Section 20.01

Subsection 20.01(1)

Administrative Policy

5 October 2012 Roundtable, 2012-0454051C6 F - Déductibilité de cotisations - caisse de sécurité

qualifying contribution made to a PHSP by a self-employed professional via a professionals’ union

Members of a professional union, which is a person whose taxable income is exempt by virtue of section 149, make contributions, by means of source deductions, to a fund used, in turn, by the union to purchase drug insurance coverage for such members. Can a union member (a self-employed person carrying on a business) deduct an amount payable in respect of his or her contribution to the fund, even if it differs from the amount paid by the union to the insurance company for that individual's coverage?

After noting that the contract with the union “must show that the contributions were paid pursuant to a PHSP within the meaning of section 20.01,” CRA stated:

[A] contribution to a plan that qualifies as a PHSP could result in a deduction in computing the income from a business of the individual, who is a self-employed business owner, if all the conditions set out in subsection 20.01(1) were also met and to the extent that such an expense was reasonable in the circumstances.