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 changes to the delivery of the Veterans Independence Program will affect the tax treatment of amounts received by eligible clients.
Position: No. The change from a contribution to a grant arrangement will not result in the taxation of payments in the hands of eligible clients.
Reasons: Pension payments, allowances or compensation that are received under or are subject to the Pension Act, are specifically excluded from income under paragraph 81(1)(d) of the ITA. These grants/prepayments are allowances which are subject to the Pension Act.
July 5, 2013
XXXXXXXXXX
Dear XXXXXXXXXX:
Thank you for your correspondence of May 8, 2013, about the taxation of amounts you receive for housekeeping and grounds maintenance under the Veterans Independence Program (VIP).
Because of recent changes to the VIP, you will now receive lump sums to pay your vendor invoices instead of sending the invoices for payment to Veterans Affairs Canada like you did before. You ask if this change means the lump sums are taxable and if you must report them as income on your income tax and benefit return.
The Canada Revenue Agency reviewed this change and determined that the lump sums are non-taxable because they are allowances specifically exempt under the Income Tax Act. Therefore, you do not have to report these amounts as income on your tax return.
I trust the information I have provided is helpful.
Yours sincerely,
Gail Shea, P.C., M.P.
Minister of National Revenue
Cynthia Underhill
905-721-5197
File # 2013-048956
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, 2013
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, 2013
Email this Content