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ITA 8: Deductions from Employment Income

Section 5 contains a definition of employment income.
Section 6 provides detailed information on what amounts
must be included in the determination of employment
income.
Section 7 is a more specialized Section that provides the tax
rules associated with stock options granted to employees.
Section 8 provides detailed information on what amounts can
be deducted in the determination of employment income.

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 ITA 8: Deductions:
All employees may deduct the following if specific conditions
are met. Some need a T-2200 from employer.
• 8(1)(b): Legal expenses to collect wages
• 8(1)(h): Travel expenses
• 8(1)(h.1): Motor vehicle travel expenses
• 8(1)(i): Membership dues, union dues, and, if required,
salary to assistant, office supplies
• 8(1)(j): Interest and CCA on motor vehicles & aircraft
• 8(1)(m): Employee Registered Pension Plan contributions

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ITA 8(1)(h) and (h.1): Travel Expenses
Travel and motor vehicle travel expenses can be claimed
under ITA 8(1)(h) and (h.1) if these conditions are met:
• The employee is ordinarily required, under the contract
of employment, to carry on duties away from the
employer’s place of business, or in different places
• Any allowance received has been included in income
because it was unreasonable
• In addition, interest and any relevant portion of the
capital cost of a motor vehicle or airplane can be claimed.

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 ITA 8(1)(f): Salespersons’ Expenses
• Salespersons may deduct under ITA 8(1)(f) if:
1. They are required to pay their own expenses
2. They ordinarily carry on duties away from the
employer’s place of business
3. They do not receive a travel allowance, OR any travel
allowance received is included in income
4. At least part of their earnings is commission-based

• The employer must sign a form T2200

• This is a complicated area because of choices involved

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 ITA 8(1)(f) or (h) & (h.1)
ITA 8(1)(h) & (h.1)
• Available to all employees with a T2200
• Not limited to Commissions
Can Claim
(h): Travel expenses
• Train, Bus, Plane, Rental Car
• 50% of Meals for Self if away > 12 hours
(no deduction for client meals under (h))

(h.1)
• Business portion of car travel expenses
• Gas, license, repairs, insurance
• Lease payments (up to $900 per month)

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 and ITA 8(1)(i) and (j):
• In addition to the previous expenses, all employees may claim
expenses under ITA 8(1)(i) and (j) if they are required to incur the
expenses by their employer
• These are not restricted by commission income

EXAMPLE

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Copyright © 2023 Strickland
Copyright © 2023 Strickland