Case Study

Its March 1^st of 2021 and Mark and Carice, Canadian Citizens of Ontario, have come to you asking for your assistant to clarify and explain their 2020 income tax returns. They are a married couple and have three children; Maxim, Yola, and John aged 15, 12 and 8 respectively. Mark (51 years old) works full time for a Canadian scientific underwater research and development corporation (his employer) located in Kingston, Ontario. Mark has worked for his corporation out of Kingston Office for 9 years. Mark earned net income for tax purpose of $85,000 in 2020. His employer withholds maximum CPP contributions and EI premiums. Carice (45 years old), worked a part time job for a convenience store in Kingston from January 2020 to February 2020. She earned a net income for tax purposes of $3,525 in 2020. All children are in good health and none of them have income of their own. Mark and Carice came up to you to discuss the following tax matters:

1. Mark had question about his 2020 income tax return. Assume that Carice and I are required to file 2020 income tax returns, how much the maximum amount of 2020 tax credits that can be applied against my federal tax payable. Could you please show the calculation?

2. Carice told you that she had a discussion with her friends last month and they struggled with many tax issues and she wants you to confirm or correct their thought with your justification. These are the statements they have concluded: (a) Canadian living outside Canada have to file a Canadian tax return. (b) CRA doesnt levy taxes on non-residents who invest in Canada and (c) If you work temporary in Canada, then you automatically became a tax resident in Canada.

Based on the case study, can you please answer the 2 questions above? Its Canadian taxation course.