Enter the amount of any farm income included in net income at the bottom of this schedule. If there is a farm loss, enter this as a negative amount. The program will then update Schedule 4N accordingly.
For further information on farm and restricted farm losses please see Schedule 4N.
Line 121 – Non-deductible meals and entertainment expenses
Meals and entertainment expenses:
- 50% of meals and entertainment expenses are non-deductible.
Expenses for food and beverages for long-haul truck drivers:
- after 2010, 80% are deductible and 20% are non-deductible.
Line 122 – Non-deductible automobile expenses
You can choose to manually enter the non-deductible expenses or provide the information related to each passenger vehicle with regard to interest expenses or leasing costs by completing Forms Automobile Expenses – Non-Deductible Interest Expenses and Other Expenses (Jump code: AUTO INTEREST) and Automobile Expenses – Non-Deductible Leasing Costs and Other Expenses (Jump code: AUTO LEASE)
Line 605 – Income inclusions under 12(1)(x.2)
The amount calculated on the corresponding line 295 is equal to the portion of taxable Crown royalties/Crown charges rebate as determined based on the formula mentioned in paragraph 12(1)(x.2) of the ITA. The detail of this formula is found in note 1 of the worksheet, Deductible and Non-Deductible Crown Payments (Jump Code: ROYALTIES).
Line 605 – Recapture from Schedule 12
The available negative amounts in Sections 1, 2, 3, 4 (only for regular expenses), 6, 7 and 8 will be added, as positive values, on the corresponding line 295.
Line 605 - Ontario Research and Development Tax Credit (ORDTC)
The portion of the Ontario Research and Development Tax Credit (ORDTC) (Schedule 508, line 230) arising from a proxy amount is not considered government assistance (Form T661, line 429d1) that would reduce the SR&ED expenditure pool. However, pursuant to paragraph 12(1)(x), this amount must be included in income in the year in which the credit is received (Schedule 1, line 295). The amount on line 295 will be carried forward automatically as part of the roll forward. Make sure that the amount was received during the taxation year and that this amount has not already been included in a prior taxation year (Form T661, line 429).
Line 605 - British Columbia Research and Development Tax Credit (BCRDTC)
The portion of the British Columbia Research and Development Tax Credit (BCRDTC) (Form T666-Schedule 425, Part 5, line 13) arising from a proxy amount is not considered government assistance (Form T661, line 429c) that would reduce the SR&ED expenditure pool. However, pursuant to paragraph 12(1)(x), this amount must be included in income in the year in which the credit is received (Schedule 1, line 295). The amount on line 295 will be carried forward automatically as part of the roll forward. Make sure that the amount was received during the taxation year and that this amount has not already been included in a prior taxation year (Form T661, line 429).
Line 605 - Alberta Research and Development Tax Credit (ABRDTC)
The portion of the Alberta Research and Development Tax Credit (ABRDTC) (AT1 - Schedule 9, line 120) arising from a proxy amount is not considered government assistance (Form T661, line 429d1) that would reduce the SR&ED expenditure pool. However, pursuant to paragraph 12(1)(x), this amount must be included in income in the year in which the credit is received (Schedule 1, line 295). The amount on line 295 will be carried forward automatically as part of the roll forward. Make sure that the amount was received during the taxation year and that this amount has not already been included in a prior taxation year (Form T661, line 429).
Line 605, Alberta Innovation Employment Grant (IEG)
The portion of the Alberta Innovation Employment Grant (IEG) (AT1 Schedule 29, line 134) arising from a proxy amount is not considered government assistance (Form T661, line 429d2) that would reduce the SR&ED expenditure pool. However, pursuant to paragraph 12(1)(x), this amount must be included in income in the year in which the credit is received (Schedule 1, line 295). The amount on line 295 will be carried forward automatically as part of the roll forward. Make sure that the amount was received during the taxation year and that it has not already been included in a prior taxation year (Form T661, line 429).
Line 705 – Deductible Crown payments
The amount calculated on the corresponding line 295 is equal to the total deductible Crown charges rebate as determined on line (*) of Form Deductible and Non-Deductible Crown Payments (Jump Code: ROYALTIES).
Line 705 – Deduction as per paragraph 20(1)(e) of the ITA
You can manually enter the deductible amount.
You can also provide the information relating to each deductible amount. To do so, complete Form Deduction as per Paragraph 20(1)(e) of the ITA (Jump Code: FINANCING). Each expense entered on this form will be updated to Form Deduction Summary as per Paragraph 20(1)(e) of the ITA (Jump Code: SFINANCING). The total deduction amount as per the summary will be updated to the corresponding line 395.
Note that if you had previously entered an amount on this line and you then choose to complete Form Deduction as per Paragraph 20(1)(e) of the ITA, the amount will be retained as an overridden amount. You will be able to cancel the override, because technically, it will no longer be required.
Miscellaneous other additions (lines 605 and 295) and Miscellaneous other deductions (lines 705 and 395)
For the Miscellaneous other additions and Miscellaneous other deductions sections of Schedule 1, the Canada Revenue Agency requires that an amount be entered on each line where there is a description. Therefore, if lines 605 and 705 are used, amounts must also be entered on the corresponding lines 295 and 395.
When rolling forward, the program retains the descriptions entered on lines 605 and lines 705 of Schedule 1. As a result, if no amount is to be added or deducted on lines 295 and 395, you must delete the unused descriptions.
The program displays diagnostics to advise of this situation.
Prior Year Column
Schedule 1 includes the Prior year column used to keep track of changes in the different elements totaling the filing corporation’s net income. This column will be completed with data from the Current year column when rolling forward a file.
See also