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: Is a minister who is no longer required to be in full active service entitled to the 8(1)(c) deduction?
Position: YES, on the employment income
Reasons: Part-time employment qualifies for the 8(1)(c) deduction
Signed on February 4, 2004
XXXXXXXXXX
Dear XXXXXXXXXX:
The Honourable Stan Keyes, Minister of National Revenue, has asked me to reply to your letter of December 19, 2003, concerning the clergy residence deduction.
In your letter, you state that you will be turning XXXXXXXXXX in XXXXXXXXXX, and that you will no longer be in full active service as a minister in the XXXXXXXXXX as of XXXXXXXXXX. After that date, you will receive XXXXXXXXXX per cent of your current income, along with a taxable housing allowance of $XXXXXXXXXX. You ask whether you are still eligible for the clergy residence deduction.
The Income Tax Act requires an employee claiming the clergy residence deduction to file with the return of income a prescribed form T1223 signed by the employer to the effect that the employee met the requirements of the relevant provisions in the year in which the deduction was claimed. Accordingly, the Canada Revenue Agency is generally satisfied that the requirements for the clergy housing deduction are met when the employer attests that the individual is an employee and has performed the requirements of a regular minister in the particular year.
In order to qualify for the clergy residence deduction, a regular minister of a religious denomination must be empowered and must perform spiritual duties, conduct religious services, and carry out similar functions which may include participating in the conduct of religious services, the administration of some of the rituals, ordinances or sacraments, and pastoral responsibilities to specific segments of the religious organization. An employee of a particular religious organization, whose duties as a minister are only part-time, would meet the function test provided ministering is an integral part of that part-time job. The deduction, however, would be limited to the remuneration from that part-time job.
On the other hand, when the individual is in fact retired, performs very few of the duties discussed above, and is no longer an employee, he or she is not eligible for the clergy housing deduction.
I trust the information provided is of assistance.
Yours sincerely,
Stephen Rigby
Assistant Commissioner
Policy and Planning Branch
Claude Tremblay
January 15, 2004
957-2139
2004-005540
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