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 retired minister who still performs on a part-time basis eligible for the 8(1)(c) deduction?
Position: YES on the employment income that meets the function test
Reasons: Policy in IT-141R - provided ministering is still an integral part of the job.
Signed on December 28, 2005
XXXXXXXXXX
Dear XXXXXXXXXX:
I am replying to your letter of November 2, 2005, and further to the letter of April 26, 2004, from my predecessor, Mr. Stephen Rigby, regarding your eligibility for the clergy residence deduction.
As stated in the April 26, 2004 letter, in order to qualify for the clergy residence deduction under paragraph 8(1)(c) of the Income Tax Act, a regular minister of a religious denomination must be either in charge of a diocese, parish or congregation, or be ministering to a diocese, parish or congregation, or engaged exclusively in full-time administrative service by appointment of a religious order or religious denomination. Whether a person is a "member of the clergy" or a "regular minister" depends on the structure and practices of the particular church or religious denomination. Since this determination is a question of fact, the Canada Revenue Agency (CRA) relies on the employer to attest that the requirements for the clergy residence deduction are met in the year. The employer does this by providing the employee with a signed Form T1223, Clergy Residence Deduction.
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 his or her job. Persons who meet the status test who minister on a part-time or assistant basis and those performing specialized ministering satisfy the function test. However, some functions, such as teaching, do not qualify. As long as ministering to congregations is an integral part of the employment responsibilities and expectations, that activity will qualify. However, when the individual is in fact retired and no longer has a qualifying function as stated above, the individual is not eligible for the clergy residence deduction.
I trust that this clarifies the position of the CRA.
Yours sincerely,
Brian McCauley
Assistant Commissioner
Policy and Planning Branch
Claude Tremblay
December 15, 2005
957-2139
2005-016040
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