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:
Work space in the home in respect of equipment storage and the application subsection 8(13) of the Act.
Position TAKEN:
Work space expenses are deductible as "supplies" under subparagraph 8(1)(i)(iii) of the act and consist of a reasonable proportion of expenses relating directly to the maintenance of the work space. Storage expense does not meet the requirements of subsection 8(13) of the Act for deduction purposes.
Reasons FOR POSITION TAKEN:
In our view the use of space in the home for equipment storage does not meet the requirements of subsection 8(13) for deduction purposes.
L. Barrows
XXXXXXXXXX 950823
July 11, 1995
Dear sir:
Re: IT-352R2 Supplies/Work Space
We are replying to your letter of March 20, 1995 concerning the above referenced subject. We apologize for not being able to respond sooner.
You have questioned the reference in paragraph 13 of IT-352R2 (the Bulletin) to Form T2200 being a prescribed form for certification by citing an example of a similar certification(s) provided for in IT-103R which is not prescribed. You have also asked for clarification with respect to work space related supplies and the application of subsection 8(13) of the Income Tax Act (the Act) restricting the deduction of these expenses.
With regard to Form T2200 we refer you to the definition of "prescribed" found in subsection 248(1) of the Act. In paragraph (a) of that subsection, "prescribed" means, "in the case of a form, information to be given on a form or the manner of filing the form, authorized by the Minister". Form T2200 is the form authorized by the Minister. This requirement is quite different from an employer certification referred to in IT-103R that is prepared by the employer in lieu of issuance of a receipt for union dues that are paid in accordance with provincial law.
"Supplies" as used in subparagraph 8(1)(i)(iii) of the Act is limited to materials that are directly used in the duties of employment plus certain expenses related to a work space in the home. The deduction of the cost of these "supplies" is subject to the filing of Form T2200 certifying that:
-the employee is required by contract of employment to pay for these supplies;
-the employee has not been reimbursed and is not entitled to reimbursement for the cost of these supplies; and
-these expenses may reasonably be regarded as applicable to the earning of income from the office or employment.
Work space expenses which are deductible as "supplies" under subparagraph 8(1)(i)(iii) of the Act consist of a reasonable proportion of expenses paid for the maintenance of the work space such as the cost of fuel, electricity, light bulbs, cleaning material and minor repairs. The deduction of these costs are also subject to the provisions of subsection 8(13) of the Act which was introduced for 1991 and subsequent taxation years to restrict the deduction of expenses in respect of a work space in the home that are otherwise allowable under either paragraph 8(1)(f) or 8(1)(i) of the Act. The last paragraph of paragraph 9 of the Bulletin accurately reflects this provision of the Act wherein it states that only expenses (deductible as supplies) related to work space and not supplies consumed in the performance of employment duties are subject to subsection 8(13) rules.
We also referred to the oral reasons for judgement in the Tax Court Case of Ronald Jenkins vs MNR. This case dealt exclusively with the deduction of automobile and tool expenses. We are therefore puzzled by your reference to this Tax Court decision in respect of "storage expense". We were unable to find details pertaining to the other case referenced in your letter. In any event, based on the limited facts provided, it is the Department's position that equipment storage space in the home does not meet the requirements of subsection 8(13) of the Act for work space in the home for deduction purposes.
We trust these comments will be of assistance to you in clarifying these matters.
Yours truly,
P.D. Fuoco
for Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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