19 May 2005 External T.I. 2005-0117501E5 - Requirement to Issue T2200

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: Whether an employee would have reasonable grounds to request that a T2200 be issued by the employer

Position: It is a question of fact to be determined upon a review of the circumstances.

Reasons: In order to determine if an expense incurred by an employee, which was not expressly required in the contract was actually an implied requirement, the courts have reviewed whether the failure to meet the requirement could result in the cessation of employment, poor performance evaluation or other disciplinary action on the part of the employer.

2005-011750
XXXXXXXXXX Charles Rafuse
(613) 957-8967
May 19, 2005

Dear XXXXXXXXXX:

Re: Requirement to Issue T2200

This is in reply to your letter of February 18, 2005, concerning whether an employee has reasonable grounds to request that a T2200 be completed by her employer.

Specifically, you have indicated that Mrs. A is employed as a full-time school teacher and her written employment contract does not require that she purchase supplies to be used in the classroom. In addition, her employer has refused to take a position on what may or not be implied in the employment contract regarding the supply of school supplies. You have also indicated that Mrs. A is not entitled to any reimbursement for the supplies she purchased and used in her classroom. In your view, the supplies that Mrs. A would seek to deduct would meet the criteria contained in subparagraph 8(1)(i)(iii) of the Income Tax Act.

Our Comments

The particular circumstances in your letter on which you have asked for our views pertain to a factual situation. As explained in Information Circular 70-6R5, it is not this Directorate's practice to comment on proposed transactions other than in the form of an advance income tax ruling. Regarding situations involving completed transactions, all relevant facts and documentation should be submitted to the local tax services office for their views. However, we are prepared to offer the following general comments, which may be of assistance.

We would expect employers to complete a T2200 in situations where the employees have reasonable grounds to make the related claims. However, in the above situation we would not expect an employer to complete a T2200 if there is no express or implied requirement in the employment contract for the employee to supply and pay for teaching supplies. In order to determine if an expense incurred by an employee, which was not expressly required in the contract, was actually an implied requirement, the courts have reviewed whether the failure to meet the requirement could result in the cessation of employment, poor performance evaluation or other disciplinary action on the part of the employer. This is a question of fact to be determined upon a review of the circumstances.

An employees' eligibility to make certain tax claims and the employers' requirement to complete supporting tax forms are usually resolved by a mutual agreement by the employers, unions and employees. In those situations where the parties are unsure whether certain amounts can be deducted by the employees for tax purposes and therefore, whether the employers should complete the tax forms, they are encouraged to contact the local tax services office for assistance.

We trust this information is helpful.

Yours truly,

Milled Azzi, CA
For Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Planning Branch