Section 125.6

Subsection 125.6(1)

Eligible Newsroom Employee

Administrative Policy

Guidance on the income tax measures to support journalism CRA Webpage 23 December 2019

Reasonable expectation test to 40 weeks

3.15. An eligible newsroom employee (as defined in subsection 125.6(1) of the Act), in respect of a qualifying journalism organization in a taxation year, means an individual who:

  1. is employed by the organization in the taxation year;
  2. works, on average, a minimum of 26 hours per week throughout the portion of the taxation year in which the individual is employed by the organization;
  3. at any time in the taxation year, has been, or is reasonably expected to be, employed by the organization for a minimum period of 40 consecutive weeks that includes that time;
  4. spends at least 75% of their time engaged in the production of news content, including researching, collecting information, verifying facts, photographing, writing, editing, designing and otherwise preparing content (including employees who may be editors, photographers or graphic designers); and
  5. meets any conditions that may be prescribed (currently there are no prescribed conditions).

3.16. Also, an employee who is hired near the end of a taxation year, or who ceased to be employed before the 40-week period expires, could qualify as an eligible newsroom employee in respect of the taxation year provided that there was a reasonable expectation that they would work for more than 40 consecutive weeks.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Qualified Canadian Journalism Organization - Paragraph (b) 146
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Qualified Canadian Journalism Organization - Paragraph (a) - Subparagraph (a)(v) 414
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Qualified Canadian Journalism Organization - Paragraph (a) - Subparagraph (a)(vi) 91
Tax Topics - Income Tax Act - Section 125.6 - Subsection 125.6(1) - Qualifying Journalism Organization 335
Tax Topics - Income Tax Act - Section 125.6 - Subsection 125.6(1) - Qualifying Labour Expenditure 365
Tax Topics - Income Tax Act - Section 125.6 - Subsection 125.6(2) 167
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) 258
Tax Topics - Income Tax Act - Section 118.02 - Subsection 118.02(1) - Qualifying Subscription Expense 112
Tax Topics - Income Tax Act - Section 118.02 - Subsection 118.02(2) 72
Tax Topics - Income Tax Act - Section 149.1 - Subsection 149.1(1) - Qualifying Journalism Organization - Paragraph (b) 188
Tax Topics - Income Tax Act - Section 149.1 - Subsection 149.1(1) - Qualifying Journalism Organization - Paragraph (c) 270
Tax Topics - Income Tax Act - Section 253.1 - Subsection 253.1(2) 148
Tax Topics - Income Tax Act - Section 149.1 - Subsection 149.1(1) - Qualifying Journalism Organization - Paragraph (f) - Subparagraph (f)(iii) 143
Tax Topics - Income Tax Act - Section 149.1 - Subsection 149.1(1) - Qualifying Journalism Organization 175
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Registered Journalism Organization 225

Qualifying Journalism Organization

Administrative Policy

Guidance on the income tax measures to support journalism CRA Webpage 23 December 2019

Overview of requirement

3.7. A qualifying journalism organization (as defined in subsection 125.6(1) of the Act), at any time, means a QCJO [qualified Canadian journalism organization] that meets all the following conditions:

  1. is primarily engaged in the production of original written news content (generally, "primarily" means more than 50%);
    1. as noted above, original news content includes the content for which research, writing, editing and formatting are conducted by and for the organization; and
    2. for the purposes of meeting the conditions to be a qualifying journalism organization, the original news content must be in writing. For example, image, video, or audio, without accompanying text, will not be considered “written content”;
  2. it does not carry on a broadcasting undertaking as defined in subsection 2(1) of the Broadcasting Act;
  3. it does not receive an amount from the Aid to Publishers component of the Canada Periodical Fund in the taxation year in which it seeks to claim the credit; and
  4. it must meet one of the following conditions in the definition of Canadian newspaper, in subparagraph 19(5)(e)(iii) of the Act, if it is a corporation having share capital:
    1. if it is a public corporation, a class of shares of its capital stock is listed on a designated stock exchange in Canada, and the corporation is not controlled by non-Canadian citizens or subjects; or
    2. if it is any other type of corporation,
      • at least 75% of shares having full voting rights under all circumstances and, shares having a fair market value in total of at least 75% of the fair market value of all of the issued shares are beneficially owned by Canadian citizens or by public corporations described in (1).
      • special rules apply when the shares are held, or deemed to be held by another corporation (i.e., other than a public corporation a class of shares of its capital stock of which is listed on a designated stock exchange in Canada) or by a partnership in order to determine who shall be deemed to own those shares of the corporation and in what proportion.
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Qualified Canadian Journalism Organization - Paragraph (b) 146
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Qualified Canadian Journalism Organization - Paragraph (a) - Subparagraph (a)(v) 414
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Qualified Canadian Journalism Organization - Paragraph (a) - Subparagraph (a)(vi) 91
Tax Topics - Income Tax Act - Section 125.6 - Subsection 125.6(1) - Qualifying Labour Expenditure 365
Tax Topics - Income Tax Act - Section 125.6 - Subsection 125.6(1) - Eligible Newsroom Employee 199
Tax Topics - Income Tax Act - Section 125.6 - Subsection 125.6(2) 167
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) 258
Tax Topics - Income Tax Act - Section 118.02 - Subsection 118.02(1) - Qualifying Subscription Expense 112
Tax Topics - Income Tax Act - Section 118.02 - Subsection 118.02(2) 72
Tax Topics - Income Tax Act - Section 149.1 - Subsection 149.1(1) - Qualifying Journalism Organization - Paragraph (b) 188
Tax Topics - Income Tax Act - Section 149.1 - Subsection 149.1(1) - Qualifying Journalism Organization - Paragraph (c) 270
Tax Topics - Income Tax Act - Section 253.1 - Subsection 253.1(2) 148
Tax Topics - Income Tax Act - Section 149.1 - Subsection 149.1(1) - Qualifying Journalism Organization - Paragraph (f) - Subparagraph (f)(iii) 143
Tax Topics - Income Tax Act - Section 149.1 - Subsection 149.1(1) - Qualifying Journalism Organization 175
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Registered Journalism Organization 225

Qualifying Labour Expenditure

Administrative Policy

Guidance on the income tax measures to support journalism CRA Webpage 23 December 2019

Cap per employee but not in aggregate

3.9. The Canadian journalism labour tax credit is a 25% refundable tax credit on the total qualifying labour expenditure incurred in respect of each eligible newsroom employee of a qualifying journalism organization. Qualifying labour expenditures are subject to an annual cap of $55,000 (prorated by the number of days in the organization’s taxation year), per eligible newsroom employee. Thus, the maximum credit available is $13,750 per eligible newsroom employee per year, for qualifying labour expenditure incurred for a period beginning on or after January 1, 2019. Refer to Examples 2 to 4.

3.10. While there is a limit on the maximum tax credit that a qualifying journalism organization can claim per eligible newsroom employee annually, there is no limit on the number of eligible newsroom employees employed by the organization in respect of whom this credit may be claimed. ...

Meaning of salary or wages

3.13. Generally, salary or wages of an eligible newsroom employee means the income from an office or employment and includes amounts paid to an employee such as vacation pay, statutory holiday pay, sick leave pay, and certain taxable benefits (e.g., a corporation’s contribution to its employees’ registered retirement savings plan, group insurance plan).

Treatment of tax credits as assistance

3.19. Generally, assistance includes amounts such as a refund, reimbursement, contribution, or allowance, whether as a grant, subsidy, forgivable loan, deduction from tax, or any other form of inducement. For example, provincial tax credits earned on the same qualifying labour expenditure would generally be considered assistance. Refer to Example 5.

3.20. While the Canadian journalism labour tax credit of a qualifying journalism organization is considered to be assistance that the organization received from a government immediately before the end of the year, it is not considered to be government assistance in the calculation of the qualifying labour expenditure for the purposes of determining the Canadian journalism labour tax credit itself. This means that the Canadian journalism labour tax credit will not be included in “B” in the formula for calculating the qualifying labour expenditure for a qualifying journalism organization. See Examples 2 to 5 where the Canadian journalism labour tax credit was not included in the calculation in the line “Less: Assistance received in respect of (A)”.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Qualified Canadian Journalism Organization - Paragraph (b) 146
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Qualified Canadian Journalism Organization - Paragraph (a) - Subparagraph (a)(v) 414
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Qualified Canadian Journalism Organization - Paragraph (a) - Subparagraph (a)(vi) 91
Tax Topics - Income Tax Act - Section 125.6 - Subsection 125.6(1) - Qualifying Journalism Organization 335
Tax Topics - Income Tax Act - Section 125.6 - Subsection 125.6(1) - Eligible Newsroom Employee 199
Tax Topics - Income Tax Act - Section 125.6 - Subsection 125.6(2) 167
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) 258
Tax Topics - Income Tax Act - Section 118.02 - Subsection 118.02(1) - Qualifying Subscription Expense 112
Tax Topics - Income Tax Act - Section 118.02 - Subsection 118.02(2) 72
Tax Topics - Income Tax Act - Section 149.1 - Subsection 149.1(1) - Qualifying Journalism Organization - Paragraph (b) 188
Tax Topics - Income Tax Act - Section 149.1 - Subsection 149.1(1) - Qualifying Journalism Organization - Paragraph (c) 270
Tax Topics - Income Tax Act - Section 253.1 - Subsection 253.1(2) 148
Tax Topics - Income Tax Act - Section 149.1 - Subsection 149.1(1) - Qualifying Journalism Organization - Paragraph (f) - Subparagraph (f)(iii) 143
Tax Topics - Income Tax Act - Section 149.1 - Subsection 149.1(1) - Qualifying Journalism Organization 175
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Registered Journalism Organization 225

Subsection 125.6(2)

Administrative Policy

Guidance on the income tax measures to support journalism CRA Webpage 23 December 2019

Satisfaction of conditions for portion of year

3.14. An organization that is a qualifying journalism organization at any time in the taxation year generally will be eligible to claim the Canadian journalism labour tax credit for that taxation year in respect of the organization’s qualifying labour expenditures. However, if an organization fails to satisfy one or more of the four conditions, then salary or wages payable to an eligible newsroom employee are only included in respect of the portion of the taxation year throughout which the organization is a qualifying journalism organization. Refer to Example 3. The exception to this being the situation when the organization receives an amount from the Aid to Publishers component of the Canada Periodical Fund at any time in the taxation year. In this scenario, the organization will not be a qualifying journalism organization at any time in the taxation year in which it receives the funds. Therefore in that scenario, the organization’s qualifying labour expenditure will be nil. Refer to Example 1.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Qualified Canadian Journalism Organization - Paragraph (b) 146
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Qualified Canadian Journalism Organization - Paragraph (a) - Subparagraph (a)(v) 414
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Qualified Canadian Journalism Organization - Paragraph (a) - Subparagraph (a)(vi) 91
Tax Topics - Income Tax Act - Section 125.6 - Subsection 125.6(1) - Qualifying Journalism Organization 335
Tax Topics - Income Tax Act - Section 125.6 - Subsection 125.6(1) - Qualifying Labour Expenditure 365
Tax Topics - Income Tax Act - Section 125.6 - Subsection 125.6(1) - Eligible Newsroom Employee 199
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) 258
Tax Topics - Income Tax Act - Section 118.02 - Subsection 118.02(1) - Qualifying Subscription Expense 112
Tax Topics - Income Tax Act - Section 118.02 - Subsection 118.02(2) 72
Tax Topics - Income Tax Act - Section 149.1 - Subsection 149.1(1) - Qualifying Journalism Organization - Paragraph (b) 188
Tax Topics - Income Tax Act - Section 149.1 - Subsection 149.1(1) - Qualifying Journalism Organization - Paragraph (c) 270
Tax Topics - Income Tax Act - Section 253.1 - Subsection 253.1(2) 148
Tax Topics - Income Tax Act - Section 149.1 - Subsection 149.1(1) - Qualifying Journalism Organization - Paragraph (f) - Subparagraph (f)(iii) 143
Tax Topics - Income Tax Act - Section 149.1 - Subsection 149.1(1) - Qualifying Journalism Organization 175
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Registered Journalism Organization 225