Subsection 144(1) - Definitions
Articles
Jack Bernstein, "Employee Profit Sharing Plans", Tax Profile, Vol. 5, No. 23, July 1998, p. 265.
Employee Profit Sharing Plan
Cases
Gary Jackson Professional Corporation v. Canada (National Revenue), 2013 DTC 5108 [at 6082], 2013 FCA 142
The Minister assessed the taxpayer for CPP contributions on income from its trusteeship of an employee profits sharing plan. The trustees'...
See Also
Dimane Enterprises Ltd. v. The Queen, 2015 DTC 1013 [at 64], 2014 TCC 334
The taxpayer's sole director ("Richard"), who ran the taxpayer's business out of his home office, employed his four children, aged 23, 21, 14 and...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Payment & Receipt | payments not received where children "recipients" had no control over funds | 64 |
| Tax Topics - General Concepts - Sham | purported recipients of trust distributions had no control over funds | 242 |
Administrative Policy
11 February 2019 External T.I. 2018-0738561E5 - Employer contributions
Following a corporate restructuring, an employer “closed” its employees profit sharing plan (EPSP) and has not contributed to the plan since...
11 March 2014 External T.I. 2013-0503771E5 - EPSP
Can an employer can make payments into an EPSP after the death of an employee? After noting that "the payments made by the employer are required...
20 June 2001 External T.I. 2001-0086505 F - RPEB - MONTANTS PERDUS
After indicating that where the employee forfeits a conditional allocation of shares and remains a beneficiary under the EPSP, s.144(9) will not...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 144 - Subsection 144(9) | s.144(9) inapplicable until employee ceases to be a beneficiary | 42 |
14 November 1996 External T.I. 9635555 - EPSP EXPENSES REDUCING EMPLOYER CONTRIBUTIONS
A plan established to borrow funds and to invest those funds in the employer's shares likely would not qualify as an EPSP because the employer...
24 June 1994 External T.I. 9413065 - FORFEITURES UNDER EPSP
Forfeitures may be used to reduce the excess of employer contributions otherwise payable over the minimum level of employer contributions required...
19 August 1992 External T.I. 5-922039
Where there is a specific provision in the plan to the effect that the employer payments are to be made "out of profits", it will not be required...
Subsection 144(3) - Allocation contingent or absolute taxable
Administrative Policy
6 February 2019 Internal T.I. 2018-0762101I7 - Ruling request - DSU plan and EPSP
Employees of Employerco and related corporations have been issued share appreciation right (SAR) units, which entitle such Participants to a lump...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Regulation 6801 - Paragraph 6801(d) | conversion of SARs to DSUs triggered immediate inclusion under s. 6(1)(a) or 6(11) | 420 |
| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | use of EPSP trust to synthetically create the equivalent of a s. 110(1)(d.1) stock option plan would be a s. 245(4) abuse | 431 |
13 January 1993 T.I, (Tax Window, No. 28, p. 17, ¶2384)
The employee's entitlements under a profit sharing plan are taxable at the time they are allocated to the employee by the trustee. Accordingly,...
9 April 1992 T.I. (Tax Window, No. 18, p. 9, ¶1856)
An allocation to a non-resident under an EPSP that relates to duties performed in Canada is required to be included in his income.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 144 - Subsection 144(8) | 33 |
IT-379 "Employees Profit Sharing Plans - Allocations to Beneficiaries"
Articles
Elizabeth Boyd, Jeremy J. Herbert, "Trusts Holding Shares For Employees", draft 2023 CTF Annual Conference paper
Use of EPSPs for open market share purchases for small amounts “out of profits” (pp. 17-18)
- EPSPs seem to be used quite frequently to...
Subsection 144(4)
Articles
Elizabeth Boyd, Jeremy J. Herbert, "Trusts Holding Shares For Employees", draft 2023 CTF Annual Conference paper
Flow-through advantage of EPSP (p. 16)
- Unlike employee benefit plans (EBPs), EPSPs are permitted (under ss. 144(4) and (8)) to flow-out capital...
Subsection 144(7) - Beneficiary’s receipts that are not deductible
Administrative Policy
27 October 1995 External T.I. 9516265 - EPSP - NON-RESIDENT BENEFICIARIES
Where an employee beneficiary of an EPSP has become a non-resident of Canada, allocations not required to be included in the non-resident's...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 144 - Subsection 144(8) | 27 | |
| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) | 27 |
Subsection 144(7.1)
Articles
Elizabeth Boyd, Jeremy J. Herbert, "Trusts Holding Shares For Employees", draft 2023 CTF Annual Conference paper
Non-taxable distribution contrasts with EBP (p. 16)
- In the case of an EPSP used to acquire employer shares, s. 144(7.1) permits it to distribute...
Subsection 144(8) - Allocation of credit for dividends
Administrative Policy
27 October 1995 External T.I. 9516265 - EPSP - NON-RESIDENT BENEFICIARIES
The deemed receipt of dividends under s. 144(8) does not cause such amounts to be paid or credited for purposes of Part XIII of the Act.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 144 - Subsection 144(7) | 44 | |
| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) | 27 |
9 April 1992 T.I. (Tax Window, No. 18, p. 9, ¶1856)
The deeming provisions of ss.144(8) and (8.2) do not result in a requirement to withhold Part XIII tax because the amounts are not considered to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 144 - Subsection 144(3) | 25 |
Subsection 144(8.1)
Paragraph 144(8.1)(b)
Administrative Policy
31 January 2018 External T.I. 2016-0676431E5 - foreign tax credit on employees profit sharing
Are foreign taxes allocated from an employees profit sharing plan to an individual on a T4PS limited to 15% for foreign tax credit purposes? CRA...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 125 - Subsection 125(1) | $200 basket for NBIT for which country-by-country reporting is not required includes flow-through EPSP taxes | 153 |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(11) | no s. 20(11) deduction for foreign taxes respecting EPSP income allocated to beneficiary | 107 |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(12) | no s. 20(12) deduction to EPSP beneficiary | 108 |
Subsection 144(9)
Administrative Policy
20 June 2001 External T.I. 2001-0086505 F - RPEB - MONTANTS PERDUS
CCRA indicated that where the employee forfeits a conditional allocation of shares and remains a beneficiary under the EPSP, s.144(9) will not...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 144 - Subsection 144(1) - Employee Profit Sharing Plan | payment to the employer of amounts forfeited by the employee could deny EPSP status | 112 |
Articles
Elizabeth Boyd, Jeremy J. Herbert, "Trusts Holding Shares For Employees", draft 2023 CTF Annual Conference paper
Implications and handling of EPSP forfeited amounts (p. 17)
- By containing specific provisions permitting an EPSP participant to deduct forfeited...
Subsection 144(10) - Payments out of profits
Administrative Policy
19 November 1996 External T.I. 9637345 - RETROACTIVE 144(10) ELECTION
An election under s. 144(10) cannot be filed with effect for previous taxation years.
2 March 1992 External T.I. 5-912899
An election under s. 144(10) is necessary where a plan specifies payments to be made "out of profits". The profits of a non-arm's length...