8 January 2010 External T.I. 2009-0327441E5 - Issuance of T2200 Form to teachers

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 a T2200 Form should be issued to teachers who pay for their own supplies.

Position: If there is no express or implied requirement for the employee to supply and pay for the supplies there is no need to issue the T2200.

Reasons: We would not expect an employer to issue a T2200 if the conditions for deduction are not met.

2009-032744
XXXXXXXXXX Rita Ferguson
519-645-5261
January 8, 2010

Dear XXXXXXXXXX :

Re: Requirement to Issue T2200

This is in response to your letter enquiring about the issuance of T2200 Forms for teachers who submit receipts for employment expenses. The teachers are covered by a Collective Agreement and do not have individual contracts of employment. The Collective Agreement does not require the teachers to pay for and provide their own supplies. Nevertheless, many teachers do purchase supplies for their programs and for which they are often not reimbursed. It is the Board's belief that it cannot certify that the conditions for deductibility would be met and that it should therefore not sign Form T2200. You have asked for a written opinion on this matter.

Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of a request for an advance income tax ruling submitted in the manner set out in Information Circular 70-6R5, "Advanced Income Tax Rulings", dated May 17, 2002. This Information Circular and other Canada Revenue Agency ("CRA") publications can be accessed on the internet at http://www.cra-arc.gc.ca. Where the particular transactions are complete, the inquiry should be addressed to the relevant tax services office, a list of which is available on the "Contact Us" page of the CRA website. Although we cannot comment on your specific situation, we are prepared to provide the following comments in respect of the issues that you raised. Please note, however, that these comments are of a general nature only and are not binding on the CRA.

Generally, subject to employer certification, subparagraph 8(1)(i)(iii) of the Income Tax Act (the "Act") enables a taxpayer to deduct from income for a taxation year from an office or employment the "cost of supplies that were consumed directly in the performance of the duties of the office or employment and that the officer or employee was required by the contract of employment to supply and pay for...". Such expenses are deductible to the extent that the individual has not been reimbursed and is not entitled to be reimbursed for them. Interpretation Bulletin IT-352R2, "Employees' Expenses, Including Work Space in Home Expenses" discusses the circumstances under which a taxpayer may deduct amounts paid in the year for supplies in computing income from an office or employment. Paragraph 1 of this bulletin outlines the requirements which must be met and further discusses the issue of whether the requirement to pay for the supplies must be included in the contract of employment or may be implied.

Although ordinarily this requirement necessitates that there be an express requirement within the terms of a written contract of employment, it is the CRA's general position that this requirement may also be considered to have been satisfied where it is tacitly understood by the employer and the employee that the supplies be provided by the employee. This will be a question of fact and can only be determined through a review of the circumstances present in each case. In order to determine if an expense incurred by an employee was actually an implied requirement of the contract of employment, the Courts have reviewed whether or not 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.

We would expect employers to complete a T2200 in situations where the employees have reasonable grounds to make the related claims. However, 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.

An employee's eligibility to make certain tax claims and the employer's 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 that these comments will be of assistance.

Yours truly,

Renée Shields
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch