TP-766.2-V: Averaging of a retroactive payment, support-payment arrears or a repayment of support

What’s in this article?

 

What is this?

Form TP-766.2-V is used to report and average amounts you received that were support-payment arrears, repayment of support, or retroactive payments for:

  • Employment income if the payments were received due to a judgment, arbitration award or a settlement;
  • Benefits paid to you such as parental insurance benefits, universal child care benefit (UCCB), employment insurance, old age security, QPP or CPP, social or financial assistance, or payments from a pension plan, an RRSP, RRIF, DPSP, PRPP/VRSP, or annuity, or social or financial assistance;
  • Interest on a retroactive payment;
  • Labour adjustment and income assistance benefits;
  • An amount other than employment income (line 154) that, in the opinion of the Minister of Revenue, would increase your tax burden unduly if it was included in your income for the year in which you received it.

If you received a retroactive payment, support-payment arrears, or a repayment of support in the year and a portion of that (at least $300) applies to previous years, you can request Revenu Québec to determine if it is to your advantage to average that portion of the payment. This means that Revenu Québec calculates the income tax payable on that portion of the payment as if you received it in the previous years and will deduct it from your tax payable for the current year. To request the averaging of a retroactive payment, complete form TP-766.2-V and check box 404 on your return.

If you request the averaging of a retroactive payment, support-payment arrears, or a repayment of support, you can also request that non-capital losses or non-refundable tax credits be carried over to the year to which the previous year portion applies. To do so, complete Part 4 of form TP-766.2-V

You can also use this form if you paid support-payment arrears or if you repaid an amount of support (other than non-taxable support) that you received in a previous year.

 

 

Am I eligible?

If you received a retroactive payment, support-payment arrears, or a repayment of support and want to request the averaging of payments received that apply to previous years, you must complete form TP-766.2-V.

Complete part 4 of the form if you want to also request that non-capital losses or non-refundable tax credits be carried over to the year to which the previous year portion applies.

Notes:

  • Revenu Québec cannot average payments that are payments of a compensation adjustment or income replacement indemnities or compensation for the loss of financial support. If you are transferring a portion of the retroactive payment to your spouse, neither you nor your spouse can have the transferred portion averaged.
  • When you complete form TP-776.2-V, H&R Block’s Tax Software automatically checks box 404 for you on your return.

 

Where do I claim this?

Follow these steps in H&R Block’s tax software to file your 2015 taxes:

Important: Before you begin, ensure that you told us that you lived in QUÉBEC on December 31st of the 2015 tax year, in H&R Block’s tax software. To do this:

  1. Click the HOME tab.
  2. Click the ABOUT YOU icon, and click the Your residence link. You will find yourself here:

Once you have confirmed your residence location, you can complete form TP-766.2-V by following these steps:

  1. Click the PREPARE tab.
  2. Click the OTHER icon. You will find yourself here:
  3. Under the SPECIAL SITUATIONS heading, click the checkbox labelled Averaging of a retroactive payment, support-payment arrears or a repayment of support (TP-766.2-V).
  4. Scroll to the bottom of the page and click Continue.

When you arrive at the page for form TP-766.2-V, enter your information into the tax software.

 

Where can I learn more?