Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Are amounts excluded from T5007 reporting by subsection 233(2) of the Regulations, still social assistance for purposes of paragraph 56(1)(u)?
Position: It is the practise of the CRA not to include these amounts in the net income of the recipients.
Reasons: It is our understanding that the purpose of subsection 233(2) of the Regulations is to exclude those amounts from the calculation of income-tested benefits.
XXXXXXXXXX T. Young, CA
2003-005351
February 26, 2004
Dear XXXXXXXXXX:
Re: Social Assistance
We are writing in response to your letter of December 19, 2003, concerning the reporting of social assistance payments pursuant to paragraph 56(1)(u) of the Income Tax Act (the "Act") and section 233 of the Income Tax Regulations (the "Regulations") when a T5007 is not required.
In general, paragraph 56(1)(u) of the Act includes in income social assistance payments made on the basis of a means, needs or income test to the extent that they are not otherwise included in the income of the taxpayer, or the taxpayer's spouse or common-law partner. Pursuant to subsection 233(1) of the Regulations, payers of amounts described in paragraph 56(1)(u) of the Act must file a T5007 information return and report the amounts on T5007 slips. Subsection 233(2) of the Regulations excludes from the reporting requirement certain payments, such as payments in respect of medical expenses, child care, and funeral expenses. For more information on completing the T5007 information return and which payments do not need to be reported, refer to the publication T5007 Guide - Return of Benefits (T5007).
Since subsection 233(2) of the Regulations excludes specific items from the T5007 reporting requirements, it is the practise of the Canada Revenue Agency not to require the excluded amounts to be included in a recipient's net income, thereby not affecting the calculation of income-tested benefits.
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 Planning Branch
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