2 October 2002 External T.I. 2002-0149935 - EMPLOYMENT AWAY FROM HOME

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 CCRA.

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

Principal Issues:

A taxpayer is hired through a union hall to work in various locations away from his principal residence. The issue is whether the taxpayer is entitled to deduct employment expenses in respect of travel, board and lodging.

Position TAKEN:

Not deductible.

Reasons:

No deduction is available under section 8. Subsection 8(2) restricts deductions for employment expenses to those specifically contained in section 8. Travel between an employee's home and the employer's establishment where the employee ordinarily reports for work is personal in nature.

XXXXXXXXXX 2002-014993
T. Young, CA
October 2, 2002

Dear XXXXXXXXXX:

Re: Expenses incurred earning a living away from home

We are writing in response to your letters to the XXXXXXXXXX Tax Services Office, which were forwarded to us on July 3, 2002. On behalf of the Canada Customs and Revenue Agency, we apologize for the delay in responding to your inquiry.

In your February 12, 2002 letter you stated that you live in XXXXXXXXXX and work in various locations, mostly in XXXXXXXXXX. Your work is obtained by dispatch from a Union Hall in XXXXXXXXXX.

With some jobs, you are provided with board and lodging or an allowance in respect of board and lodging. Other jobs are considered local and do not provide any form of reimbursement. It is in reference to the local jobs that you are inquiring.

It is our understanding that your concerns relate to situations where you are hired to work as an employee in a distant location, for example, XXXXXXXXXX. In order to work in XXXXXXXXXX, you are required to incur the following types of expenses:

? Travel from your home in XXXXXXXXXX, to XXXXXXXXXX; and

? Expenses you incur for board and lodging in XXXXXXXXXX.

Your employer does not provide you with an allowance or reimburse you for any of your expenses. You have asked us if you can deduct your expenses against your employment income. You have been told that you should be able to have a T2200 form signed by your employer in respect of your expenses; however, your employer has refused to complete or sign the form.

Our Comments

Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. However, we are prepared to provide the following comments, which may be of assistance to you.

Pursuant to subsection 8(2) of the Income Tax Act (the "Act"), in determining employment income, an employee may only deduct those reasonable outlays and expenses that are specifically permitted under section 8 of the Act. In that regard, expenses for travel between an employee's personal residence and the employer's place of business where the employee ordinarily reports are not deductible as these are considered personal expenses. Similarly, expenses incurred for room and board to enable an employee to be near the employer's place of business where the employee ordinarily reports are not deductible. This appears to be the case in your situation.

There are provisions in the Act that allow an employee to deduct certain employment-related expenses incurred to carry out employment duties. For more information on which expenses can be deducted, please refer to Interpretation Bulletin IT-522, "Vehicle, Travel and Sales Expenses of Employees", which we have enclosed with this letter.

With respect to the T2200, subsection 8(10) of the Act states that an amount otherwise deductible shall not be deducted unless the employer certifies on a prescribed form (i.e., the T2200) that the conditions for deducting the expenses were met. The employer is not required to complete or sign the T2200 if the employer is of the opinion that the conditions for deducting the expenses have not been met. You indicated that your employer refused to complete or sign the T2200. Presumably this is because, in your employer's opinion, you were not required to incur any deductible expenses in order to carry out your employment duties. It should be noted that a representative of the Union cannot sign the T2200 in lieu of the employer.

We trust our comments will be of assistance to you. If you have any further questions or if you need information on your own particular situation, please contact the Client Services Division of the XXXXXXXXXX Tax Services Office.

Yours truly,

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