Dealing with the death of a loved one is difficult. So, the last thing you’ll want is for a client to have to figure out how to handle someone’s taxes after they pass away.
When discussing a client’s estate plans, consider sharing the following steps with them and their families to alleviate any future stress.
When someone dies, here’s what CRA requires:
- Tell CRA about the deceased’s date of death as soon as possible. Call 1-800-959-8281 or fill out the form on the back of RC4111, What to Do Following a Death (send the form to a tax services office or tax centre).
- If the deceased was receiving any of the benefit and credit payments listed below, contact the CRA as soon as possible to stop the payments and, if applicable, transfer them to a survivor:
- Tell Service Canada the deceased’s date of death by contacting a Service Canada office or call 1-800-622-6232.
Other important facts
- People must file a final return after a family member’s death. On the deceased’s final return, the legal representative of the deceased must report all of the deceased’s income from January 1 of the year of his or her death, up to and including the date of death, and claim all credits and deductions that the person is entitled to.
- Income earned after the date of death may have to be reported on a T3 Trust Income Tax and Information Return. For more information on how to complete the deceased’s final return, see tax guide T4011, Preparing Returns for Deceased Persons.
- The legal representative of the deceased is required to file any tax returns for the years that the person did not file before he or she died.
- If an individual who pays tax by instalments dies during the year, instalment payments due on or after the date of death do not have to be paid.
- The due date for the final return depends on the deceased’s date of death. For more information, refer to RC4111, What to Do Following a Death or tax guide T4011, Preparing Returns for Deceased Persons.
Published at Fri, 27 Jan 2017 16:46:55 +0000