T4002 is the guide for Business and Professional Income for self-employed or professional or commission sales persons who file a T2125 to report their income on a T1.
You'll find there is a new section on PHSP (with out a line number, but there is a line on the T2125 form) and in the T4002, you'll find it by scrolling beyond Line 9270 –
Click on the link above, find Line 9270 and scroll down from there to see the whole instruction set as to what you can claim, as it goes on for quite a ways and looks like it could be a bit complicated.
You can deduct premiums paid or payable to a private health services plan (PHSP) if you meet the following conditions:
· your net income from self-employment (excluding losses and PHSP deductions) for the current or previous year is more than 50% of your total income;* or
· your income from sources other than self-employment** is $10,000 or less for the current or previous year;
· you are actively engaged in your business on a regular and continuous basis, individually or as a partner; and
· the premiums are paid or payable to insure yourself, your spouse or common-law partner, or any member of your household.
*For the purpose of this claim, calculate your total income as follows:
- the amount from line 150 of your 2010 or 2011 income tax return, whichever applies, before you deduct any amounts for PHSPs; minus
- the amounts you entered on lines 207, 212, 217, 221, 229, 231, and 232 on your 2010 or 2011 income tax return, whichever applies.
**For the purpose of this claim, calculate your income from sources other than self-employmentas follows:
- the amount from line 150 of your 2010 or 2011 income tax return, whichever applies, before you deduct any amounts for PHSPs; minus
- the amounts you entered on lines 135, 137, 139, 141, 143 (excluding business losses which reduced the net amount reported on those lines), 207, 212, 217, 221, 229, 231, and 232 on your 2010 or 2011 income tax return, whichever applies.
You cannot claim a deduction for PHSP premiums if another person deducted the amount, or if you or anyone else claimed the premiums as a medical expense. For your premiums to be deductible, your PHSP coverage has to be paid or payable under a contract with one of the following:
To read the whole set of instructions on how to calculate what you can claim, Open The T4002 Guide – find Line 9270 and scroll down until you find this section and read the whole thing! If you have or are thinking about enrolling in a Private Health Services Plan, this would be required reading along with IT339 and IT85...
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