the taxpayer’s return exceeds $5,701;

• the taxpayer is over 65 years of age and the spouse is under 60 years of age and the amount of net federal supplements entered on line 148 of the taxpayer’s return exceeds $9,633.

In addition, the program determines the months to check for certain partial situations, including:

• The taxpayer died during the year.
• There is a departure or arrival date during the year.
• The taxpayer turned 18 during the year and was not married.
• The taxpayer was between 18 and 26 years of age, had no spouse, was a student and was not the responsibility of his or her parents and a number of months is entered the T2202.
• A number of months is entered the T5007 (RL-5) slip.

However, when the number of months entered on the T5007 (RL-5) slip is less than 12, a diagnostic will advise the preparer that the appropriate months must be checked on Schedule K (by override), as the program assumes that the number of months begins in January (if 3 months is entered, January, February and March will be checked automatically).

In all other cases, use an override to select the box that corresponds to the applicable situation on Schedule K and also select the boxes corresponding to the appropriate months.

• If you are in one of the situations below, contact the Ministère du Revenu to find out what rules apply:
• You became a resident of another province in the current taxation year.
• You were resident in Québec, on December 31 of the current taxation year, but you were also resident in another province during the year.
• You are an immigrant or emigrant.