Bill C-401: An Act to amend the Income Tax Act (northern residents deduction)

R.S., c. 1 (5th Supp.) Income Tax Act 1 (1) Subsections 110.7(1) and (2) of the Income Tax Act are replaced by the following: Residing in northern zone 110.7 (1) When , throughout a period (in this section referred to as the “qualifying period”) of not less than six consecutive months beginning or ending in a taxation year, a taxpayer who is an individual has resided in one or more particular areas each of which is a northern zone referred to in Schedule 1 for the year and files for the year a claim in the prescribed form, there may be deducted in computing the taxpayer’s taxable income for the year (a) the total of all amounts of trip costs to the taxpayer in respect of trips that begin during the particular period in the taxation year; and (b) the lesser of (i) 20% of the taxpayer’s income for the year, and (ii) the total of all amounts each of which is the total of (A) $ 13 .00 multiplied by the number of days in the year included in the qualifying period in which the taxpayer resided in a particular area, and (B) $ 13 .00 multiplied by the number of days in the year included in that portion of the qualifying period throughout which the taxpayer maintained and resided in a self-contained domestic establishment in a particular area (except any day included in computing a deduction claimed under this paragraph by another person who resided on that day in the establishment). (2) The portion of subsection 110.7(3.1) of the Act before paragraph (a) is replaced by the following: Additional restrictions (3.1) For the purpose of paragraph (1)(a), an amount may only be included in computing the total of all amounts of trip costs for a taxation year if (3) Subsection 110.7(3.2) of the Act is replaced by the following: Additional restriction (3.2) If all amounts determined under paragraph 7304(2)(a) of the Income Tax Regulations are nil in respect of trips (beginning in the taxation year) made by an individual, the total of all amounts of trip costs referred to in paragraph (1)(a) in the taxation year for all taxpayers in respect of the individual must not exceed the standard amount for the individual for the taxation year. (4) Paragraph 110.7(4)(b) of the Act is replaced by the following: (b) can reasonably be considered to be attributable to that portion of the qualifying period that is in the year and during which the taxpayer maintained a self- contained domestic establishment as the taxpayer’s principal place of residence in an area other than a northern zone referred to in Schedule 1 for the year. (5) Section 110.7 of the Act is amended by adding the following after subsection (6): Order in Council (7) The Governor in Council may, by order, amend Schedule 1 by adding, replacing or deleting the name or the coordinates of an area. 2 Subsection 117.1(2) of the Act is amended by adding the following after paragraph (c): (c.1) each of the amounts expressed in dollars in subparagraph 110.7(1)(b)(ii); 3 Subparagraph (g)(i) of the definition financial institution in subsection 181(1) of the Act is replaced by the following: (i) listed in Schedule 2 , or 4 The schedule to the Act is numbered as Schedule 2. 5 The Act is amended by adding, before Schedule 2, the Schedule 1 set out in the schedule to this Act. 6 This Act applies to the 2025 and subsequent taxation years.