14 July 1989 Administrative Letter 57786 F - Deductibility of Union Dues

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.

July 14, 1989

Dear Sirs:

Re:  Deductibility of Union Dues

This is in reply to your correspondence dated March 30, 1989, wherein you have queried the deductibility of union dues paid by 24(1) retirees for income tax purposes.

Subparagraph 8(1)(i)(iv) of the Income Tax Act (the Act) permits the deduction of annual dues to maintain membership in a trade union. Subsection 8(5) of the Act prohibits the deduction of annual dues that are levied for certain specified purposes (such as, for or under a superannuation fund or plan).  Interpretation Bulletin IT-103R is enclosed for your perusal.

Critical to an analysis of your situation is a review of the preamble applicable to all section 8 deductions permitted in the Act.  Subsection 8(1) of the Act states:  "In computing a taxpayer's income for a taxation year from an office or employment, there may be deducted such of the following amounts as are wholly applicable to that source or such part of the following amounts as may reasonably be regarded as applicable thereto".

A retiree from whom union dues are deducted would only be able to deduct said dues, for income tax purposes, if they (the dues) were reasonably attributable to income earned form an office or employment.  Dues deducted from and attributable to pension income would not qualify for a deduction under subparagraph 8(1)(i)(iv) of the Act as pension income cannot meet the prerequisite of being an income from "office or employment".  Pension income is considered an "other" source of income as defined in section 56 of the Act.

We trust that the above comments will be of assistance to you.

Yours truly,

for DirectorSmall Business and General DivisionSpecialty Rulings DirectorateLegislative and IntergovernmentalAffairs Branch