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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I have been offered a job in Saskatoon that will be for 2 years, I will be provided LOA.
I want to keep renting my current residence here in Alberta but at the same time my family may move along with me to Saskatoon and I have to rent another accomodation over there as well. My Alberta accomodation will be only for me and my family when we visit once a month or so.
Is it officially allowed or I am planning to do something against Canada Revenue Rules and Regualtions. Thanks. Looking forward to reply.
Shah,
You can certainly keep your Alberta residence but you will be a resident in Saskatchewan and will pay tax in that province.
If I am become a resident of Saskatehewan …will I still be elligible for LOA because LOA is live out Assistance. Please clarify. Thanks.
Regards
Hello Shah,
I’m sorry but I’m not sure what LOA means.
My wife has been offered a job in BC but we live in Quebec (unable to get a job in Quebec due to language problems), if she works in BC, can she claim tax deductions for rent and travelling expenses to BC. I work in Quebec.
Hello Anthony,
One cannot deduct the cost of travel to and from work regardless of the distance. If the employment is permanent, and you choose to move to BC, then you will be able to claim moving expenses.
I work in Alberta 3 wks/mth, my family and owned home are in Manitoba. The first 6mths of the year I was provided an out of town expense by my employer, which is included in my income(T4)but was not taxed. The amount covered about 20% of my living costs in Alberta for the year(rent-meals etc). Here’s where I get a little confused-I’m a truck driver, my day begins and ends at my employers physical location but the work is not local-more than 50kms away-often there are hundreds of miles driven in a day.
Does this allow me to claim a portion of my meal and lodging expenses(have reciepts)? And if so would it be along the lines of the long haul trucker or crew deductions?
Does the untaxed living allowance that was included on my T4 income for the 1st 6mths of the year make a difference anywhere??
Any help you could provide would be great
Hello Curt,
Based on my read of your situation, you are a resident of Manitoba for tax purposes. Manitoba is where your principal residence and that is where you pay tax.
You are an employee and not in the “business” of being a long haul truck driver. Therefore, your range of deductions is limited.
The CRA’s document Employment at special or remote locations provides some clarity: http://www.cra-arc.gc.ca/E/pub/tp/it91r4/it91r4-e.html
Generally, the amount paid to you would be taxable regardless of whether your employer deducted tax or not. You may be able to claim the allowance as income and then claim the meals and lodging as a deduction for travel expenses but you will need your employer to complete form T2200.
I teach in Labrador. However this summer, I took a job in Alberta and I will work there throughout the summer break. I will return to Labrador to teach during the latter part of August. I still get payed teachers’ salary over the course of the summer, although currently working Alberta.
Can I claim my plane ticket to and from Alberta to work?
My husband also travels to Alberta for work (although he does not teach). Can he clam his travel expense to work as well?
Thanks, Elizabeth
You cannot claim travel to and from work unless you are required to work away from your company’s normal place of operations.
I am working in British Columbia but live in Alberta. Do I pay BC taxes or Alberta Taxes. Right now BC taxes are being deducted from my pay and was told that I work in BC and have to pay BC taxes.
Hello Rick,
If you live in Alberta, then you pay tax in Alberta regarless of where you work. When you file your taxes, you will disclose your province of residence. If you have an accountant, you might want to hgave him or her write a letter you your employer explaining the rules and requesting that Alberta tax be deducted. You can also ask the CRA for a letter or ruling to provide to your employer.
While I’m not sure what the dollar difference will be, but if the BC tax is higher, you’ll get a refund when you file.
Actually TAX GUY, The CRA website has a publication that says if you work for a BC company in BC you will pay BC taxes. If you work for a BC company in Alberta you pay Alberta taxes. Just look under the forms and publications for income tax.
T4032OC Payroll Deductions Tables – Income tax deductions – In Canada Beyond the Limits of Any Province or Outside Canada – Effective January 1, 2010
“If the employee reports for work at your place of
business, the province or territory of employment is
considered to be the province or territory where your
business is located. To withhold payroll deductions,
use the tax table for that province or territory of
employment.
If you do not require the employee to report for work
at your place of business, the province or territory of
employment is the province or territory in which your
business is located, and from which you pay your
employee’s salary.”
And the case law says if you work in Alberta and live in BC, you pay BC tax.
I will be working in Quebec. However, my family lives in Ontario. I will visit them during the weekend and whenever it is possible. I applied for a health card from Quebec and would like to apply to exchange my driver license in Ontario. My bank account is in Ontario. Should I claim my tax in Quebec or Ontario?
Do you have a spouse and/or dependents in Ontario? If so you pay tax in Ontario.
Your residence is based on where you reside.
I will be taking a full time job in and mving to Alberta in SEPT 09 and will probably just rent an apartment due to the outrageous prices in Fort McMurray; moving a small amount of furnirure from Ontario. I expect to remain in AB for 6-7 years before returning to ON to retire.
My wife and I own a home in Ontario which we will sell within 6-9 months (Approx April 2010) but will downsize to a condo in Ontario (Joint Ownership) c/w most of our furniture etc. where my wife will reside fulltime with our 18 year old son who starts university locally. We will maintain a joint bank account in ON.
My wife has no intention of moving to AB but I will reside there fulltime working for an AB Corpn. complete with AB driver’ licence, bank accounts, etc. I expect to visit ON about of 14-21 days per year .
Regarding residential ties, with this working/residing permanently in AB and retaining joint ownership of a home in Ontario where my wife will be located fulltime….Do I file ON or AB taxes for 2010 and beyond?…thank you
You would normally be considered a resident of Ontario based on the fact your spouse and child reside there. However, you may be dual resident give your significant residential ties and as such may be considered a resident of Alberta.
I am reluctant to confirm or comment on your status further due to liability concerns and the lack of a clear indication of your province of residency. I would ask that you contact the CRA directly with the above facts and request an Income Tax Ruling on your provincial residency status.
I currently live in SK, Will be working for a BC owned company and working in AB. Is there any legal way to have AB taxes deducted? If I get a residence in AB? Do I have to have an AB license? Can I have an interprovincial license?
Thanks.
Hello Chris,
If you live in Saskatchewan, then you pay Saskatchewan’s income tax. If you want to pay Alberta income tax, you will need to move and live in Alberta.
I have no idea what an inter-provincial license is.
My family and I are permanent residence through SINP but I have a job offer to work and live in Alberta. If I have to accept the job, what would be the consequences in our permanent residence. Should I have to file my income tax to both provinces?
Hello Mhel,
This is a legal an immigration question as opposed to an income tax question and I am not in a position to comment or provide any insight on immigration issues.
You might want to try the web boards at http://www.canadavisa.com/canada-immigration-discussion-board/index.php
For tax purposes, you will be a resident of the province you live in If you are in Alberta on December 31, you file Alberta tax.
I reside in Ontario but have been asked to relocate temporarily for a period of 18 months to my company’s Halifax office. I’m single and leaving no immediate family behind (ie: have no spouse or children but my parents and siblings are all still located in Ontario). I have a condo that I own in Toronto and will maintain all of my bank accounts and personal effects in Toronto while I’m away. However, I may rent my condo while I’m away. Will renting versus leaving my condo empty impact my residency status? While living in Halifax, which province should I file under as my province of residence?
Of you rent it, you may be a resident of Nova Scotia.
If I don’t rent out my condo in Ontario (I haven’t done so yet), can I file as an Ontario resident in that case?
As long as the prioperty is available for your occupation you should be able to remain an Ontario resident. However, the CRA may look at other factors to determine residency and it is possible for you to be considered resident in Nova Scotia.
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