Principal Issues: Are benefits received under Part II of the Employment Insurance Act taxable to a status Indian when part of the training takes place on a reserve, and part of the training takes place off the reserve?
How are the benefits reported?
Position: The benefits will be exempt under paragraph 81(1)(a) only if connected to a reserve. It would be reasonable to allocate the value of the benefit related to the on-reserve training, and such amount would be exempt.
Non-exempt amounts are included in income under paragraph 56(1)(r) but to the extent that the amount relates to tuition, there is an offsetting deduction provided by paragraph 110(1)(g).
The Part II EI benefit is reported on a T4E
2005-016331
XXXXXXXXXX Renée Shields
(613) 948-5273
January 11, 2006