Question: “My husband accepted a job that has him living and working in Alberta while our family home is in British Columbia. He rents a hotel by the week while he is working and receives a living allowance from his employer to cover his expenses while he is away. However, the allowance does not quite cover the costs. Will he be able to claim any moving expenses? Will he be able to claim any work expenses over his living allowance? Will he be able to choose his province for taxation?”
These are excellent questions. I’ll address each of the issues in sequence.
Residency
Normally your province of residence for income tax purpose is where you were living on December 31st of the tax year. However, in this case the determining fact will be the location where he ordinarily resides. The determining factor here would be where you reside, the family home is, bank accounts etc. It would appear the province of residence would be British Columbia.
Moving Expenses
Moving expenses are deductible if there is an official move of ore than 40 KM closer to the place of employment. This would involve moving the family home to Alberta near where your husband works.
The Allowance
The receipt of the allowance itself must be included in income as employment income. If certain conditions outlined in the next section are met, then deductions may be claimed for the travel expenses. However, the allowance would not be taxable if it were reasonable and was to cover costs to work away from the location where the employer is normally located.
Travel & Motor Vehicle Expenses
Travel and motor vehicle expenses may be deducted under subsections 8(1)(h) and 8(1)(h.1) of the Income Tax Act respectively. To make a claim under these provisions of the act your husband must meet the following conditions:
1. He must be required to pay his own travel expenses, accommodation expenses, and motor vehicle expenses as well as have a T2200 signed by his employer.
2. He must be ordinarily be required to carry out his duties away from the employer’s place of business.
3. He must not be in receipt of an allowance.
If the first two conditions are met, we could assume that the allowance is not taxable. In this case he may claim that the allowance was unreasonable, add the value of the living allowance to his income, and claim deductions for travel and motor vehicle expenses.
The above assumes that your husbands’ employer is local but he is required to work away from their normal business location. If the circumstances are different then the tax result could be different as well. I would strongly suggest that your husband meet with an accountant in your area to discuss your circumstances.
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My husband is a salaried employee in a company in another province PEI. He works at home in Vancouver. However in 2008 he was required to work in his company in PEI for one month. His employer paid flight tickit and hotel. My husband covered the expenses of his meal. Can he claim meal expenses for that one month? How? He didn’t keep any receipts for meals.
Thank you very much.
@ Dailin,
I can’t say for sure. If he was a salesperson possibly if certain conditions were met. If he was not a salesperson potentially if he was required to pay these expenses and the employer completes and signs form T2200, he must be ordinarily required to work away from his normal place of business, and not have received an allowance or reimbursement for these expenses.
I am working in Quebec but my spouse and kids are living in Ontario, all my bank accounts is in Ontario. Where I have to submit my Income tax return. I always applied as family. Thanks.
@Nomi John
As long as you and you spouse are not separated, then you’d be a resident of Ontario and would file taxes there.
I have stuttering a speech disability and I am going to submit my income tax return and first time going to submit the disability form duly attested from my doctor. I came to know recently that I can get tax credits for this disability. Any suggestions how to file the tax return and how to maximize my benefits. I have less than $11,000 earning last year. I am living in Ontario.
@D. Smith – Once you have your Disability Tax, it’s a matter of claiming the credit on your tax return, Schedule 1, line 316. Give your income level, it is unlikely you will pay tax this year.
I moved to Nova Scotia from Toronto in May 2009 for work. I am renting a place here, but my bank accounts, cottage, and family are all in Ontario. Can I file my taxes there? If I don’t I will end up owing taxes due to the different tax rates per province. Is there any way around this?
Thanks
@Tony – If you are living and working in Nova Scotia, you are probably a resident of Nova Scotia unless you own a home you ordinarily occupy in Ontario.
I am doing a friends income tax for 2009. He is self-employed and works Jan. Feb. March December in Ontario. The rest of the months h e works in Alberta. How do I claim his meals out in Alberta? I have been told he can claim 100% of the total. Do I need to break it down and do 2 business pieces
Hi Elizabeth,
Canada and it’s provinces tax their residents on their worldwide income. While it is possible to be a resident of more than one province during the tax year, generally the province he was resident in on December 31, 2009 is his province of residence for tax purposes (see IT-221R3 to help determine the place of residence – it is written for those who are determining if they are a resident of Canada but the same logic applies to being a resident of a province).
Section 2607 of the Income Tax Regulations (“Regulation 2607″) provides that an individual who is resident in more than one province on the last day of the taxation year is deemed to have resided on that day only in that province “which may reasonably be regarded as his principal place of residence”. The term “principal place of residence” is not defined in the Income Tax Act (the “Act”) or Regulations, however, our interpretative position (as set out in IT-221R3) is that determining “principal place of residence” is a matter of evaluating the strength and number of the residential ties to each province. The “principal place of residence” will be the province where the individual has the most significant residential ties. On the facts set out above, the taxpayer’s “principal place of residence” is probably Alberta for purposes of the deeming rule in Regulation 2607.
In short, he is either a resident of Ontario or a resident of Alberta and he must file provincial returns for one or the other and not both and split them. See IT-221R3 to determine province of residence.
I’m currently working for a company out of Alberta. We have a schedule of 20 days on and 10 days off. On my days off I fly back home to my primary place of residence located in Ontario. I pay for this flight out of pocket and receive no travel pay from my company. Can I claim all my flight expenses on my tax return?
@Rusty:
No. It is the employee’s responsibility to get to and from work … regardless of location. You could claim moving expenses if you moved closer to that job.
I am currently working on a construction site in saskatchewan and I am a resident of ontario.I recieve no travel allowance from either place of resdents,primary or secondary.I do recieve a live out allowance to cover rooms and meals,but can I get a tax break on initial travel or trips home to see wife and kids every so often.Being in the form of wear and tear on the car,and fuel expences.I also belong to a union based in ontario which got me the job out of province.
You can deduct the union dues but not the travel unless it is in a remote part of the country and there are limits. If you moved to SK, the moving costs would be deductible.
I moved from BC to Quebec about 5 years ago an am filing Quebec Tax, I would like to return to BC rent an apartment and commute to Quebec but I own a house in Quebec and my children are schooling in Quebec since I am able to commute back to BC every weekend can I file taxes in BC and since my wife has no income can she file Quebec tax or does she have to file BC taxes. Does my children schooling in Quebec force me to pay taxes there.?
Hello Anthony,
Regardless of where you rent, you are a resident of Quebec and must file and pay taxes there. This is because you own a home in Quebec and your wife and dependent children live there.
I took the opportunity to speak to revenue canada , at first they said to be a resident of a province you have to have a medical card, bank statment and driving licence from that province, I told them thats not a problem, I also told them does having a house in quebec make me unable to be resident of BC they said not at all finally they were stumped and said I dont think it will be a problem as long as on 31 dec you are in BC ?. My children are 21 and 20 and my wife follows me back and forth to BC (work for airline)…
Hi Anthony,
The following link to the interpretation bulletin deals with being a resident of Canada but the exact same rules are applied by the CRA and the courts to determine province of residency. Look at paragraphs 4 through 10. http://www.cra-arc.gc.ca/E/pub/tp/it221r3-consolid/it221r3-consolid-e.html
I would not rely on the comments of a call taker at the CRA. I would obtain independent and paid advice to avoid any headaches or obtain an Advance tax Ruling directly from the CRA.
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