Author Topic: Canada specific - CRA - Special work site  (Read 1515 times)

max9505672

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Canada specific - CRA - Special work site
« on: December 16, 2019, 04:25:39 PM »
Hi all,

I am in a pretty particular situation and would need support to make sure I properly understand the taxes requirements for my situation, OR suggestions on which professional to consult on this subject?

So, I work for a company in QC as a Site Supervisor which means my job is to work away from the office for 20 days / month on a work site in BC. I then come back home in QC for 10 days off and then start it over again. My company pays me a daily Living Out Allowance (LOA) for the days I am away (it covers my rent of an apartment in the town where my work site is, my meals, daily expenses, etc.).

I have always been under the impression that those allowances weren’t taxable. This what pretty much everybody I work with is saying, but I feel nobody really dug into it. According to what I found on CRA’s website, everybody might be wrong:

Employee at a Special work site

An employer can exclude from income the value of board and lodging, or the reasonable allowance for board and lodging, if all the following conditions are met:

1) The employee’s duties required them to be away from their principal place of residence.

2) The work at the special work site was of a temporary nature.

3) The employee kept, at another location, a self-contained domestic establishment as his or her principal place of residence which:

Was available for the employee’s occupancy, and the employee did not rent it to any other person; and
Due to distance, the employee could not reasonably be expected to return daily from the special work site.

4) The employee had to be away for a period of at least 36 hours. This period can include time spent travelling between the employee’s principal place of residence and a special work site.

If the conditions are met, a TD4 form (Declaration of Exemption) must be completed. The result is that the benefit is excluded from the employees T4.


My question is regarding point 2) : temporary nature
6. The term “temporary” is not defined in the Income Tax Act. However, as a general rule, duties will be considered to be of a temporary nature if it can reasonably be expected that they will not provide continuous employment beyond a period of two years.

I am supposed to be there for more than 2 years, on and off (20 days in / 10 out). My understanding is that my LOA might be taxable, which makes a big big big difference for me. Do I have the right understanding? Or does the in and out makes it non-continuous?

Reference : www.canada.ca/en/revenue-agency/services/forms-publications/publications/it91r4/archived-employment-special-work-sites-remote-work-locations.html

Thanks

FIRE Artist

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Re: Canada specific - CRA - Special work site
« Reply #1 on: December 26, 2019, 04:36:39 PM »
Not an expert in this, but I think continuous would imply that you are at the worksite for 2 straight years, you are not in this case as you are only there 20 days at a time. If you were posted permanently at the site for 2 or more years, then it would be reasonable to expect you to give up your primary residence, this is not something you can do if you are fly in fly out.