If you purchased stock options from your employer between February 27, 2000 up to and including 4:00 p.m. EST on March 4, 2010, and you chose to defer the benefits of these security options, you’ll have to complete a T1212.
Form T1212 is used to help keep track of your deferred security option benefits, and must be completed every year when preparing your tax return if you have an outstanding amount of deferred security option benefits even if you haven't deferred any options or disposed of any securities that were previously deferred.
What does it mean to defer security option benefits?
When someone buys shares through an employee security option, the taxable benefit isn’t included in their income the year the purchase was made. Instead, the taxable benefit is added as income in the year these shares are sold. This is known as deferring the security option benefit.
You’ll also need to include the taxable benefit of your security options as income in the year in which you become a non-resident of Canada or in the event you pass away.
Where do I claim this?
Follow these steps in H&R Block’s tax software to file your 2016 taxes:
- On the PREPARE tab, click the LET'S TALK ABOUT 2016 icon.
- Select the checkbox labelled I was employed, then click the EMPLOYMENT icon. You will find yourself here:
- Under the EXPENSES heading, select the checkbox labelled Statement of deferred security options benefits (T1212), then click Continue.
- When you arrive at the page for your T1212, enter your information into the tax software.