You must calculate the contributions and premiums below in both returns based on the income subject to the contributions and premiums for each period:

• the Québec parental insurance plan (QPIP) premium on income from self-employment;
• the contribution to the health services fund;
• the Québec Pension Plan (QPP) contribution on income from self-employment.

QPIP and health services fund

For the period from January 1 to the day preceding the date of the bankruptcy, the QPIP premium and the health services fund contribution are equal to your income subject to the QPIP premium or health services fund contribution for the period, multiplied by the contribution rate in effect.

For the period from the date of the bankruptcy to December 31, the QPIP premium and health services fund contribution are equal to the lesser of the following:

• the QPIP premium or health services fund contribution payable for the year minus the QPIP premium or health services fund contribution paid for the period preceding the bankruptcy;
• the QPIP premium or health services fund contribution for the year multiplied by the income subject to the QPIP premium or health services fund contribution for the period beginning on the date of the bankruptcy, divided by the income subject to the QPIP premium or health services fund contribution for the year.

QPP

For the period from January 1 to the day preceding the date of the bankruptcy, the QPP contribution is equal to your income subject to the QPP contribution for the period minus the $3,500 exemption, multiplied by the contribution rate in effect.

For the period from the date of the bankruptcy to December 31, the QPP contribution is equal to the lesser of the following:

• the QPP contribution payable for the year minus the QPP contribution paid for the period preceding the bankruptcy;
• the QPP contribution for the year multiplied by the income subject to the QPP contribution for the period beginning on the date of the bankruptcy, divided by the income subject to the QPP contribution for the year.

However, to ensure that all self-employment income for the year is recorded in the Record of Contributors, you can choose to make QPP contributions on that income only in the return for the period after the bankruptcy while taking into account your income subject to the contribution for the entire calendar year.

To make these QPP contributions:

• Check the “Election concerning the calculation of QPP contributions on income from self-employment” box on line 21 of your return for the period before the bankruptcy.
• Enter the contribution payable for the entire calendar year in your return for the period after the bankruptcy.

Even if you make this choice, you must enter the contributions for each of the periods before and after the bankruptcy on line 98 of the corresponding income tax returns.

To calculate the premium payable under the Québec prescription drug insurance plan, complete Schedule K of the return for the period after the bankruptcy as though you had not declared bankruptcy. We will calculate the premium for that period for you.

For more information, contact us.