Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Whether certain amounts that were paid by an individual would be considered union dues that would be deductible under paragraph 8(1)(i) of the Act.
Position: Depends - see response.
Reasons: See response.
July 30, 2019
XXXXXXXXXX
Dear XXXXXXXXXX:
The Honourable Diane Lebouthillier, Minister of National Revenue, received your correspondence about the tax implications of the payroll deductions made by your employer on June 21, 2019. She has asked me to reply on her behalf.
On June 28, 2019, you spoke with Ms. Ananthy Mahendran, a Canada Revenue Agency senior rulings officer. You told her that you have concerns about whether amounts paid by members of a labour union are deductible from employment income under the Income Tax Act.
Generally, annual dues required to maintain membership in a trade union are deductible from income by a member under the Act to the extent that the member has not been reimbursed and is not entitled to be reimbursed in respect of the amount paid. Please note that income tax legislation does not have any impact on the amount of union dues deducted by an employer.
However, the Act provides that annual dues of a member of a trade union or association are not deductible, to the extent that they are, in effect, levied:
- for or under a superannuation fund or plan;
- for or under a fund or plan for annuities, insurance (with some exceptions), or similar benefits; or
- for any other purpose not directly related to the ordinary operating expenses of the association or trade union to which they were paid.
It is a question of fact whether any particular union dues are deductible from employment income under the Act. Because your employer is in the best position to determine whether amounts that are paid by employees are deductible from employment income, I encourage you to talk to your employer regarding these amounts.
You can find more information about dues that an employee may deduct from employment income in Interpretation Bulletin, IT-103R, Dues paid to a union or to a parity or advisory committee, at canada.ca/en/revenue-agency/services/forms-publications/publications/it103r.
I appreciate the opportunity to respond to your concerns and trust the information I have provided is helpful.
Sincerely,
Geoff Trueman
Assistant Commissioner
Legislative Policy and Regulatory Affairs Branch
Prepared by:
Ananthy Mahendran and Tobias Witteveen
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