27 January 2001 External T.I. 9133106 F - SR&ED Accounting & Interest Expense

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.

January 27, 1992

Subject: Respite Caregivers of the Province of Manitoba

We are writing in reply to your memorandum of November 28, 1991, wherein you requested our comments regarding the income tax status of "Respite Caregivers" in the circumstances described in the referral from the Winnipeg District Office.

24(1)

Respite care services may be provided, in the home of the recipient, in the home of the provider, at a camp or through a recreation/leisure program or such other location that is appropriate to the needs and wishes of the mentally handicapped persons.

The D.O. is of the view that       19(1)     (and other Respite Caregivers) are employees of family services and that their remuneration is not exempt from income tax.

Our Comments

In situations where a taxpayer receives social assistance payments as described in paragraph 56(1)(u), a corresponding deduction in computing taxable income is permitted under subparagraph 110(1)(f)(iii).  This is the situation that the Minister of Finance was describing in his letter, and the situation that       19(1)        believes applies to her.

From our review of the information submitted, it is our opinion that the description of the relationship between     19(1)   and family services appears to evidence an employer/employee relationship and any remuneration received from family services would be included in      19(1)       income under subsection 5(1).  No amounts would be deductible in computing this income except as provided by section 8.

If, on the other hand, family services were to acknowledge that   19(1)     was an independent contractor and not an employee, the amounts received by her would be included in income under subsection 9(1) and reasonable expenses would be allowable as a deduction in computing that income.

Since       19(1)        does not appear to be in receipt of social assistance payments nor does she appear to be an independent contractor, we are in agreement with the position taken by the District Office in this regard.

B.W. DathDirectorBusiness and General DivisionRulings DirectorateLegislative and IntergovernmentalAffairs Branch