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 taxpayer may deduct an amount incurred for a driver training course in computing income from an office or employment?
Position: Question of fact.
Reasons: See response.
December 30, 2014
Re: Deductibility of driver training expenses
We are writing in response to your correspondence of August 21, 2014, concerning the deductibility of driver training expenses. In the situation described, you have enrolled in a driver training course with XXXXXXXXXX to assist you with obtaining a general driver's licence (i.e., Class G). You have stated that you are required to have a commercial bus driver's licence as a condition of employment, but you must first obtain your general licence. Your employment duties will include driving a bus. You have asked whether the driver training expenses incurred to obtain your general or commercial licence are deductible in computing your income.
This technical interpretation provides general comments about the provisions of the Act and related legislation (where referenced). It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination. The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R5, Advance Income Tax Rulings.
Where an individual earns employment income and incurs expenses in the course of performing employment duties, he or she may be entitled to deduct these expenses, provided that certain conditions are met. Generally, in order for an amount to be deductible in computing employment income, the particular expense must be reasonable, required by the employer, incurred for the purpose of earning employment income, and specifically permitted by the rules contained in section 8 of the Income Tax Act (the Act).
While we understand that you may be required (as a condition of employment) to have or obtain a driver's licence, section 8 of the Act does not provide a deduction for driver training expenses when computing employment income.
However, as you are aware, you may be entitled to claim the non-refundable tuition tax credit and reduce the amount of your income taxes payable. Income Tax Folio S1-F2-C2, Tuition Tax Credit, (S1-F2-C2) discusses the circumstances under which a student may be eligible to claim a tuition tax credit under paragraph 118.5(1)(a) of the Act. For purposes of subparagraph 118.5(1)(a)(ii) of the Act, the fees must be paid to an educational institution certified by the Minister of Employment and Social Development (ESD) to be eligible for the tuition tax credit. Paragraph 2.9 of S1-F2-C2 clarifies that fees paid to an educational institution that is certified by the Minister of ESD may qualify as eligible tuition fees in situations where a student is enrolled in a course at the educational institution to obtain skills for, or improve the student's skills in, an occupation.
You can contact the Canada Revenue Agency's income tax enquiries line at 1-800-959-8281 to confirm if a particular institution has been certified. If an institution is not certified, the institution can request certification from the Department of ESD at the address listed in paragraph 2.6 of S1-F2-C2.
We trust these comments will be of assistance to you.
Nerill Thomas-Wilkinson, CPA, CA
Business and Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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