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: Does the Income Tax Act allow an employed tradesperson to deduct the cost of tools and related expenses?
Position: The 2006 Federal Budget proposes to recognize a deduction for the cost of eligible new tools acquired by an employed tradesperson after May 2, 2006
Reasons: The deduction will be limited to the lesser of $500 and the amount by which the total cost of the new tools acquired in the year exceeds $1,000.
Signed on July 13, 2006
XXXXXXXXXX
Dear XXXXXXXXXX:
Thank you for your correspondence received on May 17, 2006, in which you ask why the Income Tax Act does not allow an employed tradesperson to deduct the cost of tools and related expenses.
I am pleased to inform you that the 2006 Federal Budget proposes to recognize a deduction for the cost of eligible new tools acquired by an employed tradesperson after May 2, 2006. The deduction will be limited to the lesser of $500 and the amount by which the total cost of the new tools acquired in the year exceeds $1,000. The Budget also proposes to introduce a new Canada employment credit in recognition of work-related expenses incurred by employees. The new credit will take effect July 1, 2006, and will provide tax relief on the lesser of $500 ($250 for 2006) and the individual's employment income for the year.
I appreciate the opportunity to respond to your letter and trust that the information provided will be helpful.
Sincerely,
The Honourable Carol Skelton, P.C., M.P.
Randy Hewlett
957-2049
2006-018809
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2006
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2006
Email this Content