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 that meets the function test
Reasons: Part-time employment qualifies for the 8(1)(c) deduction.
Signed on April 28, 2004
XXXXXXXXXX
Dear XXXXXXXXXX:
I am replying to your letter of March 10, 2004, further to my letter of February 4, 2004, concerning your eligibility for the clergy residence deduction.
Although an employee who has retired may retain his or her status for life, his or her functions may no longer qualify for the clergy residence deduction under paragraph 8(1)(c) of the Income Tax Act. In order to qualify for the clergy residence deduction, a regular minister of a religious denomination must be either in charge of a diocese, parish or congregation, ministering to a diocese, parish or congregation, or engaged exclusively in full-time administrative service by appointment of a religious order or religious denomination. Functions may qualify in one year but not the next, even when the employer remains constant. Some functions, such as teaching, do not qualify. An employee of a particular religious organization, whose duties as a minister are reduced, would meet the function test provided ministering is still an integral part of that job. However, where the individual is in fact retired and no longer has a qualifying function as stated above, the individual is not eligible for the clergy housing deduction.
Generally, the Canada Revenue Agency relies on the employer to attest that the requirements for the clergy housing deduction are met in the year. The employer or his representative must sign Form T1223, Clergy Residence Deduction, stating that the individual is an employee and has performed the requirements of a regular minister in a particular year.
I trust that the information provided is of assistance.
Yours sincerely,
Stephen Rigby
Assistant Commissioner
Policy and Planning Branch
Claude Tremblay
March 24, 2004
957-2139
2004-006767
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