S. 8(1)(b) permits an employee to deduct, in computing his or her income from an office or employment, amounts paid as or on account of legal expenses incurred by the taxpayer to collect or establish a right to salary or wages owed to the taxpayer by the employer or former employer of the taxpayer.

A proposed amendment would amend s. 8(1)(b) effective for amounts paid after 2000 to refer instead to such amounts paid in order to collect or establish a right to collect an amount that, if received, would be included in the individual's employment income. The technical notes of the Department of Finance stated:

Concern has been expressed that where an amount is not owed to the employee directly by the employer, any legal expenses incurred by the taxpayer would not be deductible under paragraph 8(1)(b), even though the amount, when received, would be taxable as employment income. This would be the case, for example, with respect to legal fees incurred by a taxpayer to collect insurance benefits under a sickness or accident insurance policy provided through an employer.

(The Farrell decision is an example of a situation where the pre-amendment wording potentially was problematic.)

Given that the amount, to be deductible, must have been incurred in order to collect or establish an entitlement to employment remuneration, amounts will not be deductible if they were incurred to challenge the award of employment to someone else (Turner-Lienaux), or in defending an action in a dispute that did not arise out of the terms of the employment (even if the individual's entitlement may be an ancillary element to the action) (Fenwick). Accordingly, legal expenses incurred in defending against serious charges which if substantiated might result in loss of employment generally will not be deductible (Wilson, Kaushik, Blagdon , see also Simolai). Legal fees incurred in order to challenge a termination of employment or to seek a larger damages payment for termination of employment generally be considered to have been incurred in order to establish an entitlement to a retiring allowance rather than to employee remuneration and, therefore, will be non-deductible under s. 8(1)(b)(Bonsma, Blagdon, MacDonald) (although they may be deductible under s. 60(o.1)).

It has been stated that s. s. 8(1)(b) covers not only enforcing an existing right to salary owing but also bringing into existence a right to salary which thereupon becomes owing to the taxpayer (Blackburn), so that legal expenses incurred by an employee who has been dismissed (or suspended) in order to secure a reinstatement of his employment generally will be deductible (Fernando). Similarly, litigation expenses incurred with a view to establishing that the employee is entitled to a higher salary generally will be deductible, regardless of the action's outcome (Loo).

Cases

Barkley v. Canada, 2021 FCA 5

s. 8(1)(b) does not provide deductions of legal fees incurred to resist repaying remuneration

The three directors (two siblings and a spouse) of a corporation incurred legal fees in defending an action brought by two other siblings challenging the validity of a purported gift of the control bloc of shares of the corporation to one of the directors by the father, and seeking the repayment by them of allegedly-overpaid remuneration.

In finding that such legal expenses were not deductible under s. 8(1)(b), Webb JA stated (at para 35):

The language is clear that the deduction is only available for legal expenses incurred to collect or establish the right to amounts that, if received, would be included in income. It does not apply to legal expenses incurred to allow a taxpayer to retain amounts that have already been paid.

Fenwick, which suggested a potentially broader scope for s. 8(1)(b) , was now “moot” (para. 31) as s. 8(1)(b) had since been relevantly amended.

Fenwick v. Canada, 2009 DTC 5525, 2008 FCA 370

expenses were incurred in a dispute broader than recovery or repayment of remuneration

Legal expenses incurred by the taxpayer in defending against a derivative action that was based on his allegedly having caused the corporation to have paid him excessive remuneration, were not deductible. Sharlow, J.A. stated (at para. 8):

Paragraph 8(1)(b) is not intended to permit legal expenses to be deducted when they are incurred in litigation involving a claim for damages involved in disputes other than those arising from the terms of employment, merely because the Defendant's entitlement to a particular remuneration is an element of the claim.

She also stated that "it is an open question whether paragraph 8(1)(b) also applies to legal expenses incurred by an individual who is being sued by an employer or former employer for reimbursement of an over-payment of salary or wages." (Para. 8.)

Loo v. Canada, 2004 DTC 6540, 2004 FCA 249

deductible expenses where suing re pay allegedly below the legal requirement

The taxpayer and other lawyers employed in British Columbia by the Department of Justice sued the Department in the British Columbia Supreme Court alleging that they were entitled to be paid at the same rate as lawyers employed by the Department in Toronto. As "Mr. Loo is trying to establish by litigation that, for the services he has rendered to his employer, the law requires that he be paid more than he has been paid", it followed that the taxpayer was trying to establish a right to salary "owed" to him by his employer.

Words and Phrases

owe

Turner-Lienaux v. The Queen, 97 DTC 5294, [1999] 1 CTC 89 (FCA)

Legal expenses that were laid out by the taxpayer to challenge the outcome of a public service competition in which another position with the same employer was awarded to a third party, were not deductible.

Fernando v. The Queen, 93 DTC 5412, [1993] 2 CTC 173 (FCTD)

Legal expenses (but not interest thereon) paid by a dismissed member of the Alberta Union of Public Employees in connection with a grievance before an arbitration board resulting in his reinstatement were deductible. Rothstein, J. was satisfied that the basic amount ordered and paid in the case was wages and not a retiring allowance.

Wilson v. The Queen, 90 DTC 6382 (FCTD), aff'd 91 DTC 5407 (FCA)

Legal expenditures made by a salaried school teacher in defending charges of rape and unlawful confinement were not deductible.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 54 - Capital Property		128

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Patents or other intangible property		51

Administrative Policy

11 April 2018 External T.I. 2017-0699751E5 - Deduction of legal expense

CRA now accepts that legal expenses incurred to recover salary are deductible even if no right to the salary is established

Q.2

Can a taxpayer request an amendment to a previous taxation year’s T1 return to claim a deduction for legal expenses paid in that year, if the established employment income is not paid until a subsequent taxation year? CRA responded:

If the conditions to claim a deduction under paragraph 8(1)(b) of the Act are met, a taxpayer may request an adjustment to a T1 Return for the legal expenses that were paid in the previous tax year (generally within 3 years).

Q.3

Is a deduction for legal expenses under s. 8(1)(b) only allowed when the claim is well founded in law, or is likely to succeed? CRA responded:

IT-99R5 … states that if a taxpayer is unsuccessful in court and fails to establish that an amount is owed, then no deduction is allowed. However, those comments are no longer accurate based on … Loo …[which] ruled that a taxpayer’s legal action need not be successful in order to deduct an amount under paragraph 8(1)(b)… .

However, it is still necessary to examine the nature of the action against the employer to establish whether the order sought by the taxpayer is for an amount owed to the taxpayer that would be included in income under subdivision a of Division B. Cases involving the deductibility of legal fees paid to establish a right to a promotion or a raise or where the claimant is seeking financial compensation in connection with allegations of unlawful or wrongful acts by an employer remain distinguishable.

Q.4

For the purposes of paragraph 8(1)(b) of the Act, how is it determined if the taxpayer has collected or established a right to collect an amount owed? CRA responded:

For the purposes of paragraph 8(1)(b) … the taxpayer needs to look at … if the purpose was to collect or establish a right to collect an amount owed. This approach is consistent with … Loo

Q.5

Are legal expenses paid by an individual (to reinstate the individual’s former employment position), deductible under paragraph 8(1)(b) of the Act when employment is reinstated without retroactive pay? CRA responded:

The legal expense incurred for the purposes of paragraph 8(1)(b) of the Act must be incurred by the taxpayer to collect, or to establish a right to, an amount owed. In Loo, the FCA referred to the New Oxford Dictionary of English (1998, Clarendon Press, Oxford) definition of the word “owe” as “an obligation to pay or repay (something, especially money) in return for something received.”

While the legal expenses paid may have facilitated the reinstatement of the individual’s employment, the legal expenses were not incurred to collect (or establish a right to collect) an amount that was owed and required to be included in employment income … .

12 February 2013 Internal T.I. 2013-0475631I7 - Treatment of Settlement Amounts

It is contemplated that a lump sum would be paid to the individual plaintiffs in a class action suit in settlement of their allegation that monthly long-term disability benefits received by them should not have been reduced by monthly benefits under the Pension Act. Applying the surrogatum principle in Tsiaprailis, CRA found that this amount would be taxable and included in the recipient's employment income in the year received under s. 6(1)(f), and found that the legal fees paid in the year by a class action member could be deducted from the class member's employment income in that year under s. 8(1)(b).

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 110.2 - Subsection 110.2(2)		112
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a)		113
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(f)		88

19 November 2012 Internal T.I. 2012-0433201I7 - Legal fees incurred re: job reinstatement

Regarding a taxpayer's lawsuit for reinstatement of employment and associated retroactive pay, and to receive performance pay and other damages, CRA stated that the taxpayer's legal fees should be apportioned reasonably among the various objectives of the taxpayer's suit, and the deductibility of each portion should be considered based on its corresponding objective and on its success:

The portion relating to unpaid performance pay, which allegedly accrued during the taxpayer's employment, is deductible under s. 8(1)(b) regardless of the suit's outcome, in accordance with Loo.
The portions relating to reinstatement of employment and associated retroactive pay, banked leave, and lost promotional opportunities are not currently deductible (CRA stated that Turner-Lienaux establishes in general that a person is not "owed" salary or wages if he did not do the work or occupy the position that required the salary or wages to be paid). However, such portions may become deductible depending on the outcome:
- If the taxpayer's suit is successful and the taxpayer is reinstated, then these portions relate to salary or wages owing and are deductible under s. 8(1)(b) (Fernando).
- If the taxpayer's suit is successful in the main but the taxpayer is not reinstated, then these portions will fall under the s. 248(1) definition of "retiring allowance" and will be deductible under s. 60(o.1) to the extent of the amount received and included in income (e.g. not counting RPP and RRSP contributions).
- If the taxpayer's suit is unsuccessful, then these portions cannot be said to be owing, and are not deductible.
The portion relating to pain and suffering awards, if any, are not deductible because damages for pain and suffering are non-taxable.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 60 - Paragraph 60(o.1)	apportionment among objectives	314

13 September 2012 Internal T.I. 2012-0442671I7 F - Dédommagement pour la perte de bénéfices

legal fees paid to recover damages for employer cancellation of insurance coverage, and medical plan, qualified and did not qualify, respectively

The former employees and retirees of a bankrupt corporation (the "Employer") received a lump for the cancellation of their rights in a group insurance plan and respecting legal costs incurred to recover the lump sum. The lump sum received for the Plan cancellation included compensation for the loss of medical and dental coverage and hospitalization coverage for themselves and their dependents (respecting the "Medical Plan"), as well as the loss of life insurance coverage (the "Coverage"). Damages also were claimed for the amounts owing under the Employment Standards Act (the "Dismissal Amount").

After finding that the portions of the lump sum allocable to both the termination of the Medical Plan and to the lost Coverage were taxable employment benefits (including in the case of the Coverage by virtue of s. 6(3), the Directorate found that a portion of the legal expenses incurred by the taxpayers was non-deductible by virtue of s. 8(2) and did not qualify for deduction under s. 8(1)(b), stating:

The amount of legal fees that the Objectors have paid that is attributable to the recovery of the amount they received in settlement of the loss of their rights under the Medical Plan … was paid to recover an amount that was not wages or salary. Consequently, paragraph 8(1)(b) does not apply to allow the deduction … of legal costs that have been paid to recover such an amount.

[Respecting the recovery regarding the Coverage] … we suggest that a deduction be allowed for the amount of the legal fees that were paid to recover the damages for the Coverage.

… You stated that the Dismissal Amount is a taxable amount as a wage or salary or retiring allowance. Thus, we are of the view that the amount paid as a legal expense attributable thereto is deductible in computing the Objectors' income under paragraph 8(1)(b) or 60(o.1) …depending on the circumstances.

… [T]here is no rule in the Act for the allocation of legal fees. … [I]t is reasonable to consider that legal fees should be allocated among the various components.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) - Subparagraph 6(1)(a)(i)	damages received after 2011 by employees of an insolvent company for cancellation of their medical plan have become taxable	318
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Death Benefit	damages received for loss of life insurance coverage were not rendered a death benefit under the surrogatum principle	319
Tax Topics - Income Tax Act - Section 6 - Subsection 6(3)	damages received by former employees of insolvent company for cancellation of their life insurance coverage were received in lieu of remuneration for their employment services	285

23 November 2009 Internal T.I. 2009-0324731I7 F - Demande d'exemption administrative

legal fees to recover lump sum worker’s compensation payment were non-deductible

An individual incurred legal fees to recover in excess of $80,000 in Quebec workers’ compensation payments. The Directorate stated:

Legal costs incurred to establish a taxpayer's entitlement to CSST compensation cannot be deducted in computing income. We have rendered a similar decision in … 2008-0289751E5.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(v)	lump sum worker’s compensation payment could affect Pt. I.2 (OAS clawback) tax	159

12 September 2006 Internal T.I. 2005-0147801I7 F - Déduction pour frais judiciaires d'un employé

legal fees incurred in defending against allegations of harassment were non-deductible

In finding that legal fees, incurred by a public services employee after a fellow employee had filed a harassment complaint against her, were non-deductible, CRA stated:

They were not costs incurred to recover an amount of salary or wages owed to her by her employer or to establish an entitlement to such amounts. Furthermore, when those costs were incurred, no amount was owed to the client by [the employer].

12 July 2002 External T.I. 2002-0127585 F - Legal Expenses, Compensation for Defamation

legal fees incurred for employee to receive damages only for defamation were not deductible

Following a disagreement with his employer, Mr. X was suspended from his employment without salary, and then brought an action regarding malicious remarks made in public about him by his employer, returned to work without receiving compensation for the employment income lost during the period of suspension and, later, received compensation for defamation. Regarding the deductibility of the related legal fees, CCRA stated:

[A] deduction under paragraph 8(1)(b) is allowed only in respect of an amount "owed" by an employer or a former employer. If the taxpayer is not successful in court or otherwise fails to establish that some amount is owed, no deduction for expenses is allowed. …

[T]he expenses incurred by the taxpayer in suing his employer may not be deductible because the taxpayer did not receive compensation for the employment income lost during the suspension period. This could be an indication that the taxpayer's suspension by his employer was justified and that the taxpayer was therefore not entitled to compensation under the applicable legislation.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 3 - Paragraph 3(a)	damages received by employee for defamation were tax free if their character not misrepresented	172
Tax Topics - Income Tax Act - Section 5 - Subsection 5(1)	damages received by employee for defamation were not employment income if not deliberately mislabeled	85

24 March 1995 External T.I. 9424305 - LEGAL FEES

Fees paid to a party other than a firm of barristers and solicitors could qualify as legal expenses if they can be regarded as being for services pertaining to the domain of law.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 60 - Paragraph 60(o.1)		35

IT-99R4 "Legal and Accounting Fees" under "Collection of Salary and Wages"

Paragraph 8(1)(c) - Clergy residence

Commentary

Inclusion in clergy member's income where provision of manse or housing allowances

It is common for members of the clergy to receive a significant portion of their remuneration from their employing church in the form of a housing allowance in respect of the costs of accommodation that is owned by them (or their spouses) or that is rented by them. Such allowances are included in their income under s. 6(1)(b). Similarly, being allowed to occupy the church manse free of charge will give rise to a benefit that is included under s. 6(1)(a) in their income from employment.

Computation of deduction

In the circumstances described below, s. 8(1)(c) provides a deduction in computing the income from employment of the clergy person in respect of the accommodation occupied by him or her.

Under s. 8(1)(c)(iii), where a residence or other living accommodation occupied by the taxpayer is supplied "in the course of, or because of" the employment (e.g., a manse that a church agrees at the time of hiring to make available for occupation by the minister and family), the amount of the deduction is equal to the value of the benefit derived from the supply of the accommodation (including amounts in respect of utilities), to the extent that the value is already included in income under s. 6. (As indicated in Williams, the quoted phrase "implies a need for a strong causal relation between" the occupation of the residence and the employment of the minister, so that this test will not be satisfied where the house in question is not provided by the employer and is simply a house in which the taxpayer chooses to reside.)

Under s. 8(1)(c)(iv), where the taxpayer's principal place of residence or other principal living accommodations which is ordinarily occupied by the taxpayer in the year is owned or rented by the clergy person, the deduction is equal to the least of three amounts:

the employee's remuneration for the year from the office or employment;
the greater of: (a)¹/3 of the employee's total remuneration from the employment for the year; and (b) $1,000 per month (to a maximum of ten months) in the year during which the employee meets the conditions set out in subparagraphs 8(1)(c)(i) and (ii); and
the rent paid or the fair rental value of the residence including utilities (this amount must be reduced by the total of all other amounts deducted in computing the employee 's income from a business or from an office or employment in connection with the same accommodation). This could arise, for example, where two spouses who are members of the clergy occupy the same accommodation.

Eligibility for deduction

To be eligible for the deduction from their employment income, an employee must satisfy two requirements.

First, the employee must be a member of the clergy or of a religious order, or be a regular minister of a religious denomination (s. 8(1)(c)(i)).

Second, the employee must be in charge of, or ministering to, a diocese, parish or congregation, or be engaged exclusively in full-time administrative service by appointment of a religious order or a religious denomination (s. 8(1)(c)(ii)). (As described in the Lefebvre decision, the "functions" requirement in what now is s. 8(1)(c)(ii) was added in 1956.)

In addition, to claim the deduction, the employee must include with his or her return a certificate of the employer (on form T1223) certifying that the conditions for the deduction have been satisfied: s. 8(10).

Member of religious order

It has been suggested that the following characteristics would be indicative of a religious order: its purpose should be primarily religious; its members must agree to adhere to a strict regime of dedication to its goals to the detriment of their own material well-being; the members' commitment should be full-time and of a long-term nature; the spiritual and moral discipline under which they live must be markedly stricter than that to which lay members are expected to adhere; admission to it must be in accordance with strict standards; and there should generally be a sense of communality (McGorman - see also Kirkbride). Organizations whose purposes are primarily educational are not religious orders (Zylstra Estate, Oligny) nor, apparently, is an organization whose principal purpose is assistance to needy persons or personal development through the conduct of sports or outdoor activities (Oligny cf. Alemu).

It has been found that an organization whose members earn comfortable incomes, devote a significant part of their time to raising funds for their own support and are free to earn income from other sources, is not a religious order (Koop). However, a trans-denominatinal Christian organization that operated group homes for developmentally challenged adults and children was found to be a religious order notwithstanding that is used a structured pay scale for employees rather than paying them only enough to satisfy their basic needs (Alemu).

Member of clergy

Bowman TCJ stated that although ordination was not required in order to qualify as a member of the clergy, what was required was "a formal act of recognition whereby that person is set apart from the other members of the church as a spiritual leader" together with "a formal, serious and long-term commitment to the Ministry" (Kraft). In Tidd, V.A. Miller stated that a spiritual leader "is one who... is aimed at changing people" and "who not only prays with those in need but offers them spiritual guidance." Reference also has been made for a requirement that there be some formal recognition (akin to ordination) (Kirkbride).

Regular minister

In Hardy v. The Queen, 98 UDTC 24, [1997] TCJ 1191, Rip J. noted (at para. 21) that in Saltmarsh v. Adair, [1942] SC(JC) 58, the justices:

...appear to infer that a "regular minister" is one who performs spiritual duties, the conduct of religious services, the administration of sacraments and the like;

ii is appointed by a body or person with the legitimate authority to appoint or ordain ministers on behalf of the denomination; and

iii is in a position or appointment of some permanence.

In the Lefebvre case, the Court approved the presence of a requirement that, in order to qualify as a regular minister, the individual's appointment must be of a permanent character. Accordingly, "the fact that a person hold a position or performs duties in a relatively permanent manner will not suffice if the person does not also have a legitimate appointment." As under canon law, Roman Catholic pastoral agents (unlike ordained ministers) were not considered to have a permanent status, they did not qualify as regular ministers.

A regular minister has been found to include an individual who regularly ministers to the spiritual need of a congregation (or parish or diocese) in a substantial way (see Austin, where a credentialed but not ordained minister of a Pentecostal church was found to be a regular minister notwithstanding that he devoted most of his time to musical matters), and who is qualified to so minister to the congregation's spiritual needs (see Kirkbride).

A half-time staff-associate can qualify as a "regular" minister (Kolot).

Ministering to congregation

As it is accepted, for example, that a chaplain at a correctional institute can qualify (see Shaw), the meaning of congregation appear to be broad. In the course of finding that a group of students were not a congregation to whom a professor of religious knowledge ministered, Bowman TCJ referred to a congregation as an "assemblage or gathering of persons to whom a minister provides spiritual counselling, advice, illumination and inspiration" (Fitch). In McNeil, Rowe TCJ referred to "a gathering for a shared religious purpose recognized by the Church," although the taxapyer in that case (a priest who also worked as a psychologist at a health clinic) was entitled to the deduction in respect of his part-time position as a chaplain to the RCMP (see also Kraft). The faculty and staff at the Ontario Bible College were not a congregation because they were encouraged to rely or in fact relied upon their own denominational church congregations for their primary spiritual life (Zylstra Estate).

Consistently with s. 33(2) of the Interpretation Act (references to the singular include the plural), ministering to multiple congregations can satisfy the test in s. 8(1)(c)((ii)(B) of ministering to a congregation (Kraft).

In McGorman, Bowman TCJ stated that "'to minister' means merely 'to serve', or 'to attend to the needs of'" and that the when Jesus traveled throughout the Holy Land dealing with people from all backgrounds and places it could not "reasonably be said that He was not ministering to a congregation." An individual can qualify as a member of the clergy who is ministering to a congregation even though he or she does not preach sermons (Tidd).

Full-time administrator appointed by religious order or denominaton

Appointment by an ecumenical or multi-denominational organization likely will not qualify as appointment by a religious denomination (Reimer). As "full-time" is used in contra-distinction to part-time, carrying out some pastoral duties will not necessarily disqualify an administrator as being full-time (McGorman). An individual who performs administrative services for an organization which does not qualify as a religious denomination nonetheless may qualify for the deduction if that organization was controlled by a religious denomination, so that it can be said that he or she was appointed by a religious denomination (Fitch), or where the controlling religious denomination in fact appointed him or her (Reimer).

Principal Place of Residence v. Principal Residence

The deduction under s. 8(1)(c)(iii) refers to "the residence or other living accommodation occupied by the taxpayer;" and the deduction under s. 8(1)(c)(iv) refers to "the taxpayer's principal place of residence (or other principal living accommodation), ordinarily occupied during the year by the taxpayer." CRA has stated that "principal place of residence" under s. 8(1)(c)(iv) differs from "principal residence" in that, while the taxpayer can designate his or her principal residence, the taxpayer's "principal place of residence" is always a question of fact. Whether the taxpayer "ordinarily occupies" a principal place of residence is analogous to whether the taxpayer is "ordinarily resident" in that place (4 June 2013 Memorandum 2012-0455961I7). (See s. 2(1) for the meaning of "ordinarily resident.")

Remuneration limitation

S. 8(1)(c) contemplates that an employed clergy person or administrator described in s. 8(1)(c)(i) and (ii) is accorded a deduction from his or her income from employment. It follows that an individual who is not employed, for example, a retired clergy person, will not be entitled to the deduction. Similarly, where a parson earns income that does not qualify as income from an office or employment, e.g., contributions received directly from members of the congregation, such income will not entitle him or her to a deduction under s. 8(1)(c) (Rumford).

Payments received by a chaplain from her employer's wage replacement plan during an extended sick leave were found to be "remuneration" so that she continued to be eligible for the deduction (Shaw).

Cases

Canada v. Lefebvre, 2010 DTC 5042 [at 6691], 2009 FCA 307

The taxpayers, who were Roman Catholic pastoral agents, did not qualify for the clergy residence deduction in 8(1)(c). In 1956, the provision (which originally had no function requirement) had been expanded so that the deduction would now be limited to persons who fulfilled the functions now described in s. 8(1)(c)(ii). As it was therefore status and not functions that are described in s. 8(1)(c)(i), an individual who performs duties in a relatively permanent fashion will not qualify as having the status of a regular minister if his or her appointment is not of a permanent nature. "In canon law, the distinction between ordained ministers and lay faithful (among whom pastoral agents are recruited) remains as fundamental today as it has always been;" and "only ordained ministers are conferred a status that can be said to be permanent." (Paras. 39-40.)

Canada (Minister of Citizenship and Immigration) v. Khan, 2005 DTC 5715, 2005 FC 398

The Tax Court Judge had not erred in finding that the taxpayer, who was engaged in full-time administrative service, had been appointed to his position by the Christian and Missionary Alliance of Canada (a religious denomination) and not by the Evangelical Fellowship of Canada or the World Evangelical Fellowship, which were not.

Rumford v. The Queen, 94 DTC 6121, [1994] 1 CTC 239 (FCA)

The taxpayer was not an employee of the Erindale Bible Chapel but instead held a position there as a "commended worker." His compensation consisted of a fixed stipend of $3,660 each quarter plus the total voluntary contributions made by members of the congregation through envelopes on which his name was written.

Because the definition of "office" was restricted to a position entitling an individual to a "fixed or ascertainable stipend or remuneration", the taxpayer's deduction under s. 8(1)(c) was restricted to the fixed portion of his remuneration.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Office		101

Zylstra Estate and Small v. The Queen, 94 DTC 6687, [1995] 1 CTC 2392 (FCTD), aff'd sub-nominee McRae v. The Queen, 97 DTC 5124 (FCA)

The taxpayers, who were, respectively, the President of the Institute for Christian Studies ("ICS"), the Director of Alumni of Ontario Bible College and Ontario Theological Seminary ("OBC"), the President of OBC and the Director of Educational Services of the ICS, were not entitled to the deduction. Neither OBC nor ICS was a religious order given that there was "no expression of faith or of religious purpose of either institution apart from the educational purpose of each, that would mark the institution, and its members as distinct from the churches or denominations that each served" (p. 6693), and given that their primary purpose was educational. In addition, in the case of the taxpayers who had positions at OBC and who alleged that they were members of the clergy who ministered to a congregation, OBC could not be considered to constitute a congregation "since on the evidence the institution was seen as representative of, and serving several denominations through its educational programs" and "moreover, faculty, staff and students, and clearly alumni, were encouraged or had relied upon their own denominational church congregations for their primary spiritual life" (pp. 6696-7).

Locations of other summaries		Wordcount
Tax Topics - Statutory Interpretation - Noscitur a Sociis	noscitur a sociis and ejusdem generis compared	257

Locations of other summaries		Wordcount
Tax Topics - Statutory Interpretation - Ordinary Meaning		102

Administrative Policy

16 December 2004 Internal T.I. 2004-0098631I7 F - Déduction - Résidence des membres du clergé

based on Noseworthy, RC lay pastoral workers (in one case, authorized to baptize on occasion) were not regular ministers

Regarding lay pastoral workers who had been appointed to a team to participate in the exercise of the pastoral charge of the pastoral unit in certain parishes and who, in the case of one pastoral worker, also the authority to baptize parish children while the regular minister was absent, the Directorate quoted extensively from Noseworthy, and in concluding that the workers were not regular ministers of a denomination and not entitled to the deduction under s. 8(1)(c), stated:

[I]n order to be a regular minister of a denomination, a person must be authorized or empowered to perform spiritual functions, celebrate religious services, administer sacraments and perform similar religious functions.

… [We cannot] conclude that they are regular ministers because they are not authorized to perform most or all of the functions of a minister, including administering most of the sacraments of the Roman Catholic Church.

Words and Phrases

regular minister

23 January 2020 External T.I. 2019-0796121E5 F - Déduction pour résidence des membres du clergé

s. 8(1)(c) does not entail any home office requirement

Is a regular minister, in addition to meeting the other conditions set out in IT-141R, required to maintain an office in the taxpayer's residence or use it in connection with the taxpayer’s duties as a member of the clergy in order to qualify for the clergy residence deduction? CRA responded:

[P]aragraph 8(1)(c) does not require that the taxpayer in question maintain an office in the taxpayer's residence or use it in connection with the taxpayer’s duties as a member of the clergy in order to qualify for the clergy residence deduction.

23 January 2014 External T.I. 2012-0467711E5 - Clergy Residence Deduction

flunked 4 of 6 religious order criteria

An organization did not appear to qualify as a religious order as there was no indication of financial self-sacrifice or more rigorous working conditions than for non-religious organizations, that all members had made long-term work commitments and had committed to live markedly stricter lifestyles, and of strict screening criteria.

5 November 2013 Internal T.I. 2013-0494611I7 - Religious order

CRA reiterated its position in IT-141R that the characteristics indicative of a religious order are that:

The purpose of the organization should be primarily religious.

The members must agree to adhere to and in fact adhere to a strict moral and spiritual regime of self-sacrifice and dedication to the goals of the organization to the detriment of their own material well-being.

The commitment of the members should be full-time and of a long-term nature. In some cases it may be for life, but this is not essential. It is important that it not be short term, temporary or part-time.

The spiritual and moral discipline and regime under which the members live must be markedly stricter than that to which the lay church members are expected to adhere.

Admission to the order must be in accordance with strict standards of spiritual and personal suitability.

There should generally be a sense of communality.

CRA provided more detailed commentary on the second, fourth, fifth and sixth characteristics, but noted that the sixth has minimal weight.

4 June 2013 Internal T.I. 2012-0455961I7 - Clergy Residence Deduction

In principle, two clergy members who are spouses could claim the s. 8(1)(c) deduction in respect of two different properties, provided that each could establish that the property in question were his or her own principal place of residence.

CRA noted that "principal place of residence" differs from "principal residence." Unlike the principal residence designation, a taxpayer's "principal place of residence" is always a question of fact, which CRA maintains means "the place where the employee maintains a self-contained domestic establishment." CRA stated:

In our view, the place where the individual normally sleeps is a significant factor in making this determination. Other significant factors include the location of the individual's belongings, where the individual receives his or her mail, and where the individual's immediate family, including the individual's spouse or common-law partner and children, reside."

Whether the individual "ordinarily occupies" a principal place of residence is equivalent to whether the individual "ordinarily resides" at the principal place of residence.

26 March 2010 External T.I. 2009-0350821E5 F - Montant assurable et ouvrant droit à pension

value of housing is business income rather than being deductible under s. 8(1)(c) if pastor receives contributions from congregation as business income

A pastor of the correspondent’s church is provided with housing free of charge, and does not receive a fixed and weekly remuneration but, rather, is remunerated by voluntary contributions from congregation members, which he includes in computing his income from a business. CRA stated:

If your pastor earns income from self-employment, any voluntary payments, or other benefits or transfers received as a result of that self-employment are taxable income. …

On the other hand, if the pastor of your church holds an office or employment, he or she will be required to include in computing income … the value of [the] … lodging … [but] may be eligible for the clergy residence deduction by virtue of paragraph 8(1)(c) if he or she satisfies both of the following conditions: [s. 9(1)(c) conditions summarized].

29 July 2009 External T.I. 2009-0314611E5 F - Résidence pour membres du clergé à la retraite

provision of manse to retired Minister is not taxable employment benefit – so that no s. 8(1)(c) deduction

Regarding the purchase by the Church of a residence for its retired pastors and missionaries, CRA stated:

Under [the function] test, the person must perform one of the following functions to be eligible for the deduction under paragraph 8(1)(c):

is in charge of or ministering to a diocese, parish or congregation;

is engaged exclusively in full-time administrative service by appointment of a religious order or religious denomination

…[T]he provision of housing to retired pastors and/or missionaries who no longer earn income from church office or employment will generally not result in a taxable benefit to be included in computing their income. Therefore, since these pastors and missionaries will not meet the function test described above, the CRA is of the view that they will not be eligible for the paragraph 8(1)(c) deduction.

12 June 2006 Internal T.I. 2006-0186041I7 F - Résidence des membres du clergé

Roman Catholic pastoral care worker did not qualify as he could not perform most sacraments

In finding that a pastoral worker who led services in a Roman Catholic diocese but who was not ordained as a priest did not qualify for the deduction, the Directorate stated:

[I]n order for a pastoral worker to be a regular minister of a religious denomination, we are of the view that the pastoral worker must be authorized or empowered to perform spiritual functions, celebrate religious services, administer sacraments and perform similar religious functions. In general, a pastoral worker is not a regular minister since the pastoral worker is not authorized to administer most of the sacraments of the Roman Catholic Church.

… [W]e cannot conclude that he is entitled to perform most or all of the duties of a minister, including, inter alia, administering most of the sacraments of the Roman Catholic Church.

11 May 2006 Internal T.I. 2006-0178781I7 F - Résidence des membres du clergé

pastoral worker not entitled to deduction

In finding that the taxpayer, who held an M.A. in theology and was an employee within the Roman Catholic Church, was not entitled to the deduction, the Directorate stated:

[I]n order for a pastoral worker to be a regular minister of a religious denomination, we are of the view that the pastoral worker must be authorized or empowered to perform spiritual functions, celebrate religious services, administer sacraments and perform similar religious functions. In general, a pastoral worker is not a regular minister since he or she is not authorized to exercise most of the sacraments of the Roman Catholic Church.

… [W]e cannot conclude that he is entitled to perform most or all of the duties of a minister, including, inter alia, administering most of the sacraments of the Roman Catholic Church.

Words and Phrases

regular minister

2 May 2005 External T.I. 2005-0115461E5 F - Résidence des membres du clergé

RC pastoral workers did not qualify

CRA indicated that certain priests, lay pastoral officers, and management and assistant management were not eligible for the clergy residence deduction. Per its summary, CRA indicated:

Pastoral workers generally do not meet the status test in subparagraph 8(1)(c)(i) because they are not regular ministers of a religious denomination.

16 December 2004 External T.I. 2004-0093221E5 F - Résidence des membres du clergé

RC lay pastoral workers not authorized to exercise most functions of a minister are not regular ministers/ position must be of some permanence

Regarding whether lay pastoral workers who were appointed for terms of 1 or 3 years were regular ministers for the purposes of the clergy residence deduction, CRA referred to its position in IT-141R, paras. 5-6, indicated that the “position of regular minister must be of some permanence,” and then stated:

[L]ay pastoral workers would not be regular ministers where they are not authorized to exercise most or all of the functions of a minister, including, among other things, administering most of the sacraments of the Roman Catholic Church.

28 April 2004 External T.I. 2004-006767

An employee of a particular religious organization, whose duties as a minister are reduced, would meet the function test provided ministering is still an integral part of that job.

9 August 1995 External T.I. 9510675 - CLERGYMAN'S RESIDENCE DEDUCTION

The Pastoral Associate/Co-ordinator of Religious Education at a Roman Catholic church who was engaged exclusively in full-time administrative service by appointment, did not qualify for the deduction because the individual was not a member of the clergy.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(c)		23

9 August 1995 External T.I. 9510675 - CLERGYMAN'S RESIDENCE DEDUCTION

The pastoral Associate/Co-Ordinator of religious education at a Roman Catholic Church would not qualify as a member of the clergy.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(c)		40

28 July 1995 Internal T.I. 9513997 - FOR ADMIN OF XXXXXXXXXX

Walsh v. Lord Advocate, [1956] 3 All E.R. 129 established that in order for there to be a "religious denomination" there must be a lay element which is being ministered to as well as a ministering or clerical element having special status. Accordingly, an Association being considerably RC did not qualify as a religious order or a religious denomination because the Association did not recognize a place in its organization for a lay element.

27 March 1992 T.I. and 15 April 1992 Memorandum (Tax Window, No. 18, p. 8, ¶1835)

Where both members of a couple are members of the clergy each performing duties which qualified them separately for the deduction, then where the couple pay rent, the rent should be allocated between them on some reasonable basis. Where the couple own their residence, they may deduct a fair rental value of the premises.

Subparagraph 8(1)(c)(iii)

Administrative Policy

30 September 2002 Internal T.I. 2002-0152107 F - BRANCHEMENT A DES SERVICES PUBLICS

utilities do not extend to cable, satellite TV and internet in light of s. 8(1) preamble

Regarding the exclusion for “utilities,” the Directorate stated:

[C]able television services, satellite television services and internet connection services are generally not relevant to the income from employment of a member of the clergy. In fact, we generally consider those expenses to be personal expenses, as is the monthly cost of basic home telephone service. Consequently, we are of the view that the amounts relating to those services are not deductible in computing the employment income of a member of the clergy. Paragraph 23 of Interpretation Bulletin IT-141R reflects this interpretation by limiting, for the purposes of paragraph 8(1)(c), the term "utilities" to the amount spent on electricity, heat, water and sewerage.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 62 - Subsection 62(3) - Paragraph 62(3)(g)	utilities include cable, satellite TV and internet	60

Subparagraph 8(1)(c)(iv)

Paragraph 8(1)(f) - Sales expenses

Commentary

S. 8(1)(f) permits a commissioned salesperson to deduct amounts expended by him or her for the purpose of earning income from employment to the extent of the commission income or similar amounts received by him or her in the year in question, provided that various requirements are satisfied. These requirements are as follows:

the taxpayer must be employed in the year in question in connection with the selling of property or the negotiating of contracts for the employer (preamble of s. 8(1)(f));
the taxpayer must be obligated under the contract of employment to pay his or her own expenses (s. 8(1)(f)(i));
the taxpayer must be ordinarily required to carry on the duties of employment away from the employer's place of business(s. 8(1)(f)(ii));
the taxpayer must be remunerated in whole or in part by commissions or other similar amounts fixed by reference to the volume of the sales made or the contracts negotiated (s. 8(1)(f)(iii));
the taxpayer must not be in receipt of an allowance for travel expenses in respect of the year in question which is not included in the taxpayer's income by virtue of s. 6(1)(b)(v); s. 6(1)(b)(v) excludes, from the allowances that are otherwise includible in employment income, reasonable allowances for travel expenses received by an employee from the employer in respect of a period when the employee was employed in connection with the selling of property or negotiating of contracts for the employer (s. 8(1)(f)(iv));
the amounts expended by the taxpayer must not be capital expenditures (except as described in s. 8(1)(j) respecting capital cost allowances for motor vehicles that are used or aircraft that are required for use in the performance of duties of the office or employment, or certain related interest financing costs) (s. 8(1)(f)(v));
the amounts expended are not described in s. 18(1)(l) (respecting expenses for the use or maintenance of a yacht, camp, lodge, or golf course or facility (subject to some exceptions) or membership fees or dues for most clubs) (s. 8(1)(f)(vi)); or
the amounts expended qualified as deductions in computing the automobile standby inclusion under. 6(1)(e) (s. 8(1)(f)(vii)).

In addition, to claim the deduction, the employee must include with his or her return a certificate of the employer (on form T2200) certifying that the conditions for the deduction have been satisfied: s. 8(10). A further requirement for the deduction of meal expenses is that the meals were consumed during a period while the taxpayer was required under the duties of employment to be away, for a period of not less than 12 hours, from the municipality in which the employer's establishment to which the taxpayer ordinarily reported to work was located (and, where applicable, also from the the metropolitan area in which that establishment was located): s. 8(4).

Where there is no explicit requirement to this effect in the taxpayer's contract of employment, a court likely will be prepared to infer that there nonetheless was a requirement for the taxpayer to incur and pay the expenses in question (see 2 above), or to ordinarily carry out his or her duties of employment away from the employer's place of business where failure to do so would have had a prejudicial effect on his or her career or continued employment (Verrier, Gilling), or on his or her ability to generate future commissions (Frappier). However, the employee may not be able to satisfy this test (respecting, for example, car expenses) where the collective bargaining agreement establishing the terms of his employment expressly states that use of a car is not complulsory (Hudema).

The jurisprudential tests developed in connection with applying the general prohibition (in the absence of specific provisions to the contrary) in s. 18(1)(b) against the deduction of capital expenditures in the computation of income from a business or property also apply to the prohibition in s. 8(1)(f)(v) against the deduction of capital expenditures in the computation of income from an office or employment (see 6 above). Similarly to the jurisprudence on the acquisition by a corporation of customer lists (see Tomenson, Sunstrum, Cumberland Investments, Butler, Dominion Dairies and Southam Business Publications), the acquisition by a broker employed by an investment dealer of the customer lists of a departing employee was found to be a capital transaction. However, damages which broker employees were required to pay to their former employer upon moving to a competitor were not capital expenditures (Raphael, Douthwright).

Cases

Urquhart v. Canada, 2016 FCA 76

implied obligation to incur costs to earn enhanced commissions under oral contract

The taxpayer was employed under an oral contract by a Ford dealership in Miramichi, New Brunswick. In allowing the taxpayer’s appeal from the disallowance of expenses claimed under s. 8(1)(f), Rennie J.A. stated (at para. 6):

[R]egarding the contract objectively, it was an implicit or implied term that the employee would be required to incur certain costs in order to earn the commissions contemplated by the contract; see Sattva [2014 SCC 53, [2014] 2 S.C.R. 633] at para 49 [“in contractual interpretation, the goal of the exercise is to ascertain the objective intent of the parties — a fact-specific goal — through the application of legal principles of interpretation”].

Rennie J.A. further found that the Tax Court had erred in not distinguishing required expenses from discretionary expenses, stating (at para. 7):

He did not identify and segregate those expenses that were related to development and marketing of the appellant’s sales (which he was not required to incur under the contract) and those expenses which, when the employment contract was viewed objectively, were directly needed for the appellant to fulfill his responsibilities and obtain his entitlements under the contract (to sell cars and earn commissions) and were expressly agreed with the dealership (charge back).

The required expenses consisted of vehicle transfer costs to obtain the higher commission the dealership had agreed to pay the taxpayer if the cars were present in Miramichi, and the costs of purchasing accessories which he and the dealership had agreed to share. They excluded various promotional costs.

Gifford v. Canada, 2004 DTC 6120, 2004 SCC 15, [2004] 1 S.C.R. 411

The acquisition by the taxpayer, who was employed as a broker by an investment dealer, of the customer lists of a departing employee of the same firm, was found to be made on capital account for purposes of s. 8(1)(f)(v). The purchase "significantly expanded Mr. Gifford's client network, the structure within which he earned his employment income" and the payment was intended to secure a lasting advantage.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Financing Expenditures	loan received on capital account if it is an addition to borrower's capital (cf. inventory)	174
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Goodwill, Trademarks and Customer Lists		70

Hudema v. The Queen, 94 DTC 6287 (FCTD)

The taxpayer was not required to "pay his own expenses" as required by s. 8(1)(f) or "to pay the travelling expenses incurred by him" as required by s. 8(1)(h) given that the collective bargaining agreement specifically said that no employee was obliged to use his car, although it contemplated that he could be authorized to use his car. Furthermore, the receipt by him of a weekly car allowance of $44 per week plus reimbursement for actual gas, oil, lubrication and parking expenses was found to be a reasonable allowance given that the taxpayer "did not demonstrate that it was unreasonable for his employer to expect him to use his vehicle in an efficient way, with the allowance being expected only to pay for such incremental use of his car as his work required" (p. 6290).

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(b) - Subparagraph 6(1)(b)(v)		162

The Queen v. Gilling, 90 DTC 6274, [1990] 1 CTC 392 (FCTD)

implied obligation to incur travel expenses in order to perform marketing duties

Part of the responsibilities of the manager of a grain elevator pool was the sale on a commission basis of farm supplies, in connection with which the taxpayer attended on farmers, delivered farm supplies, and provided services on site. Given "that his failure to perform these duties would have had a prejudicial effect on his employment or on his career" (pp. 6276-7), the travel and other expenses incurred by him were deductible.

Verrier v. The Queen, 90 DTC 6202, [1990] 1 CTC 313 (FCA)

implied obligation to incur expenses away from showroom

followed in McKee v. The Queen, 90 DTC 6205 (FCA)

The taxpayer, who was a highly successful automobile salesmen employed by a Winnipeg dealership, deducted in computing his commission income: expenses of gas and oil for his demonstrator (provided free of charge by his employer) and for two "courtesy" cars owned and provided by him to his customers for their own use when their cars were being serviced; parking charges incurred while conducting business; advertising carried out by him on his own to seek customers for himself; entertainment expenses incurred for the benefit of customers or prospective customers; and commissions or finders' fees paid by him to persons referring customers to him where the referral resulted in a sale. Mahoney J. held that these expenses were deductible:

"It would seem to me that a failure to sell enough cars would have resulted in the Appellant's discharge and if both employer and salesman recognize that enough cars can only be sold if the salesman conducts some of his work away from the showroom, then the salesman is ordinarily required to carry on the duties of his employment away from his employer's place of business."

In the trial division Strayer J. stated that the term "ordinarily" describes "activities which are normal, or of regular occurrence".

Words and Phrases

ordinarily

The Queen v. Malik, 89 DTC 5141, [1989] 1 CTC 316 (FCTD)

Reed, J. rejected an argument that interest on a loan that was no longer being used by the taxpayer to earn income from property was deductible because as a life insurance salesman he was required to keep himself in good financial standing. "Amounts paid with respect to debts unconnected to the employment, to enable a person to remain solvent and thereby retain a licence which allows him or her to engage in a profession or calling, are not closely enough connected to the earning of the employment income to fall under paragraph 8(1)(f).

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c)		31

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose		82

Locations of other summaries		Wordcount
Tax Topics - General Concepts - Evidence	oral evidence of accountign transactions	134

Locations of other summaries		Wordcount
Tax Topics - General Concepts - Onus		67

Administrative Policy

18 February 2015 External T.I. 2012-0471731E5 F - Déductibilité du droit d’usage pour automobile

reduced auto enjoyment not an expenditure

The “Employer” provides a commissioned sales person (who satisfies the s. 8(1)(f) conditions) with an automobile, and includes in the computation of the employee's income a taxable benefit for the use of the automobile. However, the automobile is painted an unusual color and displays the logo of the Employer for promotional reasons.

May the taxable benefit to the employee, for the use of automobiles, be reduced to reflect the fact that the employer has a commercial advantage? If not, may the employee deduct an amount for advertising in the calculation of employment income? After finding that the taxable benefit to the employee could not be reduced, also responded negatively to the second question, stating:

[W]e emphasize the keyword "expended." …

[N]o amount was expended by the taxpayer for advertising. Thus,,, the taxpayer is not entitled to an amount allocated in computing its income.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(2)	no reduction in benefit amount for benefits provided by employee to employer	226

11 April 2016 External T.I. 2015-0564161E5 F - IT-522R par. 36

non-taxable s. 6(1)(b)(v) allowance for one type of expense does not preclude s. 8(1)(f) deduction for other types

An employee (the "Seller"), who performed duties related to the selling of property for an employer, received a reasonable allowance, for example, an allowance based on the number of kilometres travelled, for travel expenses, that was not taxable under s. 6(1)(b)(v), and also spent additional amounts to fulfill duties of employment, for example, for meals, cell phone and promotional gifts. Does the receipt of the s. 6(1)(b)(v) allowance preclude the deduction under s. 8(1)(f) of the other expenses?

After quoting from IT-522R, paras. 34(a) and 36 as representing departures from the literal wording of s. 8(1)(f)(iv), CRA stated:

[A]ccording to this position, an allowance based on the number of kilometres travelled for motor vehicle expenses which is reasonable does not reduce the deduction claimed under paragraph 8(1)(f) by a Seller for reasonable meal expenses as they are two distinct types of expenses and the Seller has not received any non-taxable amount for meal expenses.

Thus, despite a Seller having received an allowance, which is not included in computing income under subparagraph 6(1)(b)(v), for a specific type of expense, it is possible to deduct other reasonable amounts expended to earn income from employment provided that all the other requirements of paragraph 8(1)(f) are satisfied.

8 October 2010 Roundtable, 2010-0373481C6 F - Remboursement de commissions

required repayment of sales commission potentially deductible under s. 8(1)(f)

An employee received an $80,000 sales commission in 2008 but was required to repay the commission in 2009 consequent on the cancellation of the related sales contract. Should the employer issue an amended T4 for the 2008 year, or should the correction be made in the 2009 tax returns of the employer and employee? CRA responded:

[P]aragraph 8(1)(f) could allow the taxpayer to deduct the amount of commissions repaid in 2009 in computing the taxpayer's income for the 2009 taxation year from an office or employment as an amount spent in 2009 to earn that income, provided all the requirements of subparagraphs 8(1)(f)(i) to (iv) are satisfied.

23 April 1991 T.I. (Tax Window, No. 2, p. 22, ¶1210)

An incentive award based on the achievement of pre-determined sales targets, personal utilization rates and on qualitative management criteria set annually by the company for each employee, and not paid unless the company has achieved a pre-determined annual level of overall profitability, does not qualify as a commission or similar amount.

13 January 1989 Memorandum (June 1990 Access Letter, ¶1299)

RC accepts the Neville case as a precedent.

Articles

Beam, Laiken, "Employee Deductions", 1991 Canadian Tax Journal, p. 338.

Paragraph 8(1)(g) - Transport employee’s expenses

Commentary

S. 8(1)(g) permits employees of a person whose principal business is the transport of passengers and/or goods to deduct qualifying expenditures to the extent that the employee is not reimbursed (and is not entitled to be reimbursed) for the expenditures.

Two requirements are stipulated:

the taxpayer's duties of employment required the taxpayer to regularly travel away from the employer's establishment where the taxpayer reported for work and away from the metropolitan area (if any) where that establishment was located, on vehicles used by the employer to transport the goods or passengers (s. 8(1)(g)(i));
those duties of employment also required the taxpayer to regularly make disbursements for meals and lodging while so away from that municipality and metropolitan area (s. 8(1)(g)(i)).

The phrase "meals and lodging" referred to in the 2nd test is to be read conjunctively, so that if the employee is only required to make disbursements for meals, the deduction under s. 8(1)(g) will not be available (Renko, Crawford). However, in Kasaboski, this restriction was interpreted as applying only where the employee returned to his home each day rather than being on the road for days or weeks on end - and it was found in any event that the "and lodging" requirement was satisfied if on most travel days the employee (who slept in the cab of the truck) only incurred meals expenses but on rare occasion incurred lodging expenses for which he or she was usually reimbursed by the employer. Elwood similarly notes that, although an employee must have both meal and lodging expenses to be eligible for a deduction, there is no requirement that the meals be connected to the lodging.

The question as to whether two municipalities are part of the same metropolitan area may be determined by the degree of integration with each other through infrastructure (such as roadways) and public services (Walls, Foster).

Cases

Renko v. Canada (Attorney General), 2003 DTC 5417, 2003 FCA 251

The phrase "meals and lodging" was to be read conjunctively, with the result that a deduction claimed in respect of meals alone was properly disallowed by the Minister.

Walls v. The Queen, 76 DTC 6309, [1976] CTC 501 (FCTD)

The establishment of the taxpayer's employer to which he reported to work was in Windsor. He was entitled to deduct unreimbursed meal expenses incurred by him while in Detroit. Detroit did not constitute part of the metropolitan area of Windsor as it was not integrated with the City of Windsor: "for example, there are no common infrastructures, municipal services such as streets, water, fire or police protection, and there is no political connection." (p. 6312) In addition, Detroit was so much larger than Windsor that it was nonsensical to refer to Detroit as part of the Windsor metropolitan area.

Administrative Policy

26 May 2023 External T.I. 2023-0962521E5 - Employment Expenses of a Pilot

s. 8(1)(g) deduction not available to pilot who returns to home city at the end of the day

A pilot who, as an employee was engaged in the transport of goods or passengers to airports across Canada, would be away for 12 to 17 hours in a day but not required to be away overnight, so that the pilot would return to the employer’s place of business by the end of the day and not incur lodging expenses. Regarding the deductibility of the pilot’s meal expenses, CRA stated:

[O]ne of the conditions for claiming a deduction for meals under paragraph 8(1)(g) … is that an employee must generally be away from home overnight in the performance of their employment duties. Accordingly, the deduction of meal expenses under paragraph 8(1)(g)… is not available to a pilot who returns to their home at the end of each day.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(h)	ss. 8(1)(h), (4) and (10) requirements could be met for meal expenses of pilot	87
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(s)	aviation headset is not a tool	123
Tax Topics - Income Tax Act - Section 8 - Subsection 8(6.1) - Paragraph 8(6.1)(d)	aviation headsets were electronic communication devices	109
Tax Topics - Income Tax Act - Section 8 - Subsection 8(4)	pilot potentially could deduct meal expenses pursuant to s. 8(1)(h) in connection with daily flying from and to the home city, provided that 12-hour requirement met	76

2 June 2006 External T.I. 2006-0174671E5 F - Frais de repas et de logement

transporting of waste was not the employer’s principal business

In finding that employees of a company working in the field of pumping and transporting liquid waste and who typically were required to drive more than two hours to reach the customer site, received taxable benefits on being reimbursed for meals for every 12 hours of work, CRA stated:

Our understanding is that transport is a service ancillary to the other services of the business. … [T]he term transport business does not include a transportation service that is incidental, where the services offered are offered as part of a whole.

Words and Phrases

principal business

1 October 2002 Internal T.I. 2002-0154887 F - DEPENSES DE REPAS

simplified method not available for self-employed individuals

CCRA indicated that the simplified (flat rate per meal) method available for qualifying transport employees was not available to a self-employed individual.

18 July 2002 Internal T.I. 2002-0135177 F - TRANSPORT DE MARCHANDISES

goods include property not intended for sale, such as mail, but do not include securities

The Directorate indicated that the expression "goods transport" does not refer solely to the transport of goods intended for sale, and included the transport of mail, but that the transport of money or securities by armoured truck was not included.

Words and Phrases

goods

27 July 1998 External T.I. 9807745 - LANGLEY, ABBOTSFORD, NISKU AND YALE AS PART OF METRO

Langley and Abbotsford are part of the metropolitan Vancouver area, and Nisku is part of the metropolitan Edmonton area.

8 February 1994 Internal T.I. 9400657 - EMPLOYMENT EXPENSES

General discussion.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(b) - Subparagraph 6(1)(b)(xi)		58
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(i) - Subparagraph 8(1)(i)(ii)		64

Paragraph 8(1)(h) - Travel expenses

Commentary

S. 8(1)(h) provides for the deduction of amounts expended by a taxpayer for traveling in the course of the taxpayer's office or employment where

the taxpayer is ordinarily required to carry on the duties of employment away from the employer's place of business or in different places (s. 8(1)(g)(i)); and
the taxpayer is required under the contract of employment to pay for such expenses (s. 8(1)(h)(ii));
the taxpayer is not in receipt of a travel allowance that (by virtue of s. 6(1)(b)(v), (vi) or (vii)) is not included in his or her income for the year in question (s. 8(1)(g)(iii)); and
the taxpayer does not claim a deduction for the year under s. 6(1)(e), 6(1)(f) or 6(1)(g).

Qualifying motor vehicle expenses are deducted under the similarly worded provisions of s. 8(1)(h.1).

A further requirement for the deduction of meal expenses is that the meals were consumed during a period while the taxpayer was required under the duties of employment to be away, for a period of not less than 12 hours, from the municipality in which the employer's establishment to which the taxpayer ordinarily reported to work was located (and, where applicable, also from the the metropolitan area in which that establishment was located): s. 8(4).

As the employee is only entitled to deduct expenses expended in the course of the taxpayer's employment, traveling expenses incurred in traveling between work and home (which generally are considered to be of a personal nature, provided that the home is not used as an office or other work site) do not qualify for deduction even if the "ordinarily away" requirement of s. 8(1)(h)(i) is satisfied (Diemert, Vickers, Blackburn, Gutscher - and the jurisprudence under s. 8(1)(h.1)). However, the general principle, that travel from home to work is a personal expense, is typically confined to cases where the taxpayer's destination is a regular place of business (see Velnot). Accordingly, in the Homsy case, travel expenses incurred by an auditor in traveling between home and various different audit sites were found not to be of a personal nature (see also Moore). Where the taxpayer commutes throughout the year to the same special work site of his employer, the "ordinarily...away" requirement will not be satisfied (Wright), unless the site is not a permanent establishment of the employer (see Martorelli). Where the employee regularly works at a home office, travel to the office of the employer in another city may qualify for deduction (Toutov).

An employee may be considered to be ordinarily required to carry on his or her duties away from the employer's place of business (which can include a school) where he or she annually attends professional development seminars is accordance with the employer's expectations (Imray), is expected to attend school board meetings at a different location (Patterson), is expected as an implied term of her employment contract to attend such matters as principals' meetings and extracurricular events (Moore), is required to attend a training course in another city (Tremblay) or in the course of his duties as a fire chief must spend time away from the fire station responding to emergency calls or conducting inspections (Gariépy). Reporting to work daily at a trailer of the employer is not considered to be inconsistent with the employer's place of business being elsewhere (Freake). However, the taxpayer will not satisfy the "ordinarily away" requirement if for each shift he or she reports to work at a different establishment of a different employer (Ménard).

In appropriate circumstances, the costs of maintaining a small apartment at a special work site apart from the taxpayer's home can qualify for deduction (Gariépy).

A requirement under the taxpayer's duties of employment to carry on those duties away from the employer's place of employment or in different places, or a requirement under the contract of employment to pay for the expenses incurred in the related travel generally will be inferred where failure to do so could impair job function to the point of termination (Mina), or where such failure would likely result in a bad performance evaluation which could affect the employee's future with the employer for years to come (Hoedel, see also Rozen).

Cases

Imray v. The Queen, 98 DTC 6580, 1998 CanLII 8609 (FC), [1998] 4 CTC 221 (FCTD)

The taxpayer was required to attend an annual professional development seminar for teachers and had done so for 28 of the previous 29 years. In finding that the taxpayer's related traveling expenses were deductible, Campbell J. stated (at p. 6585) that he had "no hesitation in finding that teachers' convention attendance is 'normal', 'a matter of regular occurrence', 'commonly' and 'usually' occurs, and is a requirement which takes teachers 'from time to time away from the places which they usually work'."

Tremblay v. The Queen (1997), 223 N.R. 85, 1997 CanLII 5678 (FCA (FCA)

After the taxpayer, who lived in Val Bélair, was hired by the RCMP, he was immediately sent to Montreal to take an English course from September 1991 to May 1992. In affirming a finding that the taxpayer was entitled to deduct various living expenses incurred by him during this period, the Court stated that "even a literal interpretation of subparagraph 8(1)(h)(i) leads to the conclusion that the respondent was ordinarily carrying on the duties of his employment away from his employer's place of business while he was assigned to Montreal during the 1991 and 1992 taxation years".

The Queen v. Chrapko, 88 DTC 6487, [1988] 2 CTC 342 (FCA)

The taxpayer worked 75% of his time as an employee of the Ontario Jockey Club at two race tracks in Toronto, and 25% of his time at a race track in Fort Erie, and resided in Niagara Falls. Given that he ordianrily worked at his employers establishments in Toronto, he was entitled to deduct traveling expenses incurred while working at the Fort Erie race track, but not at the two Toronto race tracks.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 5 - Subsection 5(1)		59

The Queen v. Patterson, 82 DTC 6326, [1982] CTC 371 (FCTD)

Automobile expenses incurred by a school principal as a consequence of attending numerous School Board meetings, student sports events and student nature study trips were deductible.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(a)		20

The Queen v. Diemert, 76 DTC 6187, [1976] CTC 301 (FCTD)

A locomotive engineer who lived in Regina but for the most part was assigned to work for five or six days at a time in Assiniboia was unable to deduct his expenses (at 10¢ per mile) in driving to and from Assiniboia. Since the starting point of his work was found to be Assiniboia rather than Regina (notwithstanding that his assignment to Assiniboia was determined by the Regina establishment of his employer), his expenses were incurred in the course of traveling to his work rather than on his work, and the expenses accordingly were not incurred "in the course of his employment".

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(i) - Subparagraph 8(1)(i)(ii)		76

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 115 - Subsection 115(1) - Paragraph 115(1)(f)		58

Administrative Policy

26 May 2023 External T.I. 2023-0962521E5 - Employment Expenses of a Pilot

ss. 8(1)(h), (4) and (10) requirements could be met for meal expenses of pilot

A pilot who, as an employee was engaged in the transport of goods or passengers to airports across Canada, would be away for 12 to 17 hours in a day but not required to be away overnight, so that the pilot would return to the employer’s place of business by the end of the day and not incur lodging expenses. CRA discussed the joint requirements under ss. 8(1)(h), 8(4) and 8(10) for deductibility of the pilot’s meal expenses, and indicated that these requirements could potentially be met.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(g)	s. 8(1)(g) deduction not available to pilot who returns to home city at the end of the day	134
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(s)	aviation headset is not a tool	123
Tax Topics - Income Tax Act - Section 8 - Subsection 8(6.1) - Paragraph 8(6.1)(d)	aviation headsets were electronic communication devices	109
Tax Topics - Income Tax Act - Section 8 - Subsection 8(4)	pilot potentially could deduct meal expenses pursuant to s. 8(1)(h) in connection with daily flying from and to the home city, provided that 12-hour requirement met	76

18 March 2014 External T.I. 2012-0438941E5 - Deduction of expenses against executor fees

executor not required to bear expenses

An executor of an estate is considered to earn fees from an office rather than in the course of a business. The executor incurs expenses, with the estate being wound-up before the expenses could be reimbursed. Such expenses were not deductible under s. 8(1)(h) or (h.1) given that the estate would generally be required to reimburse the executor for his costs so that it could not be said that he was required to bear those costs.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Office	executor holding an office	34

22 March 2011 Internal T.I. 2010-0387551I7 F - Dépenses - travailleur indépendant

expenses of costumes, breast implants and rejuvenation expenses of erotic website were non-deductible

The taxpayer operated an erotic website for which she was the model and her husband took care of the technical side, with profits split equally. It was assumed that they were not in partnership. The Directorate stated:

[T]he costs of clothing, costumes and fine lingerie of a self-employed person who carries on a business in the form of an erotic website are personal expenses that are not deductible against the business income of the taxpayer where such clothing could be used other than in the course of carrying on the business. Those expenses also cannot qualify for capital cost allowance.

Similarly, fees for a fitness center membership, for breast implants, cosmetic treatments (such as botox injections, rejuvenation treatments, and hair removal) incurred by the taxpayer are not deductible since they represent, by their nature, expenses of a personal nature.

The CRA summary stated: “the expenses appear to be of a personal nature.”

Locations of other summaries		Wordcount
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 8 - Paragraph 8(i)	erotic costumes used on website did not qualify	122

12 February 1998 External T.I. 9730335 - DEDUCTIBILITY OF MOTOR VEHICLE TRAVEL EXPENSES

Employees, who cannot reside in the community because of cultural constraints, will not be able to deduct their travel expenses between their homes and their work location, because such expenses are considered personal expenses.

9 February 1990 Memorandum (July 1990 Access Letter, ¶1313)

Tree planters who report to several job sites in the course of the year and who cannot be considered to regularly or ordinarily report to any one place of business of the employer, can clearly meet the "in different places" requirement.

11 January 1990 Memorandum (June 1990 Access Letter, ¶1249)

Explanation as to why neither s. 8(1)(g) or (h) permits the deduction of the cost of food used for a meal which an individual carries from home to the job.

9 August 1989 Directive ASG-89-30 (June 1990 Access Letter, ¶1288)

Guidelines respecting whether an employee is ordinarily required to carry on his employment duties away from the employer's place of business and whether under the contract of employment he is required to pay the expenses incurred.

9 January 1989 Memorandum (June 1990 Access Letter, ¶1294)

In light of the Chrapko decision, a determination will have to be made of each employee's attendance at a particular track in order to locate the one where he usually works.

Subparagraph 8(1)(h)(i)

Cases

The Queen v. Phyllis Moore, 90 DTC 6200, [1990] 1 CTC 311 (FCA)

It was an implied term of a school principal's employment contract that she travel away from the school premises in connection with such matters as attending principals' meetings away from her school, attending evening meetings at her school and participating in extracurricular activities. If she had not done so, she likely would have received unfavourable performance appraisals. Accordingly, the bulk of such expenses were deductible. However, "travel between home and her school, even though outside regular hours of work, was not in fulfillment of the requirement to carry on her duties 'away from her employer's place of business or in a different place', and were not deductible. "

The Queen v. Wright, 81 DTC 5004, [1981] CTC 14 (FCTD)

The taxpayer, who was employed by a construction company with its head office in London, Ontario, commuted throughout the 1975 taxation year directly from his residence to a construction site in Aylmer. Since the Aylmer construction site was a place of business of his employer, and he worked there throughout the year, his appeal failed.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(h.1)		57

Administrative Policy

12 April 2017 External T.I. 2016-0642571E5 - Employee travel - board and lodging

logging employees working at a remote logging site unable to deduct their room and board fees

Employees travel from home to a remote forest camp where they receive board and lodging for a charge. Their employeer transports them daily between the camp and the logging site. In finding that the fees charged to them were not deductible under s. 8(1)(h), CRA stated:

[T]he camp is a place of business for [the employer]. Therefore…the expenses were not incurred while travelling away from the employer’s place of business… .

Subparagraph 8(1)(h)(ii)

Cases

The Queen v. Mina and Jacobi, 88 DTC 6245, [1988] 1 CTC 380 (FCTD)

Educational consultants employed by the North York Board of Education were entitled to deduct automobile expenses incurred by them in connection with making frequent daily trips between five schools and their office location in light of evidence that although lack of a car would not immediately lead to termination, termination would follow if the employee's job function were impaired. The receipt of (inadequate) mileage allowances did not affect this conclusion.

In determining the deductible car expenses, the percentage of miles driven in employment was applied to operating costs (gas, oil, repairs and car washes) and a combined percentage, reflecting both mileage and time used or available for employment, was applied to ownership costs (CCA, interest, licences and insurance).

Hoedel v. The Queen, 86 DTC 6535, [1986] 2 CTC 419 (FCA)

The taxpayer, who was a member of the Canine Division of the Regina Police Department, was provided with a vehicle that was specially adapted for transporting his dog and a general allowance of $70 per month. Transportation of the dog on his off-duty hours was a condition for him to be a member of the Canine Division in the sense that non-compliance with that condition "would likely result in a bad performance evaluation which could affect a member's future in the police force for years to come. "The taxpayer accordingly was entitled to deduct expenses incurred in transporting the dog between home and the police station, as well as increased expenses on trips of a purely personal character.

The Queen v. Jeromel, 86 DTC 6370, [1986] 2 CTC 207 (FCTD)

It was held that the taxpayer, who was granted a one-year sabbatical from his duties as a teacher for the purpose of undertaking graduate studies, was not required to undertake the course of studies as part of his duties of employment, and received his salary for the year on account of his previous employment rather than in payment for the current performance of duties. Travelling expenses which he incurred in the course of pursuing his studies were non-deductible.

Rozen v. The Queen, 85 DTC 5611, [1986] 1 CTC 50 (FCTD)

A staff accountant at Thorne Riddell was required as an implied term of his employment contract to use his automobile in the course of performing audits at client premises at various locations within the City of Vancouver, and accordingly was entitled to the deduction. "If an employee is obliged to travel to do his work and his employer is not prepared to pay the exact and total cost of transportation, then he must come within the requirements of subparagraph 8(1)(h)(ii)."

The Queen v. Cival, 83 DTC 5168, [1983] CTC 153 (FCA)

It is not sufficient that under a contract of employment the employer undertook to reimburse the employee on a mileage basis for expenses that he incurred in using his car in the performance of his duties. The employee also must be contractually bound to use his car in doing his job.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(b) - Subparagraph 6(1)(b)(vii)		16

Administrative Policy

8 February 1994 T.I. 940065 (C.T.O. "Employment Expenses")

The fact that the employee is not required to use her own personal vehicle but chooses to do so, as an option under the employment contract, does not automatically mean that she is not required under the contract to pay the travelling expenses or motor vehicle expenses as envisioned by s. 8(1)(h)(ii) and s. 8(1)(h.1)(ii). Once she chooses to use her vehicle then by implication she is required to pay the motor vehicle expenses.

86 C.R. - Q.75

The decision in Cival emphasized that the employee must be contractually bound to provide the automobile.

Subparagraph 8(1)(h)(iii)

Administrative Policy

11 July 1995 External T.I. 9508235 - WORK SPACE DEDUCTIBLE AS SUPPLIES

"Workspace expenses which are deductible as 'supplies' under subparagraph 8(1)(i)(iii) of the Act consist of a reasonable proportion of expenses paid for the maintenance of the workspace such as the cost of fuel, electricity, light bulbs, cleaning material and minor repairs."

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(i) - Subparagraph 8(1)(i)(iii)		74
Tax Topics - Income Tax Act - Section 8 - Subsection 8(13)		29

6 June 1995 Internal T.I. 9502987 - WORK SPACE IN THE HOME

A T2200 may be issued to an employee who is an auditor whose duties are performed for the most part at the taxpayer's place of business and at an office established in his home: s. 8(10) does not require that the limitations set out in s. 8(13) be considered.

22 July 1994 T.I. 941204 (C.T.O. "Employment and Teachers' Supplies") (See also 941752)

Regarding the deductibility of expenses incurred by teachers to purchase supplies for use in their classrooms, RC stated: "In order to determine if an expense incurred by an employee, which was not expressly required in the contract was actually an implied requirement, the Courts have reviewed whether or not the failure to meet the requirement could result in the cessation of employment, poor performance evaluation or other disciplinary action on the part of the employer."

18 July 89 T.I. (Dec. 89 Access Letter, ¶1042)

Where the employer provided an allowance for trips exceeding 15 kilometres which were non-taxable by virtue of s. 6(1)(b)(vii.1), the employee thereby was not permitted a deduction under s. 8(1)(h) for trips under 15 kilometres.

Articles

Wilson, "Employment Status Under the Income Tax Act", 1993 Conference Report, pp. 2:10-11: Discussion of meaning of "supplies".

Paragraph 8(1)(h.1) - Motor vehicle travel expenses

Commentary

S. 8(1)(h.1) is similar to s. 8(1)(h), except that the former deals only with motor vehicle expenses, which are excluded from the scope of potentially eligible expenses under s. 8(1)(h).

In order for the expenses in question to be deducible, they must be incurred while performing duties of employment (Hogg). Accordingly, travel that is simply getting oneself to the employer's place of work will not qualify for the deduction (O'Neil). However, the general principle, that travel from home to work is a personal expense, is typically confined to cases where the taxpayer's destination is a regular place of business (Velnot).

However, a special construction site of the employer generally will not be considered to be the place of business of the employer, so that costs of travel by the employee between his home and the construction site can potentially qualify for deduction (Martorelli).

Cases

Hogg v. Canada, 2002 DTC 7037, 2002 FCA 177

expenses incurred by a judge in travelling between home and court room were not incurred in the course of the employment

The taxpayer, who was a judge of the Ontario Provincial Court, Criminal Division, was not able to deduct the cost of travelling to and from his home to the Court House in his own car or of travelling in his car when presiding away from the Court House or when attending meetings in other locations. Nadon J.A. stated (at para. 12):

"... a plain reading of both the French and English text of paragraph 8(1)(h.1) of the Act makes it clear that the words 'motor vehicle expenses incurred for travelling in the course of the office ...' necessarily require that these expenses be incurred by the taxpayer while performing the duties of his office."

Locations of other summaries		Wordcount
Tax Topics - Statutory Interpretation - French and English Version		48

Locations of other summaries		Wordcount
Tax Topics - General Concepts - Estoppel		146
Tax Topics - General Concepts - Res Judicata		146
Tax Topics - Income Tax Act - Section 162 - Subsection 162(2)		64

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(b) - Subparagraph 6(1)(b)(vii.1)		202

Locations of other summaries		Wordcount
Tax Topics - Income Tax Regulations - Regulation 400 - Subsection 400(2)		90

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(h) - Subparagraph 8(1)(h)(i)		57

Administrative Policy

10 June 2021 External T.I. 2017-0696041E5 - Automobile Taxable Benefits

reasonable per-kilometre charge can be used to determine electric-vehicle cost of travelling

CRA also was asked about employees who are provided with electric vehicles for use in performing their employment duties and who are required to recharge the vehicle battery at home - and may not be able to identify the portion of their monthly electricity bill pertaining to such charging. CRA noted that this allocation was relevant inter alia because:

the electricity costs paid by the employee that are established to be attributable to the personal use of the vehicle reduce the operating expense benefit under s. 6(1)(k)
employer reimbursements for reasonable employment-related electricity costs paid by the employee, generally are not a taxable benefit
where there is no such reimbursement, employment-related electricity costs that are established may be deductible by the employee under s. 8(1)(h.1), where its documentary requirements are met

CRA then stated:

Where it is not possible to produce supporting documentation showing the exact amount of electricity expenses incurred for an electric vehicle, other means for establishing the amount of employment-related electricity costs may be acceptable. For example, the establishment of an average per-kilometre electricity cost could be a reasonable method.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(2) - Element E	employer covering collision damage to leased car not included in standby charge calculation	162
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(k)	reasonable per-kilometer charge could be used to infer electric vehicle charging costs	217

17 August 2020 External T.I. 2016-0643631E5 F - Frais de déplacement

commuting expenses to a 2nd more distant regular employer establishment were personal

An employee works alternating weeks at an employer establishment located in the city where the employee resides and at a second establishment located in a city approximately 300 km from the first establishment. CRA stated:

[I]f the employer determines that [the two establishments] are "regular places of employment" of the employee, the travel expenses incurred by the employee to travel between the individual's residence and these locations are personal expenses of the employee. Amounts paid to the employee for such travel must therefore be included in computing the employee's income … [and] the employee cannot deduct personal travel expenses in computing income from an office or employment.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(b) - Subparagraph 6(1)(b)(vii.1)	where the employee alternates between a close and distant regular place of work, travel expenses to both locations are personal	164

14 September 2017 Roundtable, 2017-0703881C6 - CPA Alberta 2017 Q17: Electric Vehicle Taxable Benefits

requirements for employee deduction of electricity costs for home vehicle charging station

A free charging station is provided at an employee’s home for a car used in performing employment duties. As the charging station draws on the employee’s electricity, the employee effectively bearing a portion of the operating costs. In this regard, CRA stated:

Where an employer does not reimburse an employee for employment-related electricity costs paid by the employee and the employment-related electricity costs can be established, the costs may be deducted by the employee as motor vehicle travel expenses if all of the conditions in paragraph 8(1)(h.1) … are met …:

was normally required to carry out his or her employment duties away from the employer’s place of business (or in different places);

was required by the contract of employment to pay such expenses; and

did not receive a non-taxable allowance or reimbursement in respect of the motor vehicle expenses.

…[S]ubsection 8(10) … requires the employee to obtain a completed and signed Form T2200 …

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a)	benefit from employer-provided charging station	205
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(k)	operating expense benefit from vehicle charging station reduced by employee's related personal electricity bill	90

2 February 2017 Quebec CPA Individual Taxation Roundtable Q. 1.7, 2016-0674811C6 F - Allocations automobiles & dépenses afférentes

if vehicle allowance is too low, employee can include the allowance and deduct the vehicle expenses/T2200 production expected

In discussing the situation where an employer limits the number of kilometers travelled by an employee in the course of employment for which it will pay a per-kilometer allowance, e.g., where the employer will stop paying once 10,000 kilometers have been driven in any year, or it does not pay for the first 20 km travelled in each employment-related trip, CRA stated:

In such cases, an allowance may not be high enough in relation to expenses that an employee is expected to incur in a specific situation, and thus not be reasonable. If applicable, the allowance is a taxable benefit that the employee will have to include in employment income in accordance with paragraph 6(1)(b). An employee may, however, if all of the requirements are met, claim the deductions provided in paragraphs 8(1)(h), (h.1) or (j). …

In addition, the CRA has stated…that where an employee elects to include in income the amount of a non-taxable motor vehicle allowance, the taxpayer can deduct the expenses for that vehicle which were actually incurred and which are otherwise deductible on condition that the taxpayer can demonstrate that such expenses are in excess of the allowance in question.

CRA also stated:

An employer is not required to complete or sign Form T2200 for an employee if the employer is of the opinion that the conditions of employment set out in paragraph 8(1)(h.1) or any of the other provisions referred to in subsection 8(10) are not satisfied. However, the CRA expects employers to complete Form T2200 in situations where employees have reasonable grounds to claim a deduction under paragraph 8(1)(h.1) or under the other provisions of section 8 referred to in subsection 8(10).

Locations of other summaries		Wordcount
Tax Topics - Income Tax Regulations - Regulation 200 - Subsection 200(3)	correction of T4s	177

27 October 2014 External T.I. 2013-0507001E5 F - Obligation de remplir un T2200 pour un employé

employer expected to provide T2200 if applicable

Does the employer have an obligation to complete a form T2200 at the employee's request? CRA responded (TaxInterpretations translation):

An employer is not obliged to complete and sign a form T2200 for an employee if it knows that the conditions specified in paragraph 8(1)(h.1)…are not satisfied. CRA expects that employers will provide their employees with a duly completed and signed form T2200 in situations where the conditions set out in paragraph 8(1)(h.1) are satisfied.

19 August 2014 External T.I. 2014-0529741E5 F - Frais afférents à un véhicule à moteur (chantiers)

usual places of work of an employee (which can be multiple locations based on where the employee reports for work) is each a place of business of the employer

A construction employee is required to go from his residence to the various work sites of his employer. He works only a few days per construction site, for a total of about forty construction sites in the year. Does he satisfy the s. 8(1)(h.1) requirement that he is ordinarily required to carry on the duties of employment away from his employer’s place of business or in different places? Before indicating that this was a question of fact, CRA stated:

[W]here an employer has work sites at different locations to which the employee must report regularly in the course of employment, the CRA considers that prima facie the employee's travelling between teh employee's place of residence and the work sites to be of a personal nature. However, employees can claim their vehicle expenses under paragraph 8(1)(h.1) if they demonstrates that they are ordinarily required to carry on their duties of employment away from the places of business of their employer, and that the vehicle expenses were incurred in the performance of their duties.

The usual place of work of an employee constitutes a place of business of the employer. The place of business of the employer is established in relation to the employee (Nelson v. MNR, 81 DTC 190 (TRB)) and is generally the place where the employee must report for work to receive on-site instructions. An employee can have more than one usual place of work. In this case, the fact that an employee reports more frequently to one work place than to other places does not prevent the other places from also being usual places of work.

Words and Phrases

place of business

11 October 2013 Roundtable, 2013-0495591C6 F - Déplacement entre résidence et chantier

employer-requested travel to and from employee’s residence and a non-usual place of work is non-personal

Can a construction worker who is called upon to travel to about 30 construction sites annually at the request of his employer treat travel to and from his residence to the various sites as being in the course of his employment if his presence at each site is only for a few days or weeks and he may have to move between two sites occasionally at the employer’s request (or may travel at the employer’s request, e.g., visiting a supplier)? CRA responded:

Generally speaking, an employee's usual place of employment is the place where the employee must report for work and receive instructions from the person responsible at the site. An employee may have more than one usual place of work. In this case, the mere fact that an employee reports more frequently to one workplace than to others, does not prevent the other places from also being usual places of employment.

Where an employer has work sites in different places to which an employee must regularly report in the course of the employment, at first sight, we consider that the employee's travel between the employee’s residence and the employer's work sites is of a personal nature. ...

[T]ravel between an employee's residence and his or her usual place of work is not carried out in the performance of the duties of the office or employment, even if the employee is required to travel during working hours to different locations at the request of the employer. ...

However, when an employee leaves his or her residence to go to a place other than the employee’s usual place of work or returns from that place to the employee’s residence, this travel will generally be considered as travel in the performance of the duties of his or her office or employment.

5 October 2012 Roundtable, 2012-0454141C6 F - Déductibilité des frais afférents à un véhicule

s. 6(1)(b) inclusion and s. 8(1)(h.1) deduction where allowance received for daily travel only in excess of 40 kilometres

Interpretation 2010-0387391E5 indicated, respecting construction employees who travelled in their cars between different work sites to which they were assigned in the course of their employment, that "where an allowance is paid only for part of the employee's travel, the CRA is generally of the view that there are two trips, one covered by the allowance, the other which is not.” Thus, an employee who travels 60 kilometers and receives an allowance for the excess over the first 40 kilometers would make two trips: one of 40 kilometers not covered by the allowance: and one of 20 kilometers covered by the allowance. If the employee receives $0.44 per kilometer for travel, but only for the excess of travel over 40 kilometers, the allowance received by that employee is unreasonably low, since it does not cover the entire distance traveled. The employee could therefore, as stated in Interpretation 2006-0185451E5, voluntarily include the amount of the allowance in the employee’s income and deduct the expenses related to the use of the employee’s motor vehicle in computing the employee’s income.

Can the CRA indicate whether it agrees with the position set out above or whether it is maintaining its position in 2010-0387391E5? CRA stated:

The opinion described in your question has not been valid since July 15, 2011.

In the situation you described … the allowance based on a rate of $0.44 per kilometer received by the employee should be included in computing the employee’s income by virtue of paragraph 6(1)(b). Similarly, the employee may claim a deduction in computing the employee’s income for the employee’s motor vehicle expenses under paragraph 8(1)(h.1) in respect of the 60 kilometers that the employee traveled in the performance of the duties of the employee’s employment.

22 June 2011 External T.I. 2010-0387391E5 F - Allocations pour véhicule à moteur

employees entitled to s. 8(1)(h.1) deduction where they received an allowance that was taxable under s. 6(1)(b)(x)

reversed in 2012-0454141C6 F

Employees of a construction company work, for between a day and a few weeks, at various worksites in the province that are not their employer's place of business, and receive a travel allowance, for their travel by car between their home and the worksite, two rates of per-kilometer allowance based on whether the kilometers travelled exceeded a threshold.

CRA stated:

[T]he allowance is not reasonable since it is not based solely on the number of kilometers travelled by employees in fulfilling the duties of their employment. Those employees could therefore deduct all expenses incurred to travel from their place of residence to the worksites to which they are assigned. In fact, for the portion of their travel exceeding XXXXXXXX, the allowance paid for the travel exceeding XXXXXXXXXX would be deemed not to be reasonable, whereas the portion of their travel that is less than XXXXXXXXXX would not entitle them to an allowance.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(b) - Subparagraph 6(1)(b)(x)	allowance taxable (but s. 8(1)(h.1) deduction) where 2 different rates	199

20 July 2009 External T.I. 2009-0312541E5 F - Allocation pour usage d'un véhicule à moteur

T2200 can be prepared where car allowance bifurcated into 2 allowances, one of which is taxable

The employer, whose nurses used their motor vehicles in the course of their employment, paid its employees an allowance of 0.40$/km, while for any excess kilometres, the employer pays an allowance at the rate of 0.325$/km. However, where the kilometres were lower than 8,000 km, the collective agreement provided for an allowance of $0.40/km for the kilometres travelled as well as an allowance of $0.08/km for the difference between the kilometres travelled and the 8,000 km threshold. After finding that the car allowance should be bifurcated into two allowances: a reasonable non-taxable per-kilometre allowance; and an unreasonable taxable minimum allowance, CRA stated:

Motor vehicle expenses incurred by an employee in the performance of employment duties may be deducted in computing employment income under paragraph 8(1)(h.1). Where an employee receives an allowance for the use of a motor vehicle in a taxation year that is not, because of paragraph 6(1)(b), included in computing the employee's income for the year, no deduction is permitted under paragraph 8(1)(h.1). However, if the employee can demonstrate that the motor vehicle expenses incurred in performing the employment duties exceed the amount of any allowance received and that the allowance is fully included in computing the employee's income (including any portion that may not be taxable because of paragraph 6(1)(b) and any amount for reimbursement of commercial automobile insurance), the CRA will generally allow the deductibility of all motor vehicle expenses incurred in performing the employment duties.

In such circumstances, the employer will have to complete Form T2200 to allow employees to deduct their motor vehicle expenses.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(b) - Subparagraph 6(1)(b)(x)	car allowance bifurcated into 2 allowances: reasonable per-kilometre allowance; and unreasonable minimum allowance	216

2 December 2004 External T.I. 2004-0083931E5 F - Frais relatifs à une garantie prolongée

cost of extended car warranty that meets the s. 8(1)(f) or (h.1) conditions is deductible on cash basis

Regarding the deductibility of the cost of an extended warranty on an automobile paid by an employee, CRA stated:

[T]he conditions of paragraph 8(1)(f) or paragraph 8(1)(h.1) … must be satisfied for the employee to be entitled to a deduction. Since an employee computes income on a cash basis and subsection 18(9) does not apply to an employee, we are of the view that the extended warranty fee paid by an employee (which would otherwise be deductible pursuant to paragraph 8(1)(f) or paragraph 8(1)(h.1), as the case may be) will be fully deductible in the year of payment.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(9)	cost of extended car warranty is subject to s. 18(9)	79

2 December 2002 External T.I. 2002-0151325 F - FRAIS DEPLACEMENT

tacit requirement could not be invoked where the collective agreement explicitly assigned responsibility for travel expenses to the employer (who refused to pay)

Although the collective agreement required the employer to pay the employees’ travel expenses, it refused to do so, so that the employees incurred travel expenses to get from the employer's place of business to the various worksites and from one worksite to another. CCRA stated:

[The] employees must incur those costs in order to keep their employment. Nevertheless, since it is clearly established in the collective agreement that travel expenses are to be paid by the employer, it is not possible to invoke the concept of tacit or implicit agreement as invoked in … Moore … and … Betz ... [which] determined that travel was implicitly required as part of the taxpayers' employment in order to properly perform their duties and obtain a favourable performance appraisal. …

29 July 2002 External T.I. 2001-007075A F - DEPLACEMENT - TRAVAILLEUR FORESTIER

travel between home and forestry camp, but not between forestry camp and cutting sites, generally was personal

Travel of forestry employees from their residences to forestry camps was considered to be of a personal nature whereas travel between the forestry camps and cutting or planting sites was considered to be in the course of employment. Since the workers could receive instructions by cell phone or mobile radio, there did not seem to be any reason for them to report to their employer’s office, so that travel between that office and the forestry camps was of a personal nature.

Where there was no foresters camp established and the cutting sites changed every week or two weeks without a return to a previous site, such sites perhaps would not constitute regular places of employment, so that travel between those sites and the employees’ residences would not be personal in nature.

12 September 1997 Internal T.I. 9716457 - WHETHER REQUIRED BY CONTRACT TO PAY EXPENSE

The requirement that the employee be required under the contract of employment to pay the motor vehicle expenses "may also be considered to have been satisfied where it was testedly understood by the employer and the employee that the employee pay the travel expenses."

Where the employee is in receipt of a per debt kilometre allowance that is X% of the rate in Regulations 7306, the employee will be precluded from deducting motor vehicle travel expenses under s. 8(1)(h.1) if this allowance is not included in her income (as might be the case if the allowance is reasonable in amount).

The employee is not precluded from deducting motor vehicle expenses under s. 8(1)(h.1) if she elects not to draw on an allowance made available to her by her employer.

Paragraph 8(1)(i) - Dues and other expenses of performing duties

Subparagraph 8(1)(i)(i)

Commentary

S. 8(1)(i)(i) provides for the deduction in computing a taxpayer's income from an office or employment of annual professional membership dues whose payment is necessary to maintain a professional status recognized by statute.

This requirement will be considered to be satisfied where one or more provincial statutes require that certain services be performed by a member of the body to which the dues in question are paid (Montgomery). There is no requirement that the dues be paid to a body that is provincially regulated.

Cases

Montgomery v. Minister of National Revenue, 99 DTC 5186, [1999] 2 CTC 196 (FCA)

The taxpayer, a Revenue Canada appraiser to the Appraisal Institute of Canada, who paid fees to the Appraisal Institute of Canada, which was not given any special status by statute although three provincial statutes or the regulations thereunder required certain appraisals to be performed by a member of that or a similar institute. In finding that the taxpayer was entitled to deduct the fees, Rothstein J.A. stated (at p. 5189):

"The dictionary definition of 'recognized' is, in this context, 'to acknowledge the existence, validity, character or claims of' ... . Parliament intended to restrict the meaning of 'recognized' to include the requirement of being 'incorporated', 'created' or 'regulated' by statute, it was open to it to use words to that effect."

Words and Phrases

recognized

Locations of other summaries		Wordcount
Tax Topics - Statutory Interpretation - Redundancy/reading in words	Appraisal Institute recognized by statute where statutes or Regulations required appraisals to be performed by members	46

The Queen v. Mousseau, 95 DTC 5089, [1995] 2 CTC 431 (FCTD)

An appraiser who was required to pay annual dues to the Appraisal Institute of Canada in order to maintain his A.A.C.I. designation was unable to point to any legislative enactments in effect in the taxation year in question (1987) which made reference to the designation of A.A.C.I.

James Alonzo Petrin v. Her Majesty The Queen, 91 DTC 5266, [1991] 1 CTC 94 (FCTD)

Because the Appraisal Institute of Canada and the Institute of Municipal Assessors are not recognized by statute, annual professional membership dues paid to them by the taxpayer were not deductible from his employment income.

The Queen v. Swingle, 77 DTC 5301, [1977] CTC 448 (FCTD)

A highly educated chemist who was employed by the federal Department of Transport and who was designated as an analyst pursuant to S.731(1) of the Canada Shipping Act (for the purposes inter alia of giving certificates as to pollution counts) did not have a professional status that was recognized by statute, and fees paid to various chemical and allied societies accordingly were non-deductible.

Collier, J. indicated in obiter dicta that the question of necessity should be determined by reference to the practical and business sense of what is necessary.

Administrative Policy

8 August 2019 Internal T.I. 2019-0804641I7 - Professional Dues 8(1)(i)(i)

“recognized by statute” can include recognition in a statute’s supporting regulations (but not in by-laws)

To be eligible for an Active Membership in the “Society,” various requirements respecting educational requirements were specified. In addition, Regulations enacted in support of legislation in certain provinces imposed requirements respecting services to be provided by a member of the Society. ETA Sched V, Pt. VI, s. 18, generally exempted “a supply of a membership made by an organization membership in which is required to maintain a professional status recognized by statute.”

The Excise and GST/HST Rulings Directorate queried the view in 2014-0530691E5 , respecting language, similar to that quoted above, appearing in ITA s. 8(1)(i)(i), that:

a professional status would generally have to be acknowledged in the statute itself to satisfy the “recognized by statute” condition in subparagraph 8(1)(i)(i) … .

After stating that Montgomery:

clarified that the phrase “recognized by statute” should be afforded a broad interpretation, and that “recognized by statute” does not necessarily mean that a professional status was incorporated, created, or regulated by a particular statute

and noting that 2014-0530691E5 was somewhat inconsistent with 2012-0444181M4, the Income Tax Rulings Directorate concluded:

[W]e would agree with your views that for purposes of the meaning of the phrase “professional status recognized by statute” … applying a textual, contextual and purposive analysis, a “professional status” can be “recognized by a statute” for purposes of subparagraph 8(1)(i)(i) … even if it is only recognized in the supporting regulations of an act.

However … where a “professional status” is only acknowledged in an organization’s bylaws, the “professional status” would not likely be considered “recognized by statute” … .

Locations of other summaries		Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 18	recognition by statute can include recognition by regulation	150

21 June 2007 External T.I. 2005-0157861E5 F - Cotisation professionnelle

membership in a municipal employees’ association was not necessary for the maintenance of a professional status

In finding that annual dues paid by municipal employees and officers as members of the Corporation des officiers municipaux agrées du Québec ("COMAQ") are not deductible pursuant to s. 8(1)(i)(i), CRA stated:

Membership in the COMAQ is not a necessary condition for maintaining the professional status of an employee or manager, even if membership benefits the employee or manager in their duties.

2 August 2005 External T.I. 2005-0112871E5 F - Cotisation professionnelle

fees paid by municipal mangers to a professionals corporation formed under private member’s bill were non-deductible

The Municipal Officers' Corporation of Quebec ("COMAQ"), a professionals corporation incorporated under a private act, had over 550 members who were managers in over 250 municipalities and who were required to pay an annual fee to remain a member and enjoy the status of certified municipal officer. In finding that the fees were not deductible under s. 8(1)(i)(i), CRA stated:

IT-158R2,[para. 1(c) … states that professional status must be recognized by a Canadian, provincial or foreign statute. Similarly, paragraph 3 states that it is the employee's professional status (not the organization's) that must be recognized by statute…. [T]he facts described … do not support the conclusion that those conditions are satisfied.

27 October 2004 External T.I. 2004-0080901E5 F - Cotisation professionnelle-frais de traduction

costs of translating documents re the taxpayer’s foreign professional training did not qualify

Mr. A, who came to Canada to practise his profession as an employee, paid fees for the translation of his education program and degree documents in order to have his designation recognized in Canada by the professional College. CRA stated:

[C]osts incurred by a taxpayer to have documents relating to the taxpayer’s educational program and diplomas translated for the purpose of qualifying with a professional association are not covered by subparagraph 8(1)(i)(i) or any other provision in section 8.

11 September 1996 External T.I. 9622535 - ANNUAL PROFESSIONAL MEMBERSHIP DUES

A trainee enrolled as a member of the Association of British Columbia Professional Foresters is not entitled to the deduction because the trainee is not permitted to practise professional forestry.

The deduction also is not available for late payment penalties or for the fee payable upon becoming reinstated as a member.

1995 Institute of Chartered Accountants of Alberta Round Table, Q. 6 (C.T.O. "Professional Dues" No. 9511910)

In accordance with RC's policy of fairness, professional membership dues that are paid by an employer and included on the employee's T4 as a taxable benefit are deductible by the employee if they otherwise qualify under s. 8(1)(i).

23 June 1995 External T.I. 9500855 - PROFESSIONAL DUES

With respect to the situation where annual fees payable to the Barreau du Quebec are paid by the employer, RC stated that it "considers that an amount in respect of such dues paid by his or her employer in circumstances where the employer is required to include the payment in the employee's income as a taxable benefit is effectively an amount paid by the employee".

13 July 1992 T.I. 921266 (January - February 1993 Access Letter, p. 9, ¶C5-183)

The amount of professional membership dues deductible under s. 8(1)(i)(i) includes GST paid thereon.

22 January 1991 Memorandum (Tax Window, Prelim. No. 3, p. 20, ¶1082)

In the case where the payment of professional membership fees of an employee by his employer is a taxable benefit, the fees are deductible to the employee if the otherwise qualify under s. 8(1)(i).

Subparagraph 8(1)(i)(ii)

Commentary

S. 8(1)(i)(i) provides for the deduction from a taxpayer's income from an office or employment of office rent, or the salary of an assistant or substitute, the payment of which was required by the contract of employment.

Home mortgage payments do not qualify as rent (Thompson).

Some commissioned brokers or sales persons have been successful in deducting salaries paid to their spouses even though their contracts of employment did not explicitly contemplate that they would retain their spouses as assistants (Longtim, Schnurr, cf. Vickers, see also Aprile).

The requirement that the assistant's salary be paid by the taxpayer can be satisfied if the taxpayer's employer pays the salary and the taxpayer reimburses the employer for those amounts (Williams).

Cases

Blott v. The Queen, 2018 TCC 1 (Informal Procedure)

retaining an assistant was not a requirement of employer

The taxpayer, a securities dealer employee, claimed a deduction for salary to his wife of $12,000 per annum for her administrative support. In finding that the taxpayer had not satisfied the requirement that employing an assistant was required by his employer, C Miller J stated ()at paras. 17-18):

His course of action to have his wife assist was entirely self-driven, and not as a result of any implicit requirement in his agreement with WMC.

I combine this view with the fact that the T2200 was checked in the negative regarding the requirement to hire an assistant and find the requirement of section 8(10) of the Act has simply not been met.

Words and Phrases

required

Locations of other summaries		Wordcount
Tax Topics - General Concepts - Payment & Receipt	giving a spouse access to a joint account was not payment to her	160

The Queen v. Thompson, 89 DTC 5439, [1989] 2 CTC 226 (FCTD)

A salesman was not permitted to deduct a portion of his home mortgage payments, alleged to relate to his home office, as "rent". McNair quoted with approval (at p. 5443) a statement by Rip TCJ in Felton v. MNR, 89 DTC 233 (TCC) that the word "rent" contemplates "a payment by a lessee or tenant to a lessor or landlord who owns the office property in return fro the exclusive possession of the office, the property leased by the latter to the former."

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 67		234

Administrative Policy

28 March 2019 External T.I. 2019-0799241E5 F - Dépenses d'emploi (employé qui n'est pas à commission)

property taxes and insurance expenses of home office do not qualify

At the October 2018 APFF Roundtable (2018-0768871C6 F), CRA indicated that the home office expenses of an employee (other than a commission employee governed by s. 8(1)(f) rather than s. 8(1)(i)) may include “property taxes, and home insurance costs associated with maintaining the office.” CRA then issued this correction, stating: [TaxInterpretations translation]

Where a taxpayer claims a deduction under paragraph 8(1)(i), property taxes and home insurance premiums are not deductible. Those are not included in home office expenses for office rent for purposes of subparagraph 8(1)(i)(ii) of the Act. Similarly, they are not included in the cost of supplies that were consumed directly in performance of the duties of the office or employment for the purposes of subparagraph 8(1)(i)(iii).

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(13)	home office expenses generally cannot include property taxes or insurance	187

10 November 2006 External T.I. 2006-0174681E5 F - Salaire versé par un employé à un adjoint

position in IT-352R2, para. 1 consistent with Longtin

Mr. A pays salary to an assistant whom he hired to assist him in the performance of his employment duties as an advisor at a brokerage on commission. Although Mr. A was not required by his employer to hire an assistant, she was hired with its express permission.

CRA indicated that it considered the following statement in IT-352R2, para. 1 was consistent with Longtin:

“Subject to certification by the employer … subparagraphs 8(1)(i)(ii) and (iii) allow a taxpayer, in computing income for a taxation year from an office or employment, to deduct amounts paid in the year as expenses for office rent, supplies and salary to an assistant or substitute. These expenses are deductible provided the following requirements are met:

(a) the taxpayer is required by the contract of employment to pay for such office rent or salary, or to provide and pay for such supplies;

[...]

Ordinarily, (a) above necessitates that there be an express requirement within the terms of a written contract of employment. Nevertheless, such a requirement for the payment of office rent, supplies or salary to an assistant or substitute may exist where the taxpayer can establish that it was tacitly understood by both parties (the taxpayer and the employer) that such payment was to be made by the taxpayer and was, in fact, necessary under the circumstances to fulfill the duties of the employment.”

8 February 1994 Internal T.I. 9400657 - EMPLOYMENT EXPENSES

Although ordinarily the requirement in the contract of employment to provide a work space necessitates that there be an expressed requirement in the written contract of employment, it is RC's general position that this requirement may also be considered to have been satisfied where it is understood by the employer and the employee that the work space be provided by the employee.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(b) - Subparagraph 6(1)(b)(xi)		58
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(g)		4

Subparagraph 8(1)(i)(iii)

Administrative Policy

14 March 2013 External T.I. 2012-0472361E5 F - Fournitures/outils - guides de pêche

implicit requirement to provide “supplies” (e.g., potentially materials provided to clients) can be sufficient

Employed fishing outfitters and guides provide materials, such as salmon flies or filament to repair fishing lines, to clients, to ensure the success of the fishing trip. The collective agreement is silent on whether the employees must incur these expenses. The employees receive remuneration, regardless of whether the client is fishing, and they are reimbursed for equipment expenses up to specified limits. Is the cost of bait and filament to repair a fishing line deductible in the computation of their employment income? CRA responded:

[S]upplies, which may be deducted by virtue of subparagraph 8(1)(i)(iii), are consumed directly in the performance of the duties of the employment and cannot be reused thereafter for similar functions.

[The materials here] could constitute supplies. However, it is not clear that all of the other conditions of subparagraph 8(1)(i)(iii) have been met with respect to your employees, particularly the requirement that employees not be reimbursed for the cost of supplies they incur. …

In order to determine whether an expense incurred by an employee, which was not expressly provided for in an employment contract, is in fact an implicit requirement of an office or employment, the courts have considered whether the fact of failure to comply could result in termination of employment, poor evaluation of employee performance or other disciplinary action by the employer.

Words and Phrases

supplies

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(s)	materials provided to clients were not “tools"	195

11 July 1995 External T.I. 9508235 - WORK SPACE DEDUCTIBLE AS SUPPLIES

"Work space expenses which are deductible as 'supplies' under subparagraph 8(1)(i)(iii) of the Act consists of a reasonable proportion of expenses paid or the maintenance of the work space such as the cost of fuel, electricity, light bulbs, cleaning and material and minor repairs ... . [O]nly expenses (deductible as supplies) related to work space and not supplies consumed in the performance of employment duties are subject to subsection 8(13) rules."

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(h) - Subparagraph 8(1)(h)(iii)		46
Tax Topics - Income Tax Act - Section 8 - Subsection 8(13)		29

26 July 1994 External T.I. 9415455 - EMPLOYMENT BENEFITS - SPECIAL CLOTHING

The word "supplies" is limited to materials that are used up directly in the performance of the duties of employment, and does not include special clothing customarily worn by employees in the performance of their duties. In addition, there is no provision within s. 8(1)(i) that would permit a deduction in respect of personal grooming costs.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a)		30

9 February 1994 Internal T.I. 9335877 F - Clothing Allowance

The word "supplies" is limited to materials that are used up directly in the performance of the duties of employment, such as gasoline and oil used in the operation of power saws owned by employees in wood operations, dynamite used by miners, bandages and medicines used by salaried doctors and stationery items used by teachers. However, they do not include special clothing customarily worn or required to be worn by employees in the performance of their duties, and any types of tools which fall into the category of equipment. The cost of a knife used for shucking scallops is deductible provided that it has a relatively short life span and a small cost.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(b)		77

Subparagraph 8(1)(i)(iv)

Cases

Crowe v. Canada, 2003 DTC 5288, 2003 FCA 191

Dues paid by the taxpayer to the Alberta Provincial Judges' Association were not deductible given that "as ordinarily understood, the term 'public servants' does not include judges but approximates to 'civil servants' or 'government employees', not independent office holders" (p. 5291) and "given the labour relations context of subparagraph 8(1)(i)(iv), it would be incongruous to find in the same category, namely, 'public servants', two fundamentally different groups of workers: those who may bargain over terms and conditions of employment or work and those who are constitutionally precluded from such activities" (p. 5295).

Lucas v. The Queen, 87 DTC 5277, [1987] 2CTC 23 (FCTD)

Dues in order to be considered annual must be of a recurring kind, as opposed to initiation or entrance dues paid once and for all on becoming a member. An increase in the annual dues of the Alberta Teachers' Association in response to the financial drain from a teachers' strike in Calgary was deductible to the member in the face of the Crown's contention that the increase should be characterized as a special levy. Although this increase did not recur, it was capable of recurring.

Locations of other summaries		Wordcount
Tax Topics - Statutory Interpretation - Resolving Ambiguity		25

Administrative Policy

5 May 2017 External T.I. 2016-0681161E5 - Deductibility of annual membership dues

a trade union need not be certified

An Association collectively negotiates conditions of employment (e.g., salaries, benefits, hours of work) for its members with the Employer, but is not a certified labour organization, and management and certain non-management employees holding positions that require confidentiality will automatically become members of the Association when hired by the Employer. The Association proposes to have the Employer collect annual dues from all Members on its behalf through payroll deduction and use the dues solely to defray the Association’s ordinary operating expenses and for no other purpose. Are such dues deductible by the employees under s. 8(1)(i)(iv)?

Before concluding that the Association would likely be considered a trade union, so that annual dues paid to maintain membership in the Association likely would be deductible, CRA stated that under its established position:

[A]n association does not have to be certified trade union in order to be considered a trade union for purposes of subparagraph 8(1)(i)(iv)… . Generally, an association whose primary purpose is to collectively negotiate with an employer to further the working conditions of its members is considered to be a trade union for purposes of subparagraph 8(1)(i)(iv).

Words and Phrases

trade union

1 April 2014 External T.I. 2013-0513781E5 - Trade union dues

non-certified union

An employee association (the" Association") is a company-wide organization that collectively negotiates employment agreements covering compensation, benefits, and occupational health and safety but is not certified by Human Resources and Skills Development Canada as a labour organization. All non-management employees are required to be members and the employer collects Association dues bi-weekly via payroll deduction. Before concluding that the Association likely would be considered a trade union for purposes of s. 8(1)(i)(iv), CRA stated:

[A]n association need not be certified as a trade union to be considered a trade union for [such] purposes…[and] an association which negotiates collectively with an employer for improvements in the members' working conditions is generally considered to be a trade union for [such] purposes… .

Paragraph 8(1)(j) - Motor vehicle and aircraft costs

Administrative Policy

10 September 1990 T.I. (Tax Window, Prelim. No. 1, p. 17, ¶1009)

Where an employee begins a drive between home and the employer's place of business and during the course of that drive is contacted by a cellular phone and diverted to another place to perform an employment activity, the portion of the drive from the point of the diversion will be considered employment related and the portion of the drive up to that point will be considered to be personal in nature.

Paragraph 8(1)(m) - Employee’s registered pension plan contributions

Cases

The Queen v. Kurisko, 88 DTC 6434, [1988] 2 CTC 254 (FCTD), aff'd 90 DTC 6376 (FCA)

6% of a federally-appointed judge's salary was required, by virtue of s. 29.1 of the Judges Act, to be withheld and contributed to the Consolidated Revenue Fund, which was also deemed by that provision to be contributed under a registered pension plan for purposes of the Income Tax Act. It was held that the amount so deemed to be a contribution was also subject to the $3500 limit in s. 8(1)(m). Although this had the effect of subjecting the amount of the contribution over the limit to double taxation (because the pension income would be fully taxable), the independence of the judiciary was not undermined.

Locations of other summaries		Wordcount
Tax Topics - Other Legislation/Constitution - Charter (Constitution Act, 1982) - Subsection 15(1)		52
Tax Topics - Income Tax Act - Section 5 - Subsection 5(1)		79

The Queen v. Hoffman, 85 DTC 5508, [1985] 2 CTC 347 (FCTD)

U.S. social security contributions made by a U.S. citizen who was a Canadian resident employee were not deductible under s. 8(1)(l) or (m).

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 126 - Subsection 126(7) - Non-Business-Income Tax		49
Tax Topics - Income Tax Act - Section 5 - Subsection 5(1)		67
Tax Topics - Income Tax Act - Section 56 - Subsection 56(2)		124
Tax Topics - Statutory Interpretation - Interpretation Bulletins, etc.		19

Administrative Policy

13 June 1991 T.I. (Tax Window, No. 4, p. 30, ¶1305)

If an employer's excess contributions to a health and welfare trust are transferred to a pension plan, the transferred amount is neither an employer contribution nor an employee contribution, and is not deductible by the employee under s. 8(1)(m).

19 April 1990 T.I. (September 1990 Access Letter, ¶1407)

Discussion of situation where individual receives tax-free long-term disability payments from an insurance company and as part of the same arrangement the insurance company makes contributions to a registered pension plan on behalf of the employee.

Paragraph 8(1)(m.2) - Employee RCA contributions

Administrative Policy

21 February 2018 External T.I. 2017-0702061E5 - RCA contributions and taxable inc earned in Canada

no deduction permitted where plan provided only for a lump sum payment or where it was excluded from SDA treatment by para. (j) (re athletes)

A Canadian professional sports team has established an RCA for the benefit of an athlete employee under which the athlete and the team are each required to each annually contribute $400,000 to the RCA, would the athlete be entitled to a deduction under s. 8(1)(m.2) for his contributions to the RCA? In finding that no such deduction was permitted, CRA stated:

Generally, a plan will be considered to be a pension plan where contributions have been made to the plan by or on behalf of an employer or former employer of an employee in consideration for services rendered by the employee and the contributions are used to provide an annuity or other periodic payment on or after the employee's retirement.

… [A] plan will not be a pension plan where the only payment provided for under the terms of the plan is a single lump sum payable on retirement or loss of employment. … [A] plan that is excluded from being a salary deferral arrangement (“SDA”) by virtue of the special exception for professional athletes in paragraph (j) of the SDA definition in subsection 248(1) [also] will not be a pension plan, regardless of the form of benefits provided.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 115 - Subsection 115(1) - Paragraph 115(1)(a) - Subparagraph 115(1)(a)(i)	s. 6(1)(a)(ii) exclusion for employer RCA contributions was effectively allocated between Cdn and US employment income of an athlete	241
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) - Subparagraph 6(1)(a)(ii)	s. 6(1)(a)(i) exclusion applied first before s. 4 allocation of income between Canada and U.S.	151

Articles

"Employee Contributions to Unregistered Pension Plans Are Now Permitted", Taxation of Executive Compensation and Retirement, October 1990, p. 342.

Paragraph 8(1)(n) - Salary reimbursement

Administrative Policy

19 December 2016 External T.I. 2016-0643191E5 F - Deferred Salary Leave Plan (DSLP)

deduction where “repayment” of advances made during employee leave

In the course of a comprehensive discussion of the deferred salary leave plan (“DSLP”) rules in Reg. 6801(a), CRA provided an example of an arrangement in which, during an employee leave, the employee first receives amounts whose recognition was deferred under the DSLP rules, and then receives advances of salary or wages which are to be earned after returning – with CRA stating that both types of amounts “must be included in the employee's income in the leave year under subsections 6(3) and 5(1).” After noting that such an arrangement implies a “repayment period” in which the advances are repaid out of reduced pay cheques following the return to work, CRA stated:

Paragraph 6801(a) does not apply during the repayment period, as there is no deferred amount or an EBP [employee benefit plan] within the meaning of subsection 248(1) of the Act during that period. Subsections 6(3) and 5(1) of the Act require that the total salary or wages earned by the employee during that period (the gross amounts, before deduction of the repayment amounts) be included in income. However, paragraph 8(1)(n) of the Act applies so that the employee can deduct from his or her employment income the amounts deducted by the employer as repayment of the employee advances received by the employee during the leave.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 5 - Subsection 5(1)	salary advance arrangement results in recognition when advances made rather than when earned	125
Tax Topics - Income Tax Regulations - Regulation 6801 - Paragraph 6801(a)	comprehensive discussion, including: seasonal workers cannot participate; and DSLP can be married with a salary advance arrangement	462

26 April 2016 Internal T.I. 2015-0623571I7 - one-time salary transition payment

deduction for repayment of transitional advance

CRA considered that an advance to an employee is current s. 5 income to him or her even if the advance is required to be repaid if the future services are not performed. Accordingly, a “transitional payment” made to employees, as a result to switching the payroll system to an arrears system, would be currently taxable even if the employees were required to repay any overpayment on termination of employment.

Respecting the deduction under s. 8(1)(n) for a repayment, CRA stated:

[A]n employee may claim a deduction from employment income for any repayment of all or part of a salary advance that was previously included in the employee’s income and that was for a period which he or she did not perform the duties of employment. This deduction is available in the tax year in which the repayment is made and cannot exceed the advance that was previously included in the employee’s income… .

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 5 - Subsection 5(1)	advance to employee is current s. 5 income	239
Tax Topics - Income Tax Act - Section 80.4 - Subsection 80.4(1)	employee advance not a “loan”	123

16 March 2015 External T.I. 2014-0524371E5 F - Assessment beyond normal reassessment period

no reversal of taxable benefits if repaid in subsequent year

An individual after being assessed for taxable benefits for certain years was subsequently required by his employer to reimburse the employer for the benefit amounts. Could s. 152(4.2) be applied to reverse the taxable benefit amounts in the years of assessment?

CRA noted that, in contrast to 2011-0394301I7, where "an error had been committed and there was no basis for including the amount in the computation of the taxpayer's income," here "the benefits were rightly considered taxable in the years of their grant" (TaxInterpretations translation).

Even if s. 152(4.2) applied, a deduction would not be permitted as "only the reimbursements of remuneration specifically contemplated by the terms of paragraph 8(1)(n) are a permissible deduction in the computation of the income of a taxpayer derived from an office or employment, and that paragraph does not contemplate the type of reimbursement which you envisage."

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 152 - Subsection 152(4.2)	s. 152(4.2) not applicable if amount was not erroneous at time of return filing	106

S1-F2-C3 - Scholarships, Research Grants and Other Education Assistance

After noting that education-related expenses paid by an employer are considered employment income (at paras. 3.11-3.12), CRA stated:

3.13 Where a student is required to repay an employer for education expenses the employer previously incurred on their behalf, the student will be entitled to deduct the repayment under paragraph 8(1)(n) where the repayment is made by or on behalf of the student in the year pursuant to an arrangement requiring the reimbursement of any amounts received for a period throughout which the student did not perform the duties of the office or employment. However, the deduction under paragraph 8(1)(n) will be limited to the extent that:

the amounts received were included in computing the student's employment income; and

the total reimbursements do not exceed the total of the amounts received by the student for the period throughout which the student did not perform the employment duties.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(n)		27
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(n)		238
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(n)		137
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(n)		132
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(o)		51
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(o)		66
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(o)		119
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(o)		73
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(o)		98
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(r)		166

13 June 2012 Internal T.I. 2012-0448961I7 F - Paiements en trop faits par un employeur

salary mistakenly paid after expiry of sick leave period and then repaid, treated as clerical error rather than s. 8(1)(n) adjustment

An employee was on extended sick leave but nonetheless received remuneration from the payroll service, which was not informed of the leave. On the employee's return to employment a number of years later, the error was discovered, and it was agreed that the overpayments would be repaid over a period covering two calendar years through deduction from the employee's post-return remuneration. In applying RC4120 (below), the employer treated this as a situation of overpayment of remuneration for duties not performed, rather than a situation of clerical or administrative error. CRA stated (TaxInterpretations translation):

...[T]he overpayments were in this case made by reason of an administrative or clerical error. In such a case, the amounts received by the employee are not considered as salary as the employee had no right to them.

As indicated in the section of Guide RC4120 entitled "Clerical or administrative errors," the employer should issue a revised T4 form for the taxation year in question ... excluding the amounts of the excess payments. A copy of the revised slip must be sent to the ...CRA ... as well as the employee, informing the employee that the employee may request the CRA to reassess the employee’s XXXXXXXXXX taxation year. However, no change can be made to the T4 slips for the XXXXXXXXXX taxation years to reduce employment income for the reimbursed amounts. ...

Following the issuance by the payroll service of a revised T4 slip for the XXXXXXXXXX taxation year, the employee can request the CRA to make an adjustment to the statement of income and benefits for the XXXXXXXXXX taxation year in order to refund, if applicable, the excess tax paid in that year.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 80.4 - Subsection 80.4(1)	grant of extended period for employee to repay overpayment was not a s. 80.4 loan	101

4 November 2010 Internal T.I. 2010-0358441I7 F - Indien, avance de salaire

salary repayment could generate non-capital loss

An Indian living on a reserve and performing a portion of his duties of employment on a reserve takes an unpaid leave of absence that is funded by a salary advance, that is required to be repaid over a number of years. After finding that the advance was taxable when received, CRA went on to state:

Paragraph 8(1)(n) clarifies the tax treatment of a salary reimbursement to an employer. Paragraph 8(1)(n) generally permits a deduction in computing income from an office or employment to the extent that the amount to be repaid was previously included in computing income from an office or employment. If the deduction in a taxation year is greater than the amount of employment income for the year, then there will be a loss arising from employment, which could be considered a non-capital loss as defined in subsection 111(8).

Locations of other summaries		Wordcount
Tax Topics - Other Legislation/Constitution - Federal - Indian Act - Section 87	salary advance cannot be exempt	151
Tax Topics - Income Tax Act - Section 6 - Subsection 6(3) - Paragraph 6(3)(a)	salary advance is taxable under s. 6(3)	75
Tax Topics - Income Tax Act - Section 111 - Subsection 111(8) - Non-Capital Loss	s. 8(1)(n) deduction could generate NCL	34

15 March 2010 Internal T.I. 2009-0352731I7 F - Remboursement de rémunération

deduction for repayment of amounts received during deferred salary leave period following failure to return to work

Following her leave under a deferred salary leave plan, the employee began an unpaid leave of absence in order to take another job. Is she entitled to a s. 8(1)(n) deduction for the repayment of the amount owing, assuming that she does not intend to return to her first job at the end of the unpaid leave of absence. The Directorate responded:

[I]t appears that the employee received, throughout the period of her leave, an amount equal to the amount of deferred pay during the deferred salary period preceding her leave, as well as an amount of salary paid in advance. Therefore …the employee was required to include in her employment income … under subsections 6(3) and 5(1), all amounts [so] received … .

…[I]f the employee reimburses in 2010 the balance owing … in respect of the deferred salary leave plan, she could take the deduction under paragraph 8(1)(n) in computing her income for 2010.

… [S]uch a deduction would be limited to the amount advanced and paid during the period of deferred salary leave, which had already been included in her income.

RC4120 "Employers' Guide Filing the T4 Slip and Summary"

29 May 2008 External T.I. 2007-0262591E5 F - Remboursement de sommes versées par erreur

s. 8(1)(n) could extend to reimbursements of disability benefits to an employer-arranged insurer

After disability payments to the taxpayer, under the policy taken out by the employer with an insurer, were suspended, then retroactively restored. However, the insurer discovered that, in the interim, the taxpayer had started receiving a pension under the Quebec Pension plan and also had been granted a retroactive pension by the employer – so that it claimed reimbursements of the disability payments it had made for the same periods. CRA stated:

[T]he word "arrangement" is broad enough to include a situation where a taxpayer must reimburse disability benefits to an insurer.

Thus, as long as all the conditions of paragraph 8(1)(n) are satisfied, we are of the view that the taxpayer may deduct the disability benefits reimbursed by the taxpayer to the insurer.

Words and Phrases

arrangement

17 July 2007 External T.I. 2007-0237811E5 F - Régime à traitement différé

s. 8(1)(n) for required repayment of deferred salary under a deferred salary leave plan

An employee takes a leave of six months under a deferred salary leave plan, but then resigns after returning to work, and is contractually required to repay the deferred salary. CRA stated:

Since it is the total wages earned by your employee (and not just the amount received) during the repayment period that will be taxed by virtue of subsections 6(3) and 5(1), we are of the view that, if the employee repays the salary advances during the repayment period, he will be able to take the deduction under paragraph 8(1)(n) in computing his income for the year in which the repayment was made. Such a deduction is limited to the amount advanced and paid during the leave period that was included in income. Paragraph 8(1)(n) would apply even after the employee resigns if the employee is still repaying amounts advanced by the employer. If the deduction in a taxation year exceeds the amount of employment income for the year, then there will be an employment loss, which will be considered a non-capital loss as defined in subsection 111(8).

Locations of other summaries		Wordcount
Tax Topics - Income Tax Regulations - Regulation 6801 - Paragraph 6801(a) - Subparagraph 6801(a)(v)	requirement to return to work for the period of leave	115

19 October 2004 Internal T.I. 2004-0085711I7 F - Dommages suite à une entente hors cour

required repayment of excess amount of wage loss insurance previously received could give rise to s. 8(1)(n) deduction

A settlement agreement signed by the taxpayer in settlement of her grievances launched with the assistance of her union stated that she resigned from her position, that the union and the taxpayer withdrew all the grievances, and that the employer agreed to pay her a lump sum and released the claim for a portion of the excess amount of wage loss insurance that she had received. Regarding the portion of the excess wage loss insurance that she was required to repay, the Directorate stated:

It should be noted that the $XXXXXXXXXX of wage-loss insurance could give rise to a deduction from the taxpayer's income from office and employment as a reimbursement of remuneration pursuant to paragraph 8(1)(n) if the amount had otherwise been previously included in the taxpayer's income from office and employment.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Retiring Allowance	amount received in settlement of grievances and on agreeing to retire was a retiring allowance in the absence of evidence that it was for harassment or unpaid wages	172

Employee did not perform duties

When an employee repays you, in the same or a later year, for salary or wages received when the employee did not perform his or her duties, the repayment is considered to be a repayment of salary and wages. Examples include:

an employee who is on a leave of absence and receives salary and disability payments for the same period of time;
an employee who was advanced vacation leave credits, but quit working for you before actually earning the credits; or
an employee who was paid a signing bonus but did not work for the time agreed to in the employment contract.

Your employee should repay you the gross amount of the salary overpayment. You cannot adjust the employee's T4 slip or the payroll records to reduce the total employment income or source deductions by the amount of the repayment.

Clerical or administrative errors

We will not consider an amount to be salary, wages, or an advance in the year the employee received it if the employee is overpaid because of an administration or clerical error (mistake). If you discover the error after issuing a T4 slip for the employee, you must issue an amended T4 slip for that year to exclude this amount.

However, the amount should be included on a T4 slip in the following situations:

The employee says he or she will repay the amount and does not. Include the amount in employment income in the year the employee agrees to repay the amount but does not.
The employee says he or she will not repay the amount. Include the amount in employment income in the year of the overpayment.
The employer forgoes his or her right to the amount. Include the amount in employment income in the year of forgiveness.
There was knowledge or collusion and the employee does not repay the amount. Include the amount in employment income in the year of the overpayment.

Articles

Christina Medland, Jennifer Sandford, "Tax Treatment of Share-Based Compensation", Taxation of Executive Compensation and Retirement, September 2005, p. 583.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Salary Deferral Arrangement		0
Tax Topics - Income Tax Act - Section 7 - Subsection 7(1) - Paragraph 7(1)(a)		0

Paragraph 8(1)(o)

Administrative Policy

23 April 2021 External T.I. 2020-0872371E5 - Sabbatical leave plan - Application of SDA rules

s. 8(1)(o) deduction when employer notional contributions to off-side sabbatical leave plan

After finding that a sabbatical leave plan did not satisfy the requirements of Reg. 6801(a) as a deferred salary leave plan (for multiple reasons including the length and timing of the sabbatical leave and provision for notional employer contributions to match the salary amounts that the participating employees elected to defer), CRA went on to note that the amount of salary that an employee deferred in a particular taxation year together with the amount of any matching notional employer contribution, would constitute a “deferred amount,” to be included in computing the employee’s income for that year pursuant to ss. 6(11) and 6(1)(a), with the receiving a s. 20(1)(oo) deduction for the same year as the s. 6(1)(a) inclusion.

On the forfeiture of all notional employer contributions on the early termination of participation in the Plan, the amount of the employer contributions (previously included in the employee's income) would be deductible by the employee pursuant to s. 8(1)(o).

Locations of other summaries		Wordcount
Tax Topics - Income Tax Regulations - Regulation 6801 - Paragraph 6801(a)	offside sabbatical leave plan given length and timing of the sabbatical leave and the notional employer contributions	236
Tax Topics - Income Tax Act - Section 6 - Subsection 6(11)	consequences of a sabbatical leave plan being offside the SDA rules	275
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(n.2)	s. 12(1)(n.2) inclusion to employer when employee forfeits entitlement to employer notional contribution to off-side sabbatical leave plan (which had generated s. 20(1)(oo) deduction)	179

Paragraph 8(1)(p) - Musical instrument costs

Administrative Policy

S4-F14-C1 - Artists and Writers

1.49 Paragraph 8(1)(p) permits a deduction for musical instrument costs. It is available to a taxpayer who is:

employed in the year as a musician, and

required, as a term of the employment, to provide a musical instrument for a period in the year.

Two components of deduction

1.50 The deduction available under paragraph 8(1)(p) is the sum of the following two amounts, which are described in subparagraphs 8(1)(p)(i) and (ii):

Under subparagraph 8(1)(p)(i), amounts paid before the end of the year for the maintenance, rental, and insurance of the instrument in respect of the period described in ¶1.49. This deduction is not permitted if the amounts have already been deducted under another provision of the Act.

Under subparagraph 8(1)(p)(ii), where the instrument is owned by the musician, the taxpayer may claim the applicable CCA (Class 8).

No resulting loss permitted

1.51 The total deduction for the year under paragraph 8(1)(p) for the maintenance, rental, insurance, and CCA for the instrument cannot exceed the taxpayer's income from the employment as a musician for the year, as determined prior to any deduction under this provision. Consequently, the deduction under paragraph 8(1)(p) cannot create or increase a loss from employment.

Allocation where both employed and self-employed

1.52 Where a musician is both self-employed and an employee in the year, CCA for the instrument may be claimed as a deduction in computing income from business (in self-employment) and under paragraph 8(1)(p) in computing income from employment. In such a situation, however, the total combined CCA claimed for the year in respect of the instrument, cannot exceed the undepreciated capital cost of the instrument as allowed for the year for property in Class 8 of Schedule II of the Regulations. In addition, the amounts of CCA, maintenance, rental, and insurance expenses deductible for the instrument in computing the musician's income from employment are limited to the portion of those expenses applicable to earning such employment income as allocated in the manner discussed in ¶1.40.

Change of use rules

1.53 The purpose of a musician’s musical instrument may change, either from gaining or producing income to personal use, or from personal use to gaining or producing income. When a musical instrument’s use changes, either partially or entirely, the change-in-use rules in paragraphs 13(7)(a), (b), and (c) will apply.

1.54 When there is a change in use, a musician may be considered to have disposed of and reacquired all or part of the instrument at its fair market value. Paragraphs 13(7)(a), (b), and (c) establish rules for determining the proceeds of disposition and the capital cost of property deemed to have been reacquired.

1.55 Capital gains or recapture of CCA may arise on the disposition of a musical instrument. However, typically no loss may be claimed when an instrument or other property is converted from being used for personal purposes to income producing purposes due to paragraph 40(2)(g). Additionally, no terminal loss may be claimed on property used to earn income from employment.

Locations of other summaries		Wordcount
Tax Topics - General Concepts - Substance		93
Tax Topics - Income Tax Act - Section 5 - Subsection 5(1)		469
Tax Topics - Income Tax Act - Section 3 - Paragraph 3(a) - Business Source/Reasonable Expectation of Profit		582
Tax Topics - Income Tax Act - Section 9 - Nature of Income		298
Tax Topics - Income Tax Act - Section 10 - Subsection 10(6)		272
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose		599
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(q)		1067
Tax Topics - Income Tax Act - Section 56 - Subsection 56(3) - Paragraph 56(3)(b)		527
Tax Topics - Income Tax Regulations - Regulation 200 - Subsection 200(2)		103
Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Commodities, and commodities futures and derivatives		122
Tax Topics - Income Tax Act - Section 118.1 - Subsection 118.1(1) - Total Cultural Gifts		334
Tax Topics - Income Tax Act - Section 118.1 - Subsection 118.1(7.1)		724

Paragraph 8(1)(q) - Artists’ employment expenses

Administrative Policy

S4-F14-C1 - Artists and Writers

Example 5 (showing that an employed musician may be better off deducting his expenses of travelling to performances under s. 8(1)(h) rather than (q))

1.61 … Claude is a musician who earned employment income of $22,500 during the tax year as a performer of musical works. This is a qualifying artistic activity described in subparagraph 8(1)(q)(iii) and discussed in ¶1.57.

During the year, Claude paid $700 for advertising and $1,300 for travelling to earn this income. Additionally, he is required to use his own musical instrument in the performance of his employment duties and has calculated that his maximum CCA deduction for the year in respect of his instrument is $350. He has no subparagraph 8(1)(p)(i) instrument costs and no paragraph 8(1)(j) motor vehicle interest expense or CCA amount.

Claude’s travel expenses meet the requirements of paragraph 8(1)(h). Since the travel expenses were also incurred to earn income from a qualifying artistic activity, they may be deducted under paragraph 8(1)(h) or 8(1)(q).

Question: How much can Claude deduct in the year?

Discussion: The amount deductible for the year by Claude is calculated as the total of:

Eligible artists’ employment expenses under paragraph 8(1)(q)

Travel expenses under either paragraph 8(1)(h) or paragraph 8(1)(q)

CCA in respect of his instrument under paragraph 8(1)(p)

Scenario A: Travel expenses are deducted under 8(1)(h)

(i) Calculation of Claude’s 8(1)(q) annual limit for artists’ employment expenses under Scenario A

Lesser of A or B:
A = 1,000, and
B = 4,500 (20% of $22,500);

$1,000

Minus C: amounts deducted in the year under paragraphs 8(1)(j) or (p)

$350

Claude’s annual 8(1)(q) limit

$650

(ii) Calculation of total allowable expenses under Scenario A

Advertising expenses deductible under paragraph 8(1)(q) (total eligible expenses paid were $700, but the deduction cannot exceed the limit of $650)

$650

Add: travel expenses deductible under paragraph 8(1)(h)

$1,300

Add: CCA deductible under paragraph 8(1)(p)

$350

Total amount deductible in the current year

$2,300

Claude can deduct $2,300 against his employment income. Additionally, Claude has $50 of advertising expenses (the $700 he paid minus the $650 he is allowed to deduct in the current year) that he can carry forward to deduct in a future year against a qualifying artistic activity under paragraph 8(1)(q).

Scenario B: Travel expenses are deducted under 8(1)(q) as eligible artists’ employment expenses

Since the travel expenses of $1,300 were paid to earn employment income from a qualifying artistic activity, Claude could choose to include them in his eligible artists' employment expenses instead of deducting them under paragraph 8(1)(h).

(i) Calculation of Claude’s 8(1)(q) annual limit for artists’ employment expenses under Scenario B

Lesser of A or B:
A = 1,000, and
B = 4,500 (20% of $22,500);

$1,000

Minus C: amounts deducted in the year under paragraphs 8(1)(j) or (p)

$350

Claude’s annual 8(1)(q) limit

$650

(ii) Calculation of total allowable expenses under Scenario B

Advertising and travel expenses deductible under paragraph 8(1)(q) (the eligible expenses paid are $2,000 ($700 + $1,300), but the deduction cannot exceed the limit of $650)

$650

Add: CCA deductible under paragraph 8(1)(p)

$350

Total amount deductible in the current year

$1,000

The amount of Claude’s eligible artists’ employment expenses under paragraph 8(1)(q) in Scenario B is $2,000 instead of $700 as in Scenario A. However, the amount that he can deduct for the year under paragraph 8(1)(q) is still only $650 due to his annual limit for the year.

In addition, because the $1,300 of travel expenses are deductible in the current year under paragraph 8(1)(h), these expenses cannot be carried forward to deduct in a future year against a qualifying artistic activity under paragraph 8(1)(q). This is the case even though the travel expenses of $1,300 were not actually deducted under paragraph 8(1)(h) in the current year. As a result, the amount of artists' employment expenses that can be carried forward to deduct in a future year is still $50 ($2,000 eligible – $650 deductible under paragraph 8(1)(q) – $1,300 deductible under paragraph 8(1)(h)).

Conclusion:

In these circumstances, it would be to Claude’s advantage to deduct the travel expenses of $1,300 under paragraph 8(1)(h) instead of under 8(1)(q). By doing so, the total amount he can deduct in the current year is $2,300 (Scenario A) instead of $1,000 (Scenario B).

Locations of other summaries		Wordcount
Tax Topics - General Concepts - Substance		93
Tax Topics - Income Tax Act - Section 5 - Subsection 5(1)		469
Tax Topics - Income Tax Act - Section 3 - Paragraph 3(a) - Business Source/Reasonable Expectation of Profit		582
Tax Topics - Income Tax Act - Section 9 - Nature of Income		298
Tax Topics - Income Tax Act - Section 10 - Subsection 10(6)		272
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose		599
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(p)		573
Tax Topics - Income Tax Act - Section 56 - Subsection 56(3) - Paragraph 56(3)(b)		527
Tax Topics - Income Tax Regulations - Regulation 200 - Subsection 200(2)		103
Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Commodities, and commodities futures and derivatives		122
Tax Topics - Income Tax Act - Section 118.1 - Subsection 118.1(1) - Total Cultural Gifts		334
Tax Topics - Income Tax Act - Section 118.1 - Subsection 118.1(7.1)		724

20 August 1992 T.I. 922074 (April 1993 Access Letter, p. 131, ¶C5-191; Tax Window, No. 23, p. 21, ¶2158)

Film editors, film directors, sound editors, directors of photography, art directors and costume directors would not qualify unless they belong to a professional artists' association certified by the Department of Communications.

Paragraph 8(1)(s)

Administrative Policy

26 May 2023 External T.I. 2023-0962521E5 - Employment Expenses of a Pilot

aviation headset is not a tool

Was a pilot entitled to deduct from such employee’s employment income the cost of an aviation headset (which was worn so as to prevent hearing loss and facilitate communications with Air Traffic Control) that such individual was required to purchase? CRA stated:

Aviation headsets would not be considered tools. … IT-422, [para. 2] … provides that in order for an asset to be a tool, it must be designed to create a physical change in something or be used as an instrument of measurement or manipulation. … In addition, paragraph 8(6.1)(d) of the Act specifically excludes electronic communication devices as eligible tools. Therefore, the cost of an aviation headset would not be deductible under paragraph 8(1)(s), or any other provision … .

Words and Phrases

tool

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(g)	s. 8(1)(g) deduction not available to pilot who returns to home city at the end of the day	134
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(h)	ss. 8(1)(h), (4) and (10) requirements could be met for meal expenses of pilot	87
Tax Topics - Income Tax Act - Section 8 - Subsection 8(6.1) - Paragraph 8(6.1)(d)	aviation headsets were electronic communication devices	109
Tax Topics - Income Tax Act - Section 8 - Subsection 8(4)	pilot potentially could deduct meal expenses pursuant to s. 8(1)(h) in connection with daily flying from and to the home city, provided that 12-hour requirement met	76

14 March 2013 External T.I. 2012-0472361E5 F - Fournitures/outils - guides de pêche

materials provided to clients were not “tools"

Employed fishing outfitters and guides provide materials, such as salmon flies or filament to repair fishing lines, to clients, to ensure the success of the fishing trip. The collective agreement is silent on whether the employees must incur these expenses. The employees receive remuneration, regardless of whether the client is fishing, and they are reimbursed for equipment expenses up to specified limits. After discussion the potential deduction under s. 8(1)(i)(iii) (as to which the materials might qualify as “supplies”), CRA stated:

Since there is no definition of the term "tradesperson" in the Act, this term should be interpreted in its ordinary meaning and it is our view that fishing guides could be considered as tradespeople.

… [I]t appears that the property described in your letter is not tools. [Per IT-422, para. 2] in order for an asset to be a tool it must be designed to create a physical change in something or to be used as an instrument of measurement or manipulation. Examples are hammers, saws, squares, screwdrivers and hand-held power tools. Therefore, no amount could be deductible by fishing guides by virtue of paragraph 8(1)(s).

Words and Phrases

tradesperson tool

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(i) - Subparagraph 8(1)(i)(iii)	implicit requirement to provide “supplies” (e.g., potentially materials provided to clients) can be sufficient	231

Subsection 8(2) - General limitation

Administrative Policy

S3-F4-C1 - General Discussion of Capital Cost Allowance

No terminal loss

1.101 A terminal loss cannot be claimed in the case of depreciable property for which CCA was claimed in computing income from an office or employment (see paragraphs 8(1)(j) motor vehicle and aircraft costs and 8(1)(p) musical instrument costs). This is because subsection 8(2) restricts the deductions that can be claimed in computing income from an office or employment to those permitted by section 8… .

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Improvements v. Repairs or Running Expense		556
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A		791
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Depreciable Property		324
Tax Topics - Income Tax Act - Section 16.1 - Subsection 16.1(1)		275
Tax Topics - Income Tax Act - Section 13 - Subsection 13(28)		254
Tax Topics - Income Tax Act - Section 13 - Subsection 13(27)		222
Tax Topics - Income Tax Act - Section 13 - Subsection 13(29)		155
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(2)		212
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(2.2)		351
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(3)		70
Tax Topics - Income Tax Act - Section 18 - Subsection 18(3.1)		166
Tax Topics - Income Tax Act - Section 13 - Subsection 13(7.5)		207
Tax Topics - Income Tax Act - Section 261 - Subsection 261(2)		65
Tax Topics - Income Tax Act - Section 128.1 - Subsection 128.1(1) - Paragraph 128.1(1)(b)		230
Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(1) - Paragraph 1102(1)(c)		170
Tax Topics - Income Tax Act - Section 13 - Subsection 13(7) - Paragraph 13(7)(e)		65
Tax Topics - Income Tax Act - Section 43 - Subsection 43(1)		152
Tax Topics - Income Tax Act - Section 68		197
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21.1) - Paragraph 13(21.1)(a)		75
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21.1) - Paragraph 13(21.1)(b)		212
Tax Topics - Income Tax Act - Section 13 - Subsection 13(1)		431
Tax Topics - Income Tax Act - Section 20 - Subsection 20(16.1)		152
Tax Topics - Income Tax Act - Section 13 - Subsection 13(9)		229
Tax Topics - Income Tax Act - Section 152 - Subsection 152(4)		321
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 8		237
Tax Topics - Income Tax Act - Section 13 - Subsection 13(5)		317
Tax Topics - Income Tax Act - Section 13 - Subsection 13(6)		221

24 June 2003 External T.I. 2002-0176475 F - DOMMAGES-INTERETS PROFESSIONEL

personal liability for damages in excess of liability coverage not deductible given s. 8(2)

Also released under document number 2002-01764750.

A professional incurred liability in his capacity of employee of his professional corporation that is in excess of his liability coverage. After noting that “subsection 8(5) … provides that professional or malpractice liability insurance that is necessary to maintain a professional status recognized by statute is deductible in computing employment income,” CCRA went on to find that the liabilities here were not deductible in computing the professional’s employment income, stating:

While you are otherwise of the view that the payment of damages incurred by Professional is tied to the purchase of his personal insurance and that the Professional cannot practise his profession through the corporation without incurring professional liability, we are of the view that subsection 8(2) limits the amounts that a taxpayer may claim in computing employment income if they are not specifically provided for in section 8.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(5) - Paragraph 8(5)(b)	professional liability insurance premiums deductible under s. 8(5)(b)	68

17 August 1992 T.I. (Tax Window, No. 23, p. 20, ¶2137)

An employee may not deduct home telephone expenses even where she is required to be available at home to respond to calls during off-duty hours.

18 October 1990 T.I. (Tax Window, Prelim. No. 1, p. 16, ¶1019)

The exclusion in s. 6(1)(a) will not apply to employer reimbursements of payments by an employee for counselling services in respect of his physical or mental health or that of a family member, and no deduction under s. 8 will be available to him.

79 C.R. - Q.39

Since the compensation of an individual executor is income from an office, he is only entitled to expenses specifically allowed in the Act.

Subsection 8(4) - Meals

Cases

Healy v. The Queen, 79 DTC 5060, [1979] CTC 44 (FCA)

In 1973 the appellant was required to work approximately 2/3 of his time at two race tracks located in Metropolitan Toronto, and 1/3 of his time at a race track in Fort Erie. The purpose of s. 8(4) "is to first find the municipality where an employee usually reports for work and then to find whether or not he is entitled to meal expense deduction for having, in the course of his employment, to be away from that municipality for more than twelve hours ... [I]t matters not whether there is only one or there are several establishments in the 'base' municipality". Since the appellant commonly and usually, or "ordinarily", worked at the two Toronto race tracks, the deduction was available to him.

Locations of other summaries		Wordcount
Tax Topics - Statutory Interpretation - Interpretation Act - Subsection 33(2)		33

Administrative Policy

26 May 2023 External T.I. 2023-0962521E5 - Employment Expenses of a Pilot

pilot potentially could deduct meal expenses pursuant to s. 8(1)(h) in connection with daily flying from and to the home city, provided that 12-hour requirement met

A pilot incurred meal expenses while away from the municipality of the employer establishment where the pilot reported for work (the “home city”), and would fly back to the home city on the same day. CRA considered that such meal expenses could be deducted pursuant to s. 8(1)(h) assuming inter alia that, as required by s. 8(4), the pilot was away from the home city on each trip for at least 12 consecutive hours.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(g)	s. 8(1)(g) deduction not available to pilot who returns to home city at the end of the day	134
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(h)	ss. 8(1)(h), (4) and (10) requirements could be met for meal expenses of pilot	87
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(s)	aviation headset is not a tool	123
Tax Topics - Income Tax Act - Section 8 - Subsection 8(6.1) - Paragraph 8(6.1)(d)	aviation headsets were electronic communication devices	109

5 October 2018 APFF Roundtable Q. 8, 2018-0768791C6 F - Frais de repas

commissioned employees can deduct only 25% of the restaurant tab when they take out a client in the city

By virtue of the combined operation of s. 8(4) and s. 67.1(1), the deduction for when a commissioned employee takes a client out to a restaurant within the metropolitan area of the employer is limited to 25% of the bill, i.e., a complete denial for the employee’s portion under s. 8(4) and a 50% denial for the client’s portion under s. 67.1(1). The Quebec equivalent of s. 8(4) provides an exception from its application where the commissioned employee takes a meal with a client.

After effectively confirming that s. 8(4) operated as described, CRA stated:

There is nothing in the Income Tax Act that allows the CRA to not apply subsection 8(4) where an employee's meal was not consumed during a period while the taxpayer was required by the taxpayer’s duties to be away, for a period of not less than 12 hours, from the municipality where the employer’s establishment to which the taxpayer ordinarily reported for work was located and away from the metropolitan area, if there is one, where it was located. …

At the request of the APFF, the situation described in the statement of the question and the response of the CRA will be brought to the attention of that Department [of Finance].

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 67.1 - Subsection 67.1(1)	s. 67.1(1) applies to client portion of restaurant tab even where s. 8(4) applies to employee	65

Subsection 8(5) - Dues not deductible

Administrative Policy

26 November 2013 External T.I. 2013-0492411E5 - Union Dues

recurring union dues to fund union pension plan shortfall

Employees have a pension plan ("EE plan") that is fully funded by their Union. The Union plans to collect a special union dues levy from the Members ("Dues") over XX years to cover a possible funding shortfall in the EE plan. The Dues are required to maintain Union membership and will be refunded if there is no shortfall. In finding that ss. 8(5)(a) and (c) did not deny the deduction of the Dues, CRA stated:

[U]nion dues used to fund the pension plan of union employees are generally not considered levied for or under a superannuation fund or plan. Further…union contributions to a pension plan for its employees are generally considered to be related to the ordinary operating expenses of the union.

11 July 2006 External T.I. 2006-0182451E5 F - Indemnité versée par un syndicat

payments by union to members to attend union conventions on their days off reduce the union dues deduction

In order to encourage members to participate in union activities on their day off, the union compensates them during their attendance at union councils or conventions where matters such as working conditions, training, pressure tactics if necessary, and the general administration of the union are discussed. CRA stated:

[P]ayments made in a particular year by a trade union to its members as an allowance for attending trade union councils or conventions on their days off, may not be expenses directly related to the ordinary operating expenses of the union for the year so that the portion of the annual dues of the union members for the year corresponding to the payments made by the union as an allowance for the year would not be deductible by virtue of subsection 8(5).

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 3 - Paragraph 3(a)	payments by union to members to attend union conventions on their days off not taxable	118

28 December 1995 Internal T.I. 9529347 - UNION OWNING SHARES

Before noting that the use of surplus operating funds by a union to acquire shares of a business corporation might result in the loss of deductibility of the dues, RC stated that a union's ordinary operating expenses "can be defined as an expenditure which falls into place as part of the undistinguished common flow of the trade union's activity; that the expenditure forms part of the normal business carried on, calling for no remarks and arising out of no special or particular situation."

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 149 - Subsection 149(1) - Paragraph 149(1)(k)		35

2 May 1995 External T.I. 9506405 - UNION DUES-WEEKLY LEVY-FUNDS FOR LAW SUIT

A $5 dollar per week levy on all members of a union in order to fund a law suit would not qualify as being in respect of ordinary operating expenses, which "can be defined as an expenditure which falls into place as part of the undistinguished common flow of the trade union's activity". Here, the law suit arose out of a special or particular situation, i.e. , a situation that went beyond what was ordinarily and frequently encountered in negotiations to promote working conditions.

Paragraph 8(5)(b)

Administrative Policy

24 June 2003 External T.I. 2002-0176475 F - DOMMAGES-INTERETS PROFESSIONEL

professional liability insurance premiums deductible under s. 8(5)(b)

Also released under document number 2002-01764750.

A professional incurred liability in his capacity of employee of his professional corporation that is in excess of his liability coverage. After noting that “subsection 8(5) … provides that professional or malpractice liability insurance that is necessary to maintain a professional status recognized by statute is deductible in computing employment income,” CCRA went on to indicate that this provision did not authorize the deduction of the uninsured loss.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(2)	personal liability for damages in excess of liability coverage not deductible given s. 8(2)	142

Subsection 8(6)

Paragraph 8(6)(b)

Subparagraph 8(6)(b)(ii)

Administrative Policy

4 April 2003 Internal T.I. 2003-0004387 F - OUTIL ADMISSIBLE APPRENTI MECANICIEN

tool that is resold without being used qualifies as “new” to the purchaser

Also released under document number 2003-00043870.

Regarding whether s. 8(6)(b)(ii) was satisfied where the tool was acquired from another person who has never used it, the Directorate stated:

[I]n order to meet the condition "has not been used for any purpose before it is acquired by the taxpayer” in subparagraph 8(6)(b)(ii), an "eligible tool" must be new. A tool that was acquired by a taxpayer from another person who purchased it new and never used it (for personal, employment, business or other purposes) before reselling it to the taxpayer could meet the condition of never having been used for any other purpose for purposes of subparagraph 8(6)(b)(ii).

Words and Phrases

new

Subsection 8(6.1)

Paragraph 8(6.1)(d)

Administrative Policy

26 May 2023 External T.I. 2023-0962521E5 - Employment Expenses of a Pilot

aviation headsets were electronic communication devices

CRA considers that pilots are not entitled to the deduction under s. 8(1)(s) for tools for the cost to them of aviation headsets (which are worn so as to prevent hearing loss and to facilitate communications with Air Traffic Control). It considered that such headsets come within the exclusion in s. 8(6.1)(d), from what otherwise would qualify as an eligible “tool,” for an “electronic communication device” and also considered that the headsets did not come within its understanding of the ordinary meaning of "tool," namely, an item that is “designed to create a physical change in something or be used as an instrument of measurement or manipulation.”

Words and Phrases

tool

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(g)	s. 8(1)(g) deduction not available to pilot who returns to home city at the end of the day	134
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(h)	ss. 8(1)(h), (4) and (10) requirements could be met for meal expenses of pilot	87
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(s)	aviation headset is not a tool	123
Tax Topics - Income Tax Act - Section 8 - Subsection 8(4)	pilot potentially could deduct meal expenses pursuant to s. 8(1)(h) in connection with daily flying from and to the home city, provided that 12-hour requirement met	76

Subsection 8(13) - Work space in home

Administrative Policy

25 November 2021 CTF Roundtable Q. 9, 2021-0911851C6 - Work-Space-In-The-Home Expenses

an employer does not certify on Form 2200 that employees’ home offices are the principal place of performing their duties

The questioner posited that employers are responsible for determining if the conditions of employment entitle the employee to deduct work-from-home expenses under s. 8(13), and asked how employers are to determine if an employee is required to principally perform the individual’s duties away from the employer’s office.

After noting that signing the T2200 Form does not provide an employee with any assurance that the expenses incurred are deductible since the Act contains additional requirements for deductibility, CRA noted that, although Q.10 on the T2200 Form asks that an employer approximate the percentage of the employee’s duties of employment that were performed at a workspace in the home, the employer is not asked to certify whether this workplace was the place where the employee principally performed the individual’s duties of employment. CRA further indicated that an employer should use the method which best aligns with its practices and procedures to collect the information needed to respond to Q. 10.

Home office expenses for employees Date modified: 2020-12-15

Temporary “flat rate method” for computing s. 8(13) deduction in 2020

New temporary flat rate method

The new temporary flat rate method .. [can be used] if you worked more than 50% of the time from home for a period of at least four consecutive weeks in 2020 due to the COVID-19 pandemic. You can claim $2 for each day you worked from home during that period plus any additional days you worked at home in 2020 due to the COVID-19 pandemic. The maximum … claim using … [this] method is $400 (200 working days) per individual.

Eligibility

… Each individual working from home who meets the eligibility criteria can use the temporary flat rate method … . This means multiple people working from the same home can each make a claim. …

You do not have to:

calculate the size of your work space

keep supporting documents …

Your employer does not have to … complete and sign Form T2200S or Form T2200

Days that can be counted … [include] days you worked part-time hours from home

This method can only be used for the 2020 tax year.

Application of regular “detailed” method in 2020

Detailed method

You are eligible to claim a deduction for home office expenses for the period you worked from home, if you meet all of the criteria:

you worked from home in 2020 due to the COVID-19 pandemic or your employer required you to work from home

you worked more than 50% of the time from home for a period of at least four consecutive weeks in 2020

have a completed and signed Form T2200S or Form T2200 from your employer …

the expenses are used directly in your work during the period

Changes to the process

CRA … will accept an electronic signature on the Form T2200S and Form T2200 … (applies to the 2020 tax year only)

New eligible expenses

The CRA has expanded the list of eligible expenses that can be claimed to include home internet access fees.

28 March 2019 External T.I. 2019-0799241E5 F - Dépenses d'emploi (employé qui n'est pas à commission)

home office expenses generally cannot include property taxes or insurance

In Section 3.2 (3rd paragraph) of 5 October 2018 APFF Roundtable Q. 16, 2018-0768871C6 F, CRA indicated that the home office expenses of an employee (other than a commission employee governed by s. 8(1)(f) rather than s. 8(1)(i)) may include “property taxes, and home insurance costs associated with maintaining the office.” CRA now issued this correction, stating: [TaxInterpretations translation]

Where a taxpayer claims a deduction under paragraph 8(1)(i), property taxes and home insurance premiums are not deductible. Those are not included in home office expenses for office rent for purposes of subparagraph 8(1)(i)(ii) of the Act. Similarly, they are not included in the cost of supplies that were consumed directly in performance of the duties of the office or employment for the purposes of subparagraph 8(1)(i)(iii).

Consequently, our answer should have been the following:

“Home office expenses may include the portion of expenses such as electricity, heating, and maintenance associated with maintaining the office. However, they cannot include property taxes, home insurance premiums, mortgage interest or capital cost allowance for a building.”

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(i) - Subparagraph 8(1)(i)(ii)	property taxes and insurance expenses of home office do not qualify	131

27 October 2014 External T.I. 2012-0471391E5 F - Entreposage d'inventaire à domicile

inventory storage part of work place

A commissioned employee carries out his principal duties at his home where he has a home office as well as being required by his employer to have inventory storage space either in a separate room or the same room for use in client presentations. CRA responded (TaxInterpretations translation):

[T]he inventory storage space could form part of the place where the individual principally performs the duties of his office or employment if the use and storage of the inventory is necessary for the accomplishment of his office or employment at the home.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(12)	separate samples storage room part of home office	92

30 October 2013 External T.I. 2013-0500831E5 F - Frais de bureau à domicile

inapplicable where corporation uses its individual shareholder's office

After noting that “Form T2200 must generally be completed by an employer where an individual, under his or her employment contract, is required to pay certain expenses to earn income from an office or employment,” CRA indicated that where a corporation is using an office in its individual shareholder’s home, because the “person who uses the workplace in this situation is the corporation … Form T2200 cannot be completed.”

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose	to deduct applicable home expenses, individual shareholder must charge rent to corporation using home office	44
Tax Topics - Income Tax Act - Section 45 - Subsection 45(1) - Paragraph 45(1)(c)	incidental rental use of home does not result in part disposition	143

7 October 2011 Roundtable, 2011-0411891C6 F - Dépenses- EPSP - négociant en vente

home office of a PSP corporation’s employee could qualify

A corporation carries on a personal services business (PSB). Is it possible for the employee to personally deduct, from the employee’s otherwise-determined employment income, expenses in respect of the employee’s home office under subsection 8(13)? The employee’s home is the principal place of business of the corporation and the form T2200 will be completed by the employer, i.e., such corporation.

CRA indicated that there would be deductibility if the usual conditions in ss. 8(13) and 8(1)(i) were satisfied.

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(p) - Subparagraph 18(1)(p)(iii)	s. 18(1)(p)(iii) deduction limited to commission income	182

24 April 2002 External T.I. 2001-0095755 F - TÉLÉTRAVAIL

telework arrangement, even if voluntary, and some time spent in the employer office, can satisfy s. 8(13) requirements/ time spent on the road does not satisfy the “primarily” requirement

The Employe is now permitting employees to choose to perform their duties from home (“telework”) so that employees can perform the tasks assigned to them from home, but with a certain portion of their time spent on the road or at the office (e.g., in a shared work space for such teleworking employees). CCRA indicated:

Although the employer must confirm in this context through the Form T2200 that the employee was obliged by the employment contract to use part of their home to perform the employment duties and to pay for the specified supplies, for which the employee is not reimbursed, it need not confirm that the s. 8(13) conditions were satisfied.
“[I]f an employee voluntarily adheres to the telework arrangement proposed by their employer, the employee is considered to have an obligation to use part of their home to perform the duties of employment and to pay certain expenses relating to this space devoted to working from home as long as the employee and the employer enter into a formal telework agreement.”
“[T]he fact that the Employer provides an individual or shared work space at its place of business for teleworking employees has no bearing on an employee's eligibility to claim the deduction of expenses incurred in maintaining space dedicated to working from home in computing employment income.”
Time spent on the road is not time spent by the employee working at home for purposes of the “principally” (over 59%) test.

Words and Phrases

primarily

11 July 1995 External T.I. 9508235 - WORK SPACE DEDUCTIBLE AS SUPPLIES

"Equipment storage space in the home does not meet the requirements of subsection 8(13) of the Act for work space in the home for deduction proposes."

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(h) - Subparagraph 8(1)(h)(iii)		46
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(i) - Subparagraph 8(1)(i)(iii)		74

15 June 1992 Memorandum 921443 (December 1992 Access Letter, p. 7, ¶C5-180)

An employee is not entitled to claim a deduction under s. 8(13) unless he has also met the conditions set out in s. 8(1)(f), or (i) and s. 8(10).

Paragraph 8(13)(a)

Articles

Jiani Qian, "COVID-19 and Employees' Home Office Expenses", Canadian Tax Focus, Vol. 10, No. 2, May 2020, p.2

Requirement of employee to incur expenses can be formalized subsequently (p. 2)

Home office expenses may be deductible to an employee under either paragraph 8(1)(f) or (i) … . Subsection 8(13) provides additional requirements.

… 2000-0022015 …and 2011-0394321E5 … [indicate] that a work-from-home arrangement may be initially entered into voluntarily and formalized later … .

CRA “physical” meeting requirement cf. Landry (p. 2)

Subparagraph 8(13)(a)(ii) requires that the workspace be used exclusively for the purpose of earning employment income and used on a regular and continuous basis for meeting customers or other persons in the ordinary course of performing the employment duties. … "[M]eeting" means a physical encounter … [per] 2013-0481171E5 … [notwithstanding] Landry.

“Principally” requirement in s. 8(13)(a)(i) may require 6 months or more at home (p.2)

An alternative route to deductibility is subparagraph 8(13)(a)(i), which requires that the workspace at home be where the employee "principally" performs the duties of the office or employment. The CRA's view is that, in this context, "principally" means more than 50 percent of the time. … Since subsection 8(1) refers to "computing a taxpayer's income for a taxation year from an office or employment," it would be reasonable to infer that the "principally" test should be determined over the course of the full period of employment in the calendar year, rather than for just the part of the year during which the employee is required to work from home for that employment. This would imply … at least 6 months in order to meet the test.

Subparagraph 8(13)(a)(i)

Administrative Policy

18 June 2007 Internal T.I. 2007-0231861I7 F - Principale place d'affaires

“principally performed” test references the proportion of time spent at the home office

Regarding the application of s. 8(13)(a)(i) to home office expenses incurred by Quebec real estate agents under a contract of service, the Directorate stated:

In order to determine whether a real estate agent's home office meets the requirement set out in subparagraph 8(13)(a)(i), it is necessary to refer to the amount of time that the agent physically spends in the premises of the agent’s home set aside for the purpose of his or her work. Thus, if more than 50% of the time spent on all of the agent’s employment-related duties is attributable to time spent in those premises, subject to paragraph 8(13)(b), an amount may be deducted. … [T]ime spent on the road, on the premises of properties for sale, and at the real estate broker's place of business cannot be assimilated to time spent working at the home office.

Words and Phrases

principally performs

3 December 1992 Memorandum (Tax Window, No. 27, p. 20, ¶2335)

Salespersons who do not spend the majority of their time working in their home office will not be entitled to deduct the restricted expenses.

The restrictions do not apply to the costs of long distance telephone calls, cellular telephone air time, and stationery items.

Subparagraph 8(13)(a)(ii)

Administrative Policy

16 August 2022 Roundtable, 2022-0946251C6 - 2022CPACanProvRoundtableQ10HomeOfficeExpenses

s. 8(13)(a)(ii) does not extend to virtual meetings

Regarding the impact of meeting clients in a home virtually, CRA stated:

It is the long-standing position of the … CRA … that the term “meeting”, as used in both subparagraph 8(13)(a)(ii) and 18(12)(a)(ii) of the Act includes only face to face encounters.

At the present time, the CRA is not considering an administrative position that would include virtual encounters for purposes of the test in subparagraph 8(13)(a)(ii) or 18(12)(a)(ii) of the Act.

However, depending on the facts, the work space expenses might satisfy s. 8(13)(a)(ii) or 18(12)(a)(ii).

Words and Phrases

meeting

Locations of other summaries		Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(12) - Paragraph 18(12)(a) - Subparagraph 18(12)(a)(ii)	“meetings” in ss. 8(13)(a)(ii) and 18(12)(a)(ii) refers only to “face to face encounters”	183

10 December 2013 External T.I. 2013-0481171E5 - Home Office Expenses

"meetings" must be in person

After noting that "to meet" means for "(two or more people) [to] come into each other's company" and "that some informal Tax Court of Canada decisions have held that the phrase "meeting customers" may include meetings held by telephone," CRA stated:

[T]he phrase "meeting customers or other persons"… includes only face to face encounters.

Words and Phrases

meeting

Lesser of A or B: A = 1,000, and B = 4,500 (20% of $22,500);	$1,000
Minus C: amounts deducted in the year under paragraphs 8(1)(j) or (p)	$350
Claude’s annual 8(1)(q) limit	$650

Advertising expenses deductible under paragraph 8(1)(q) (total eligible expenses paid were $700, but the deduction cannot exceed the limit of $650)	$650
Add: travel expenses deductible under paragraph 8(1)(h)	$1,300
Add: CCA deductible under paragraph 8(1)(p)	$350
Total amount deductible in the current year	$2,300

Advertising and travel expenses deductible under paragraph 8(1)(q) (the eligible expenses paid are $2,000 ($700 + $1,300), but the deduction cannot exceed the limit of $650)	$650
Add: CCA deductible under paragraph 8(1)(p)	$350
Total amount deductible in the current year	$1,000

You are here

Section 8

Table of Contents

Subsection 8(1) - Deductions allowed

Paragraph 8(1)(a)

Cases

The Queen v. Patterson, 82 DTC 6326, [1982] CTC 371 (FCTD)

Paragraph 8(1)(b) - Legal expenses of employee

Commentary

Cases

Barkley v. Canada, 2021 FCA 5

Fenwick v. Canada, 2009 DTC 5525, 2008 FCA 370

Loo v. Canada, 2004 DTC 6540, 2004 FCA 249

Turner-Lienaux v. The Queen, 97 DTC 5294, [1999] 1 CTC 89 (FCA)

Fernando v. The Queen, 93 DTC 5412, [1993] 2 CTC 173 (FCTD)

Wilson v. The Queen, 90 DTC 6382 (FCTD), aff'd 91 DTC 5407 (FCA)

See Also

Clément v. The Queen, 2020 CCI 33 (Informal Procedure)

Kurnik v. The Queen, 2019 TCC 206 (Informal Procedure)

Catlos v. The Queen, 2018 TCC 177, aff'd on other grounds, sub nom. Barkley v. Canada, 2021 FCA 5

Ross v. The Queen, 2016 TCC 170 (Informal Procedure)

Allan v. The Queen, 2013 DTC 1072 [at 390], 2013 TCC 65

Caruso v. The Queen, 2012 DTC 1200 [at 3511], 2012 TCC 233 (Informal Procedure)

Lester v. The Queen, 2012 DTC 1030 [at 2642], 2011 TCC 543 (Informal Procedure)

Chagnon v. The Queen, 2011 DTC 1205 [at 1216], 2011 TCC 268

Blackburn v. The Queen, 2010 DTC 1073 [at 2898], 2010 TCC 69 (Informal Procedure)

Bonsma v. The Queen, 2010 DTC 1227 [at 3639], 2010 TCC 342 (Informal Procedure)

Kaushik v. The Queen, 2006 DTC 2277, 2005 TCC 207 (Informal Procedure)

Cimolai v. The Queen, 2005 DTC 1800, 2005 TCC 767

Farrell v. The Queen, 2005 DTC 842, 205 TCC 352

Blackburn v. The Queen, 2004 DTC 2409, 2004 TCC 180 (Informal Procedure)

Blagdon v. The Queen, 2003 DTC 804 (TCC), aff'd 2003 DTC 5491, 2003 FCA 269

L'Écuyer v. The Queen, 95 DTC 241 (TCC)

MacDonald v. MNR, 90 DTC 1751, [1990] 2 CTC 2269 (TCC)

Administrative Policy

Q.2

Q.3

Q.4

Q.5

IT-99R4 "Legal and Accounting Fees" under "Collection of Salary and Wages"

Paragraph 8(1)(c) - Clergy residence

Commentary

Inclusion in clergy member's income where provision of manse or housing allowances

Computation of deduction

Eligibility for deduction

Member of religious order

Member of clergy

Regular minister

Ministering to congregation

Full-time administrator appointed by religious order or denominaton

Principal Place of Residence v. Principal Residence

Remuneration limitation

Cases

Canada v. Lefebvre, 2010 DTC 5042 [at 6691], 2009 FCA 307

Canada (Minister of Citizenship and Immigration) v. Khan, 2005 DTC 5715, 2005 FC 398

Rumford v. The Queen, 94 DTC 6121, [1994] 1 CTC 239 (FCA)

Zylstra Estate and Small v. The Queen, 94 DTC 6687, [1995] 1 CTC 2392 (FCTD), aff'd sub-nominee McRae v. The Queen, 97 DTC 5124 (FCA)

See Also

Lichtman v. The Queen, 2017 TCC 252 (Informal Procedure)

Parker v. The Queen, 2015 DTC 1118 [at 745], 2015 TCC 86 (Informal Procedure)

Tidd v. The Queen, 2012 DTC 1060 [at 2785], 2012 TCC 16 (Informal Procedure)

Shaw v. The Queen, 2010 DTC 1144 [at 3267], 2010 TCC 210 (Informal Procedure)

Kirkbride v. The Queen, 2003 DTC 966, 2003 TCC 229 (Informal Procedure)

Koop v. R., 99 DTC 707, [1999] 3 CTC 2084 (TCC)

Austin v. R., 99 DTC 710, [1999] 2 CTC 2270 (TCC)

Alemu v. R, 99 DTC 714, [1999] 2 CTC 2245 (TCC)

Fitch v. R., 99 DTC 721, [1999] 2 CTC 2419 (TCC)

McGorman v. Minister of National Revenue, 99 DTC 699, [1999] 3 CTC 2630 (TCC)

Kraft v. Minister of National Revenue, 99 DTC 693, [1999] 3 CTC 2185 (TCC)

Noseworthy v. R., [1999] 3 CTC 2108, 99 DTC 541 (Informal Procedure)

Oligny v. The Queen, 96 DTC 1744, [1996] 2 CTC 2666 (TCC)

McNeil v. The Queen, 95 DTC 702 (TCC)

Kolot v. MNR, 92 DTC 2391, [1993] 1 CTC 2047 (TCC)

Administrative Policy

28 April 2004 External T.I. 2004-006767

27 March 1992 T.I. and 15 April 1992 Memorandum (Tax Window, No. 18, p. 8, ¶1835)

Subparagraph 8(1)(c)(iii)

Administrative Policy

Subparagraph 8(1)(c)(iv)

See Also