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Federal tax and credits (Schedule 1)On this page...If you are filing a paper return, attach a completed Schedule 1. Minimum taxMinimum tax limits the tax advantage you can receive in a year from certain incentives. You have to pay minimum tax if it is more than the federal tax you calculate in the usual manner. When calculating your taxable income for this tax, which does not apply to a person who died in 2005, you are allowed a basic exempt amount of $40,000. Generally, to find out if you have to pay this tax, add the amounts in section B below and 60% of the amount on line 127 of your return. If the total is $40,000 or less, you probably do not have to pay minimum tax. If the total is more than $40,000, you may have to pay it. To calculate if you have to pay it, use Form T691, Alternative Minimum Tax. You also have to calculate your additional provincial or territorial tax for minimum tax purposes by completing Form 428. Below are the most common reasons why you may have to pay minimum tax: A. You reported a taxable capital gain on line 127. B. You claimed any of the following:
C. You claimed any of the following tax credits on Schedule 1:
Example Tax Tip
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