Types of Income Tax Returns to File
In an income tax return known as the “principal return,” you must report all income the deceased received from January 1 of the year of death to the date of death, regardless of whether they received it during their lifetime. Some income can be reported in separate returns.
The income can include:
- income received before death;
- all periodic payments (such as interest, rents, royalties, annuities, salaries and wages) that, as a rule, accumulated daily in equal amounts during the period in which they were payable;
- income resulting from deemed dispositions at the time of death.
For more information on filing the deceased's principal income tax return, see the Guide to Filing the Income Tax Return of a Deceased Person (IN-117-V).
In some cases, more than one income tax return can be filed for the year of death to provide certain tax advantages. In addition to the principal income tax return, you can choose to file up to three other separate income tax returns.
A separate return can be filed to report
- the value of rights and property of the person at the time of death;
- income from a testamentary trust that is a graduated rate estate;
- income from a partnership or sole proprietorship.
As the liquidator of the succession, you must file any required returns for past years that the deceased should have but did not file.
If the deceased did not claim the solidarity tax credit for taxation years before their death, the succession may be entitled to the credit.
For information on the deadline and how to claim the credit for past years, click Claiming the Solidarity Tax Credit.
Some types of income generated after death must not be reported in the deceased's principal income tax return but in the Trust Income Tax Return (TP-646-V). For more information, see the Guide to Filing the Income Tax Return of a Deceased Person (IN-117-V).
As the liquidator of a succession, you are not required to file a trust income tax return if:
- the deceased's property is distributed shortly after their death or the succession earned no income before the distribution (in both cases, you must still give each beneficiary a statement showing their share of the succession's property);
- the succession's sole income is a death benefit under the Québec Pension Plan or the Canada Pension Plan and the benefit is included in the income of one or more succession beneficiaries.
For information on completing the trust income tax return, see the Guide to Filing the Trust Income Tax Return (TP-646.G-V).
For more information on the types of income tax returns to file, see the Guide to Filing the Income Tax Return of a Deceased Person (IN-117-V).