14 January 2004 External T.I. 2003-0048145 - T4A - Self-Employed Musicians Remuneration

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: Whether a taxpayer must file an information return pursuant to subsection 200(1) of the Regulations for a payment described in paragraph 153(1)(g) of the Income Tax Act.

Position: Yes

Reasons: Notwithstanding the de minimus rule, which is an administrative position, amounts paid pursuant to paragraph 153(1)(g) of the Income Tax Act must be reported in prescribed form pursuant to subsection 200(1) of the Regulations.

XXXXXXXXXX 	2003-004814
		Kathryn McCarthy, CA
January 14, 2004

Dear XXXXXXXXXX:

Re: T4As - Self-Employed Musicians Remuneration

We are writing in response to your letter of October 16, 2003, concerning self-employed musicians who are paid a flat fee by a church for each rehearsal and performance. We also acknowledge additional information obtained in our telephone conversation on January 6, 2004 (McCarthy/XXXXXXXXXX).

The church issues a T4A to each self-employed musician that earns in excess of $500 per year, and you inquired whether the church must file T4A's. Further, you indicated that no deductions are withheld at source by the church on amounts paid to these musicians.

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. For assistance in determining whether a T4A is required in respect of a particular payment, or series of payments, please contact the Trust Accounts Division of your local Tax Services Office. We are, however, prepared to provide the following general comments on the withholding requirements and filing of information returns under the Income Tax Act (the Act) and the Income Tax Regulations (the Regulations) that apply to self-employed individuals.

Paragraph 153(1)(g) of the Act includes the payment of fees, commissions or other amounts for services, other than amounts described in subsection 212(5.1). Where there is no employer-employee relationship between the payor and the recipient, the Regulations do not require the withholding of tax from payments made pursuant to paragraph 153(1)(g). The prescribed rules in the Regulations for the withholding of tax from payments described in subsection 153(1) only apply in respect of employees. However, pursuant to subsection 200(1) of the Regulations, every person who makes a payment described in subsection 153(1) of the Act (whether the payee is employed or self-employed) must issue an information return in prescribed form (a T4A in this case) in respect of the payment.

The CCRA has a de minimus rule, or administrative position, which lessens the compliance burden for payors. Under the de minimus rule, a payor must complete a T4A slip if the payment was more than $500 or income tax was deducted from the payment. For more information on the payor's responsibilities with respect to issuing T4A slips, refer to Guide RC 4157-02, Deducting Income Tax on Pension and Other Income, and Filing the T4A Slip and Summary Form 2003, which is available on our web site at www.ccra-adrc.gc.ca.

We trust our comments will be of assistance to you.

Yours truly,

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