12 June 2012 Internal T.I. 2012-0432221I7 - Volunteer Firefighter Tax Credit (VFTC)

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 Canadian resident who lives on the Canada-US border and provides volunteer firefighting services at a fire station in the US will qualify for the VFTC if all other requirements under section 118.06 of the Income Tax Act are met.

Position: Yes.

Reasons: According to the content in paragraph 118.06(1) of the Act.

XXXXXXXXXX
									2012-043222
									Ananthy Mahendran	

June 12, 2012

Dear XXXXXXXXXX:

We are writing in response to your correspondence dated December 30, 2011, wherein you requested our views on the eligibility of claiming the volunteer firefighters tax credit (VFTC).

Specifically, you would like to know whether a Canadian resident who lives on the Canada-US border and provides volunteer firefighting services at a fire station in the US will qualify for the VFTC if all other requirements under section 118.06 of the Income Tax Act (the “Act”) are met.

Pursuant to paragraph 118.06(2)(a) of the Act, the VFTC may be claimed if an individual has provided at least 200 hours of “eligible volunteer firefighting services” in the taxation year for one or more fire departments.

Subsection 118.06(1) of the Act defines “eligible volunteer firefighting services” for the purposes of section 118.06 and states:

“In this section, “eligible volunteer firefighting services” means services provided by an individual in the individual's capacity as a volunteer firefighter to a fire department that consist primarily of responding to and being on call for firefighting and related emergency calls, attending meetings held by the fire department and participating in required training related to the prevention or suppression of fires, but does not include services provided to a particular fire department if the individual provides firefighting services to the department otherwise than as a volunteer.”

Pursuant to subsection 118.06(1) of the Act, an eligible volunteer firefighting service is a service provided to a fire department by an individual in the individual's capacity as a volunteer firefighter. The term “fire department” is not defined either in section 118.06 of the Act or elsewhere in the Act. It is our understanding that the fire department, to which an individual provides services as a volunteer firefighter, is not restricted to be located in Canada to fall within the parameters of subsection 118.06(1) of the Act.

However, pursuant to subsection 118.06(3), the Minister may request an individual making a claim under this section in respect of a taxation year to provide a written certificate from the fire chief or a delegated official of each fire department to which the individual provided eligible volunteer firefighting services for the year, attesting to the number of hours of eligible volunteer firefighting services performed in the year by the individual for the particular fire department.

Based on the above analysis, it is our view that section 118.06 of the Act does not disallow an otherwise qualified claim filed by an individual due to the fact that the individual provided his or her volunteer firefighting services at a fire station in the US.

We trust that the information provided is helpful.

Yours truly,

Sharmini Ratnasingham
Assistant Director
for Director
Financial Industries Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch