14 January 2002 External T.I. 2001-0107785 - TRAVEL COSTS-EMPLOYEES

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

Whether a substitute teacher, who is on call, can deduct transportation costs for travel between the home and the school at which they are asked to teach.

Position: No.

Reasons:

Travel between home and the place of work, being the school at which the substitute is teaching, is a personal expense and therefore not deductible in computing income from employment.

            2001-010778
XXXXXXXXXX        A. Seidel, CMA
(613) 957-2058
January 14, 2002

Dear XXXXXXXXXX:

Re: Substitute Teachers and Travel Costs

This is in reply to your letter dated September 19, 2001, in which you requested our views as to whether travel costs incurred by a substitute teacher are deductible in computing employment income using form T777-Statement of Employment Expenses and whether the teacher's employer should be providing the substitute teacher with a T2200-Declaration of Conditions of Employment.

The particular circumstances in your letter on which you have asked for our views involve a factual situation on completed transactions. As explained in Information Circular 70-6R4, it is this Directorate's practice to consider a request for an advance income tax ruling on proposed transactions in the manner set out in the circular. However, we are prepared to offer the following general comments which may be of assistance.

Paragraphs 31 and 32 of Interpretation Bulletin IT-522R ("IT-522R") outline the requirements that must be satisfied before an employee is entitled to deduct, under paragraph 8(1)(h) or (h.1) of the Income Tax Act (the "Act"), amounts spent in the year for travel. Generally, travel costs are deductible where the amounts are reasonable in the circumstances and all of the following conditions are met:

(a) the employee is ordinarily required to carry on the duties of the office or employment away from the employer's place of business or in different places;

(b) under the contract of employment, the employee is required to pay travel expenses incurred in the performance of the duties of the office or employment;

and

(c) where the expense is deducted under paragraph 8(1)(h) of the Act:

(i) the employee is not in receipt of an allowance for travel expenses that was excluded from income by virtue of any of subparagraph 6(1)(b)(v), (vi), or (vii) of the Act; and

(ii) the employee has not claimed any deduction for the year under any of paragraph 8(1)(e), 8(1)(f) or 8(1)(g) of the Act;

or

(d) where the expense is deducted under paragraph 8(1)(h.1) of the Act:

(i) the employee is not in receipt of an allowance for motor vehicle expenses that was excluded from income by virtue of paragraph 6(1)(b) of the Act; and

(ii) the employee has not claimed any deduction for the year under paragraph 8(1)(f) of the Act.

For the purposes of the above:

? "ordinarily" means "customarily" or "habitually", rather than "continually", but there should be some degree of regularity in the travel that the employee is required to do;

? "required" means that the travel is necessary to the satisfactory performance of the employee's duties (it does not necessarily imply that the employer must order the employee to travel),

? "place of business" generally is considered to have reference to a permanent establishment of the employer; and

? "in different places" generally refers to the situation where the employer does not have a single or fixed place of business.

Where a substitute teacher is hired by a school board to teach at any one of the schools under its jurisdiction, the employer's place of business is considered to be the school at which the substitute teacher teaches on any particular day, not the school board office. Therefore, on any day that a substitute teacher performs all of their employment duties at one particular school, the requirements in subparagraph 8(1)(h)(i) or (h.1) of the Act (as explained in paragraph 31(a) of IT-522R) would not be satisfied and the substitute teacher would not be entitled to claim any travel expenses in computing employment income. Accordingly, in circumstances where a substitute teacher is hired for a one-day teaching assignment, at any one of the schools within a school board's jurisdiction, the employer would not prepare a form T2200.

A substitute teacher would not be entitled to claim travel costs on a Form T777 in those situations where the requirements outlined in paragraph 31 of IT-522R are not satisfied.

The publications referred to in this letter may be obtained from your local tax services office or from our Internet web site (www.ccra-adrc.gc.ca).

Yours truly,

John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch

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