When an artist earns more than $25,000 in a fiscal year, this annuity allows them to spread the portion of their income that exceeds $25,000, and the applicable taxes, over a maximum period of seven years.
Enrolment conditions
- Be a "recognized artist" according to the Quebec Taxation Act.
- Earn more than $25,000 during a given fiscal year.
"[...] the expression "recognized artist" means an individual who is a professional artist, within the meaning of the Act respecting the professional status of artists in the visual arts, arts and crafts and literature, and their contracts with promoters, or an artist, within the meaning of the Act respecting the professional status and conditions of engagement of performing, recording and film artists."
(Source: Section 346.0.1 of the Québec Taxation Act)
Annuity features*
- The income-averaging annuity must be purchased (or "acquired") by means of a single payment.
- The equal payments must be sufficient to ensure full payment of the annuity over no more than seven years from the date on which the first payment is made.
- The annuitant is entitled to request, at any time, the full or partial commutation of the annuity.
- The annuity payments may only be made to the annuitant or, after his/her death, to his/her estate or designated beneficiary, as the case may be.
- The contract and any annuity payable may not be given or transferred as security in any manner whatsoever.
- The contract must be consistent with the standard contract previously approved by the Minister of Revenue.
* This annuity is available in Quebec only.
Taxation
- Quebec
- In calculating his/her income, the annuitant may deduct the amount of the annuity he/she purchased in the year or within 60 days after the end of the year.
- A 25.75% tax withholding will apply to each payment.
- Federal
- No deductions granted when the annuity is purchased.
- The annuity is considered to be a non-prescribed annuity, meaning that only the "interest" portion of the payment is reported on the T5 slip.
Annuity payment
- The annuity can be paid by direct deposit or by cheque ($2 fee).
- The annuity can be paid monthly, quarterly, semi-annually or annually.
- The first payment must be made no later than ten months after the annuity is acquired.
- Annuities with payments of less than $300/year or $25/month are rejected.
End of annuity payments
- Payments will cease at the end of the specified period (maximum of seven years).
Changes
Source of eligible funds
- From all non-registered funds.
Minimum premium
Surrender
- The annuity may be surrendered subject to a market value adjustment.
Sales material/tools
