10 September 1990 Internal T.I. 901289 F - Deductibility of Expenses Against Employment Income

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.

September 10, 1990

19(1)

Re:  Deductible of Expenses Against Employment Income

This is in reply to your letter dated April, 1990 concerning the deductibility of certain types of expenses incurred by individuals doing work for your 24(1)  We apologize for the delay in providing our response.

As we understand it, in order to take advantage of an exempting provision under the proposed Goods and Services Tax legislation, you are considering hiring certain workers presently performing maintenance work on a self-employed basis as employees of the corporation.  You have asked whether or not these individuals may deduct expenses incurred for truck, automobile and supplies under paragraph 8(1)(h) of the Income Tax Act.

The determination of whether or not an individual is employed or self-employed is a question of fact which depends on the nature of the contractual arrangement between the individual and the corporation.  If an individual is determined to be employed, the deductions permitted to be claimed against employment income are limited to those provided under section 8 of the Income Tax Act.

Enclosed is a copy of the "Employment Expenses Tax Guide" which explains the types of expenses deductibility by employees.  Also enclosed is a copy of Interpretation Bulletin IT-522 entitled "Vehicle and Other Travelling Expenses - Employees" which provides detailed guidelines for employees claiming travelling expenses.

We trust that this information will be of assistance to you in this matter.

Yours truly,

for DirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and Intergovernmental Affairs Branch

Enclosures (2)