17 January 1995 External T.I. 9427625 - EMPLOYMENT EXPENSE AND TEACHERS' SUPPLIES

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

Deductibility of teacher's supplies under 8(1)(i)(iii)

Position TAKEN:

Question of Fact. If there is no requirement either express or"implied" for the teachers to be responsible for the expenses,they do not qualify. In addition, all other provisions of the subparagraph must be met.

Reasons FOR POSITION TAKEN:

Application of legislation, interpretation bulletin, jurisprudence and previous correspondence position

		942762
XXXXXXXXXX	D. Zion

Attention: XXXXXXXXXX

January 17, 1995

Dear Sirs:

Re: Employment Expense and Teachers' Supplies

We are writing in response to your letter of October 20, 1994 regarding the above-noted subject. You have requested clarification of the income tax provisions regarding the deductibility of certain expenses incurred by teachers to purchase supplies for use in their classrooms.

More specifically, you have asked if teachers, who make purchases of equipment and/or supplies that may enhance the effectiveness of their teaching, but are not a requirement of employment, would be entitled to deduct the cost of such items as an employment expense.

Generally, subject to certification, subparagraph 8(1)(i)(iii) of the Income Tax Act (the "Act") enables a taxpayer to deduct from income for a taxation year from an office or employment the "cost of supplies that were consumed directly in the performance of the duties of the office or employment and that the officer or employee was required by the contract of employment to supply and pay for...". Such expenses are deductible to the extent that the individual has not been reimbursed and is not entitled to be reimbursed for them. We have enclosed for your information revised Interpretation Bulletin IT-352R2: Employees' Expenses, Including Work Space in Home Expenses. Paragraph 1 of this bulletin outlines the requirements which must be met and further discusses the issue of whether the requirement to pay for the supplies must be included in the contract of employment or may be implied.

Although ordinarily this requirement necessitates that there be an express requirement within the terms of a written contract of employment, it is the Department's general position that this requirement may also be considered to have been satisfied where it is tacitly understood by the employer and the employee that the supplies be provided by the employee. This will be a question of fact and can only be determined through a review of the circumstances present in each case. In order to determine if an expense incurred by an employee was actually an implied requirement of the contract of employment, the Courts have reviewed whether or not the failure to meet the requirement could result in the cessation of employment, poor performance evaluation or other disciplinary action on the part of the employer.

In our view, if there is no requirement, either express or implied, for the teachers to be responsible for the expenses, they do not qualify for a deduction under subparagraph 8(1)(i)(iii) of the Act. The fact that the items, although not a requirement of the contract of employment, may enhance the effectiveness of their teaching would not be sufficient to meet the requirements to allow a deduction pursuant to this provision.

We trust our comments will be of assistance to you.

Yours truly,

P.D. Fuoco
for Director
Business and General Division
Rulings Directorate
Policy and Legislation Branch