Covid-19 Medical Expenses: Tax Treatment

Medical expenses eligible for a personal tax credit are limited to those specifically provided for by the Income Tax Act. While an expense may clearly relate to an individual’s health, it may still not be an eligible medical expense. CRA recently provided comments on a number of medical expenses related to COVID-19. Face masks In a February 25, 2021 Technical Interpretation, CRA opined that the costs of a non-medical mask, that is mostly used to protect others from…

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Employees Working From Home During COVID-19: Personal Tax Deductions

Due to the COVID-19 pandemic, many employees worked from home during a portion of 2020. On December 15, 2020, CRA released guidance on two new options available for employees claiming expenses related to working from home on their personal tax return.  While this will clearly impact an employee’s personal tax filing, it should also be considered by employers. A key question employers need to answer is whether they should provide an employer certification in respect…

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Canada Emergency Rent Subsidy: More COVID-19 Support

The Canada Emergency Rent Subsidy (CERS) provides a federal subsidization of expenses associated with both commercial rental payments and property ownership. The program commenced on September 27, 2020 and is scheduled to continue until June 2021. The CERS program parallels the Canada Emergency Wage Subsidy (CEWS) program in that it is largely based on the same revenue decline calculations and related elections. Also, the periods covered by each CERS application are four-weeks in length, and…

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Canada Emergency Wage Subsidy: Public Listing of Applicants

On December 21, 2020, CRA launched the Canada Emergency Wage Subsidy (CEWS) Employer Search, which allows users to search a listing of 340,000 CEWS applicants. The results, which are updated daily, display the legal name, operating/trade name, or business number of corporations (other types of entities are not listed) that have been approved for the CEWS. It does not include the amount received or the periods for which CEWS was received. The search database can…

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OAS Deferral: Undoing and Application

Photo by Tristan Le from Pexels As of July 1, 2013, where receipt of Old Age Security (OAS) is delayed, the monthly pension is increased by a factor of 0.6% for each month deferred, to a maximum increase of 36% (60 months, commencing receipt at age 70). In a March 25, 2020 Federal Court case, the Court reviewed Service Canada’s decision to deny relief to an individual who applied to cancel his OAS pension slightly more than one…

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Contributions of Goods or Services to a Non-Profit Organization: Tax Implications

In a January 6, 2020 Technical Interpretation, CRA considered whether a deduction was available to suppliers who contributed in-kind goods or services to an NPO withthe expectation that they would benefit from word of mouth advertising and promotion. Where the supplier is providing goods or services to an NPO in exchange for advertising and/or promotional services, a barter transaction may have occurred. As such, the typical rules for barter transactions would apply. In arm's length…

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Home Accessibility Renovation Credit: Increase in Home Value?

When applying for the home accessibility tax credit (HATC), valued at 15% of up to $10,000 in expenditures per year, does it matter if the renovation increases the value of my home? Yes, and No. In a December 12, 2019 Tax Court of Canada case, at issue was whether the taxpayer was eligible for a HATC claim for $10,000 of qualifying renovations for the 2016 year, the first year of this credit. The taxpayer’s spouse…

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Reporting Tips for Service Workers
Photo by Stefan Lorentz from Pexels

Reporting Tips for Service Workers

Tips received by servers and other individuals in the service industry are taxable. However, since tips do not show up on T4 slips, some taxpayers are under the false understanding that they are either not taxable, or only partially taxable. In a February 3, 2020 Federal Court of Appeal case, the Court upheld the Tax Court decision that tips received by the taxpayer from his employment as a slot attendant at a casino were properly…

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