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 payments of Dependency and Indemnity Compensation received by a Canadian resident taxpayer from the United States Department of Veterans Affairs are taxable under the Act.
Position: Yes. The amounts are annuity payments and are included in income under paragraph 56(1)(d).
Reasons: Consistent with classification of similar payments received by spouses of employees of defence contractors killed in a war zone (see document 2006-0217681E5).
XXXXXXXXXX
2014-056313
Jason R. Ward
(613) 957-2093
February 16, 2015
Dear XXXXXXXXXX:
Re: U.S. Dependency and Indemnity Compensation
We are writing in reply to your email of December 18, 2014, concerning whether payments of Dependency and Indemnity Compensation ("DIC") received by a Canadian resident taxpayer from the United States Department of Veterans Affairs are included in income under the Income Tax Act (the "Act").
XXXXXXXXXX
Our comments
We have examined the information provided with your submission pertaining to the payment of such amounts as well as some of the material that is available on the internet that pertains to the DIC. The DIC provides periodic compensation payments to eligible survivors of members of the U.S. military who died in the line of duty or eligible survivors of veterans whose death resulted from a service-related injury or disease. In our view, these payments are annuities which fall within the provisions of paragraph 56(1)(d) of the Act, and should be reported as annuity income by the recipient.
We trust that these comments will be of assistance.
Yours truly,
Jason R. Ward, CPA, CA
For Director
Financial Industries and Trusts Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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, 2015
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, 2015
Email this Content