Kim Drever

Maximizing the Northern Residents Deduction

Thursday, February 17, 2011 by Kim Drever

 

For Canadians residing in the North in either a “prescribed Northern zone” or a “prescribed intermediate zone”, there is a special deduction to be claimed when filing their personal income tax returns for certain travel benefits and living costs. There are two parts to this deduction – the basic amount is available to all residents who have lived in prescribed zones for a six month period either beginning or ending in the calendar year, but there is an ability to increase this deduction if the employer provides assistance with travel to certain designated cities in Canada.

All residents of either a “prescribed Northern zone” or a “prescribed intermediate zone” can claim a deduction if they have lived in the zone for a period of at least six months beginning or ending in the calendar year.

This deduction is available for all members in the household.

Who can claim the Travel Component of the Northern Residents Deduction?

When an employer provides a travel allowance to their employees to help defray the costs of travel from their Northern home to their closest designated city, the amount is included in the employees income for the year. The employee can claim a deduction against this employment benefit.

However, to gain access to this deduction, the employee and the employer cannot be related. Therefore, shareholders and others related to the shareholder cannot deduct this additional travel component, even if they receive the travel allowance from their employer.

How much can the employee deduct as the travel component?

The employee can deduct the least of the following amounts:

  1. The value of the allowance received from their employer
  2. The amount of the trip
  3. The lowest return airfare available at the time the trip was made from your home airport to the nearest designated city

We have found that the CRA has a standard amount as the lowest return airfare, and will often dispute the amount claimed. In order to substantiate the deduction, it is suggested to determine the actual airfare for the period of travel, and keep a copy in the event that the CRA disputes the deduction.

How can an employer pay the travel allowance?

The employer would pay the employee a salary PLUS the travel allowance. The employer can pay the employee a reimbursement after the trip, or a set allowance (i.e. – a set amount per hour or a specific annual amount), provided this is detailed in the employment contract. The CRA does not accept that a portion of the salary is the travel allowance, it must be paid on top of the salary.

What are the designated cities?

The designated cities are St. John’s, Halifax, Moncton, Quebec, Montreal, Ottawa, Toronto, North Bay, Winnipeg, Saskatoon, Calgary, Edmonton, and Vancouver

If you have questions on how to maximize the Northern Residents Deduction, please consult your local MNP Tax advisor or contact me and we would be happy to assist you.

Comments:

Sunday, March 25, 2012 - 03:51PM GMT | Jeannine Demers
I live in Grande Prairie, Alberta which is in prescribed zone B. I am slightly confused about the definition of the nearest designated city when making a claim. If I travelled to Lethbridge, AB, the nearest designated city to that location would be Calgary, however the nearest designated city to my home is Edmonton. Which would I use? If I use Edmonton, what would I use for my actual costs - the costs of driving to Lethbridge? Jeannine Demers
Monday, March 26, 2012 - 04:31PM GMT | Kim Drever
The nearest designated city for Grande Prairie is Edmonton meaning you could deduct the least of the following three amounts. 1) The value of the allowance received from the employer (this will be in box 32 of your T4); 2) The actual amount of the trip that you took (actual cost, or using the simplified method explained below - this can be anywhere and is not limited to Edmonton); and 3) The lowest return airfare available at the time the trip was made from your home airport to Edmonton, which is your nearest designated city. In order to calculate the actual amounts for #2 above, you can use either the detailed or simplified method. Under the detailed method, the actual amount of the cost of the trip to Lethbridge would be used for #2. This would involve keeping all your receipts for your hotels, meals, gas, etc. The alternative is to use the simplified method. Under the simplified method you would use the per kilometre rate as prescribed by the CRA for travel costs ($0.53 per km), and a rate of $17 per meal (or $51 per day for meals), plus the actual cost of hotels, and additional expenses. Although your designated city is Edmonton, when calculating the actual amount of your trip for #2, you use the expenses for your trip. In 2011, you will use your trip to Lethbridge to determine the amount for #2. Also, if you take trips to places outside Canada, you would track your actual costs for the amount in #2. Since the amount in #3 above is the lowest return airfare to Edmonton, you will never be able to claim more than the equivalent of the flight from Grande Prairie to Edmonton. We are currently using the limit of $400 per person as the lowest return airfare available at the time the trip was made from Grande Prairie to Edmonton, based on the historical amounts allowed by the CRA.
Wednesday, April 11, 2012 - 11:12PM GMT |
What all factors into being eligible for the additional residency amount? My cousin lives in Whitecourt and I believe he can claim the basic residency amount but not of the other?
Thursday, April 12, 2012 - 02:49PM GMT | Kim Drever
Thanks for your question on the Northern Resident Deduction for the city of Whitecourt, AB. Unfortunately for your cousin, Whitecourt is not in a "Prescribed Northern Zone" or a "Prescribed Intermediate Zone", thus cannot claim the Northern Resident Deduction. To answer your question about the basic deduction and the additional deduction, if the taxpayer resides in a prescribed zone: - Each member of the household can claim the basic deduction OR - One member of the household can claim the basic deduction and the additional deduction Therefore, it is necessary to determine which option makes the most sense for a person living in a prescribed zone.
Thursday, April 12, 2012 - 03:16PM GMT | Anonymous
Hello, I live in Hay River, NT. We would like to deduct a trip we made to Manitoba last year. I flew there with my 2 kids, my husband met us there (by plane) at a later date and we all drove back. I think I will have to use the lowest return airfare available at the time the trip was made from Hay River airport to Edmonton. Is that correct? So that is the only amount I can deduct? And where do I get this information. How do I know the amount allowed by the CRA? Will I be able to deduct this amount for the 4 members of our family? Thanks for the help.
Wednesday, May 02, 2012 - 11:52PM GMT | Anonymous
I live in Fort Nelson, BC. since 2007. 2012 will be the first year I will be receiving a set monthly fuel travel allowance from my employer. In previous years since 2007 I have been reimbursed for actual hotel, meal and fuel receipts. Once a year I travel to Ontario to visit family. Am I able to claim this?
Thursday, May 03, 2012 - 10:50AM GMT |
The allowances you receive from your employer for fuel is a different allowance than the travel component of the Northern Residents Deduction. Here is a brief summary of different types of allowance you can receive, and their tax treatment: If your employer provides you a travel allowance for the Northern Residents Deduction, you could use your trip to Ontario as the actual travel costs, but would still be restricted to the lesser of the amount in box 32 of your T4, and the costs to fly to your nearest designated city (I believe it is Vancouver for you), and the costs for your trip to Ontario. It sounds like you are receiving a travel allowance to perform your duties of employment. If you are receiving an allowance for fuel for work travel and you don't have to support the actual costs to your employer with receipts, then the amount is taxable on your personal tax return, and you can claim your actual costs against it, provided your employer signs a T2200. If you receive an allowance based on a per kilometre amount for work travel on your personal vehicle, it is not taxable if it is a reasonable per km rate. If you receive a living allowance (often called "subsistence" in the oil and gas industry) for travel, accomodations and meals while travelling away from Fort Nelson, this is not taxable if it is a reasonable amount, and you must pay all of the costs of the travel.
Thursday, May 03, 2012 - 11:05AM GMT | Kim Drever
With respect to the question from Hay River, if the costs of your trip to Manitoba are higher than the lowest cost of a return flight to Edmonton from Hay River, your travel component of the Northern Residents Deduction will be restricted to the cost of return flights to Edmonton for your family or the amount in box 32, whichever is lower. Unfortunately, I don't have details on the cost of the lowest return flights from Hay River to Edmonton for the time of your travel. If you know the amounts from past travel, or can speak to people in your area that also claim the travel amount, perhaps they will have an amount for the return flight. As a suggestion, for your travel in 2012, I would print off the costs for the return flights to Edmonton from Hay River for the time of your travel so you have an amount to use when filing your 2012 personal tax returns.
Wednesday, May 16, 2012 - 02:52PM GMT | Bonnie
I live in Iqaluit, Nunavut and would like to know the lowest return airfare amount I can put on my trip form for Iqaluit to Ottawa.
Sunday, May 20, 2012 - 07:57AM GMT | Emily
Hello, My employer has provided the travel allowance for the Northern Residents' Deduction. Can each member of my family claim two trips or just me? I am the only one who received the travel allowance. Can I claim expenses for all members of my family if we all travelled together? For example would the meal allowance be $51 x 4 people? Also, I do mystery shopping. Some expenses such as purchase of meals or gas are expenses. Can I deduct the expenses and just claim amounts for completing the job? What about other expenses such as gas? I also have a home business. What expenses am I allowed to claim? I have done it where I count the number of rooms in the house and then calculate a portion of the utilities and taxes. Is this correct?
Monday, May 21, 2012 - 02:34PM GMT | Kim Drever
Hi Bonnie - I suggest you find the lowest return airfare to your nearest designated city from checking with airlines. The designated cities for Nothern Travel Allowances are: St. John's, Halifax, Moncton, Quebec City, Monteal, Ottawa, Toronto, North Bay, Winnipeg, Saskatoon, Calgary, Edmonton and Vancouver. For travel from Iqaluit, please determine which city is nearest you - either Quebec City, Montreal or Ottawa. Then, you will be required to determine the cost of an airline ticket from your nearest airport to that city for the Northern Travel Allowance.
Monday, May 21, 2012 - 02:40PM GMT | Kim Drever
Emily, With respect to the question on the Northern Resident Deduction, you are entitled to claim on your personal tax return 2 trips for each member of your family. Each member of your family will not claim this on their T1. Bear in mind the amount will be limited to the least of the following amounts: 1) The amount your employer puts on your T4 in box 32 as the Northern Travel Allowance 2) The cost of return flights to Edmonton (Please note I have assumed you live in Alberta) from your nearest airport. For instance if your nearest airport is Grande Prairie, you would claim approximately $400 per person for two trips a year 3)The actual costs, on either the actual total or the simplified method. If you use the simplified method, you would calculate the kilometre rate and the meals as $51 per day x 4 people plus the actual hotels. For actual amounts, this would be based on your receipts for fuel, hotels, and meals. As far as your other issues, if your employer provides you with an allowance or repays your costs, they are not deductible on your T1. If your employer provides you with a signed T2200 for expense they require you to pay for these expenses to complete your duties of employment, then you can claim certain expenses on your T1, but only if your employer signs the form that they require you to personally pay for the expenses. For your home based business, you should see an accountant on this issue in order to get the best advice. There are many intricacies depending on the business, the types of expenses, your personal tax issues, your personal income, etc. I suggest you discuss your personal tax issues with an accountant who works with personal taxes one on one.
Thursday, June 28, 2012 - 11:55PM GMT | Anonymous
The company that completed my tax return used the simplified method to claim our travel expenses for our northern residents travel claim. We have sent this completed form(itinery of travel) along with our T2222 forms, plus T4's to Revenue Canada, who are now asking for receipts. according to their website, if you use the simplified method you do not need to keep detailed receipts of travel, but they may still ask for some documentation as proof of travel. Is the simplified method form/itinery of travel enough documentation for proof of travel. They are now asking for more proof, but according to their website we are not required to keep receipts? Can they now ask for receipts, when their website says you don't have to keep them? fortunately we do have receipts, but I feel like they are going against what they say in their website?
Tuesday, July 03, 2012 - 09:46AM GMT | Kim Drever
Thanks for your question. Under the simplified method, you are not required to keep receipts to prove your expenditures. The CRA may however request proof of travel, which they have done in your case. Generally in circumstances like these, the CRA is looking for a few receipts to prove that you did spend time in the location in which you claimed travel. As an alternative to receipts (if you did not have them), the CRA will generally accept a credit card statement showing a purchase in the designated city (i.e. for a gas purchase, meal, etc.).
Thursday, July 19, 2012 - 03:38AM GMT | Patsy
Is there a limit on the number of hotel nights per trip? We are driving from Fort McMurray to Vancouver with a couple of stops along the way in each direction. The trip will be about 10 days in total; what can we claim?
Thursday, July 19, 2012 - 08:55AM GMT | Anonymous
From Fort McMurray, your nearest designated city is Edmonton meaning you could deduct the least of the following three amounts: 1) The value of the allowance received from the employer (this will be in box 32 of your T4); 2) The actual amount of the trip that you took to Vancouver (actual costs of hotels, meals, fuel, or using the simplified method explained in an earlier response); and 3) The lowest return airfare available at the time the trip was made to Vancouver (determine the price from your home airport to Edmonton, which is your nearest designated city). If your trip is 10 days and there are hotels used, this will likely be the greatest of the three numbers. The amount you can claim as the travel portion of the Northern Resident Deduction is the LEAST of the three numbers. Safe travels.
Tuesday, August 21, 2012 - 04:54AM GMT |
The company I work for allows two times the travel money for single people than individuals who have a spouse and/or children. Do I still have to write this money off in two trips or can it be more?
Tuesday, August 21, 2012 - 06:50PM GMT | Kim Drever
In response to your question, you are entitled to deduct only two trips a year on your income tax return. The amount you can deduct will be the least of 1) The value of the allowance received from the employer (this will be in box 32 of your T4); 2) The actual amount of the trip that you took (actual cost, or using the simplified method explained in earlier responses - this can be anywhere and is not limited to your nearest designated city); and 3) The lowest return airfare available at the time the trip was made from your home airport to your nearest designated city. This is for the number of members of the household. For instance, if there are two members in the household, this amount will be for two flights. The fact that your employer pays different allowances for employees depending on their marital status does not change the number of trips that can be deducted when completing your personal tax return.
Saturday, September 29, 2012 - 06:55PM GMT | jarrod
i have a question about the lowest return airfare. if i am claiming a trip where myself and my wife and 2 kids go, do i only write down 1 airfare or would it be 1 airfare for each family member that took the trip
Tuesday, October 16, 2012 - 11:34AM GMT | Kim Drever
The lowest return airfare will be for each member of the family. If 4 members of your family travel, then you will use lowest return airfare price x 4 people. Make sure you keep details on the price of the tickets, and they are the lowest return airfare. The CRA is known to challenge the amounts for this when assessing your personal tax return. I suggest you keep the printouts from Air Canada and Westjet on the ticket prices that are available for the round trip ticket from your nearest airport to the nearest designated city (ie - Edmonton) at the time of your trip to substantiate the amount claimed.
Wednesday, January 02, 2013 - 05:11PM GMT | Anonymous
Hi, I'm a little confused about who can claim the basic and additional amount. If there are two people in a household, can they both claim the basic amount and then one person can claim the additional amount (let's say we have a a renter and an owner)? Or, is the case where only one person can claim both the basic & additional amount and the other person can claim nothing?
Tuesday, January 08, 2013 - 07:50PM GMT | Heather Hilhorst
The deduction works in a way that one person in the household can claim both the basic amount and the additional amount, or each person in the house can claim the basic amount. In your example, each of the two people could either claim the basic amount, or one person could claim the basic and the additional amount (and the other person would claim nothing).
Friday, January 11, 2013 - 03:39PM GMT | GWB
My company provides the northern travel allowance. I have been told that I am not able to get this allowance for 2012, because they cannot simple allocate a portion of my salary as a travel allowance. Is this in fact true or is there some way a portion of my salary can be deemed a travel allowance after the fact if both parties agree?
Friday, January 11, 2013 - 06:03PM GMT | Kim Drever
According to the CRA, It is necessary to pay a Northern Travel Allowance in addition to the employment income. If the Northern Travel Allowance is simply a re-characterization of employment income (with no additional amount paid for it), then it would not be eligible for the Northern Travel Allowance. They have also stated that where the facts do not support the intention that a part of the compensation was for Northern Travel Allowance, then the amounts paid would not be considered to be Northern Travel Allowance. If you attempt to back-date the employment contract and move a portion of the wages to be Northern Travel Allowance, this would not be acceptable to the CRA. This is for situations where the employer recognizes the importance of the travel and pays an amount to their employees over their salary for the Northern Travel Allowance, that the employee would be eligible for the travel component. If this is the situation, then the employer and employee should agree to the Northern Travel and be clear this is not part of the remuneration.
Wednesday, January 16, 2013 - 07:22AM GMT | Martin
I live in PEI. I started working in Fort McMurray on August 1, 2012. Camp rotation 20/10. (Food and lodging paid for by employer. Can I claim Northern Living Allowance? At the time I file my return I'll have been working there well over six months, or do the six months have to be in the same calendar year? If employer pays zero airfare subsidy, can I still claim my airfare? They are talking about paying us a small travel subsidy every 3 months - is there a minimum amount they are required to pay? Is there a cap on the number of flights I can claim? I fly round-trip 12 times a year. Thank you!
Wednesday, January 16, 2013 - 10:52AM GMT | Kim Drever
Hi Martin - I see that you actually are asking questions about a couple of different topics. With respect to the Northern Living Allowance, you do not reside in the North, thus are not eligible for the allowance. This is not an allowance for people travelling into remote work sites and living in camps, but for people that have made their home in Northern communities. Your questions on the allowances for travel (which are not part of the Northern Living Allowance Travel benefits) are more complex, and I suggest you see your accountant on what you can claim, as it will depends on the facts of your case. For instance, if the allowance is for travel it will be taxable, but if for board & lodging and travel (which it does not appear to be as they provide you the camp), there may be exemption for special work sites if you meed the conditions. Please note, your employer is not obligated to pay any of your travel costs from your home in PEI to Fort McMurray.
Friday, February 15, 2013 - 09:45AM GMT | Jennifer
Thank you for all of this information! I have a quick question about my eligibility for the allowance. I was working as a teacher (paying rent in a single residence) in Zone B last year from January 24 - June 30. It's not quite a full 6 months so I wasn't sure if I was eligible, do you know if CRA look at exact dates or if they go by calendar months? Thanks!
Friday, February 15, 2013 - 10:27AM GMT | Kim Drever
Thanks for your question Jennifer. Unfortunately, in order to be eligible for the Northern Residents Deduction, it is necessary to live in the prescribed zone for a period of six consecutive months. Since you were not in the prescribed zone for six consecutive months, you would not be eligible for the deduction. January 24 - June 30 is not six consecutive months, but 5 consecutive months plus 6 days.
Friday, February 15, 2013 - 02:31PM GMT | Melissa
I would just like some information regarding lowest possible airfare. Since we did not fly, we don't have a intinerary with cost etc. for our trips we will be deducting. Can you please tell me what amount is considered appropriate right now for lowest airfare in 2012 from Grande Prairie to Edmonton and also from Grande Prairie to Calgary? Thanks.
Friday, February 15, 2013 - 09:09PM GMT | Matt
Hi, I work and live in Nunavut and receive a Norther Living Allownace on top of my base salary. Is the Northern Living Allowance considered or partially considered to be a taxable travel benefit? The reason for the question is to determine my eligability for the northern travel deduction. If in fact it was considered a travel benefit, would it then be reported on box 32 of my T4? Thanks!
Tuesday, February 19, 2013 - 10:33AM GMT | Kim Drever
Hi Melissa In Grande Prairie, your nearest designated city is Edmonton. As such, the return flights to Edmonton are the amounts that you will have to consider (not Calgary). Since you did not keep a printout of the lowest return airfare for Westjet and Air Canada to Edmonton for the dates of your travel, you will have to use an estimated amount. If I were you, I would check the internet for return flight prices and print them out to support the amount that you are claiming. While this is not accurate for the dates of your travel, this will provide an estimate that is reasonable for your claim. The CRA will have amounts they are considering reasonable based on their research, but I do not have access to their numbers. The CRA may disagree with the number you use and re-assess your claim using their researched flight prices.
Tuesday, February 19, 2013 - 10:38AM GMT | Kim Drever
Thanks for your question Matt. The Northern Living Allowance that you receive from your employer is a taxable benefit. However, you are allowed to claim an offsetting deduction for the travel subject to the restrictions that I mention in the blog above, if your employer includes an amount in box 32 of your T4.
Tuesday, February 26, 2013 - 01:02PM GMT | Dave
Can only 2 people in the household claim the basic amount for the Northern Residence Allowance? I have a 17 year old who works part time - can he also claim the NRA??
Wednesday, February 27, 2013 - 01:19AM GMT | Martin
Hi there, Can I claim my vacations that I took in 2012, I live in Fort St John BC zone B. My family and I took two vacations in the 2012 season, can I claim those? They where not related to work.
Saturday, March 02, 2013 - 05:15PM GMT | Gus
I worked for the Northern Nunavut from Jan 1, 2012 until September 30, 2012 (275 days) and then I left this job and moved to Edmonton is search of new work. Unable to find new work in my field, I applied and received EI until the end of December 2012. Question: For 2012 tax year, am I considered to be resident of Nunavut or Alberta? Do I still qualify for 2 trips out which I took in April 2012 and August 2012?
Saturday, March 02, 2013 - 11:19PM GMT | Kim Drever
Hi Gus You will be a resident of Alberta for tax purposes, as this is where you resided at the end of 2012. Also, when you have your tax return completed, be sure to give your accountant the dates of when you lived in the prescribed Northern zone so you can claim the Northern Resident Deduction for the period of time you lived in the North.
Monday, March 04, 2013 - 12:00PM GMT | joseph chacko
HI I have rented my basement(legally devoloped basement for renting purpose) and my tenant would like to claim both basic and additional amount. since it is a seprate dwelling unit,can we both claim for basic and additional amount? Thank you, Joseph
Monday, March 04, 2013 - 04:06PM GMT | CB
Hello Kim, Can you claim more than one trip per year? I heard you could do 2 per person per year..? Also can more than one person per household claim northern living? (ie. homeowner and renter) thanks
Monday, March 04, 2013 - 10:42PM GMT | Todd
Hi. This is the first year my wife and I are able to claim Northern travel deductions. We were not aware that we had to aquire a last minute rate quote from the airline during the dates of our trips to prove this. So, we don't have any idea what to claim or how to prove it. Is there any way to find out what rates CRA is currently using for deduction purposes Whitehorse to Vancouver? Thank you
Tuesday, March 05, 2013 - 12:51PM GMT | Kim Drever
Hi Chris - It is possible for more than one person in the house to claim the Northern Residents Deduction. As long as each individual in the house only claims the basic portion of the deduction, multiple people can make the claim (i.e. the home owner and renter / home owner and spouse / home owner and spouse and renter, etc). If an individual in the house claims both the basic and the additional deduction, only one person in that household can make the claim. Generally when an audit is performed, the CRA requests proof of address (i.e. a utility bill) to prove that you lived in the Northern zone for the year. With respect to the question on trips, please note that in order to claim the two trips as Northern Travel, you must have a number in Box 32 on your T4 slip from your employer. If there is an amount in this box, you can claim up to two trips for each member of the family. The claim would be calculated as the minimum of the following: 1)Amount in Box 32 2) Lowest available airfare to Edmonton (which is considered to be Grande Prairie's prescribed city) 3) Actual travel expenses
Tuesday, March 05, 2013 - 12:56PM GMT | Kim Drever
Hi Todd - I don't know of any way to find out what numbers the CRA is using for the lowest return flights. If you are using an accountant in Whitehorse, they will likely have a number to use. If you are filing your own return without the assistance of a professional, a good starting point would be to print off current flight details for the fares . If the CRA questions your numbers, you at least have a good starting number for your discussions.
Tuesday, March 05, 2013 - 01:05PM GMT | Kim Drever
Hi Joseph - If your basement is a legally developed basement apartment with separate address, separate utilities, etc., it would be considered a separate dwelling, and each of you and your tenant would be able to claim the basic and the enhanced portion of the Northern Residence Deduction. However, if you are on the same utility meter and have the same address, the CRA will likely question it. Your tenant would need to show utility bills, etc in their name if CRA questions their Northern Residence Deduction. Regards, Kim
Tuesday, March 05, 2013 - 01:10PM GMT | Heather Hilhorst
Hi Dave - The Northen Residence Deduction is not limited to two people in a household, but is available to individuals that have lived in a prescribed Northern zone for a continuous period of six months. As such, your 17 year old son can claim the deduction as well. Regards, Heather
Tuesday, March 05, 2013 - 01:14PM GMT | Kim Drever
Hi Martin in FSJ - thank you for the question on whether the trip must be work related. For the Northern Travel deduction, there is no need that the trips be related to work. As long as your employer pays you an amount in box 32 of your T4, you can claim up to two trips in the year for each member of the family. The amount claimed will be limited to the least of: 1) The amount in box 32 of your T4 2) The amount of the return flights from FSJ to Vancouver 3) The actual amount of the trip (flights, hotels, meals). The value of the return flight from FSJ to Vancouver is likely going to be the lowest amount, thus will be the amount you can claim.
Tuesday, March 05, 2013 - 01:21PM GMT | Angela Grimm
If you are a resident of Zone A, and you are a teacher, if you leave to travel for the summer, are you allowed to claim $51/day for meals? What if you own a residence where you are spending the summer? I am considered a resident of the NT...
Tuesday, March 05, 2013 - 06:02PM GMT | Kim Drever
Hi Angela - thanks for your question on the simplified method for tracking meals. When you take the vacation from the North, you can calculate the actual costs of your trip using actual receipts or a simplified method. The simplified method is $17 per meal and a per kilometre rate for automobile travel. You will need to determine the lesser of the following amounts 1) the amount in box 32 of your T4; 2) the actual costs of the trip; and 3) the lowest return airfare to your nearest designated city. You will only be able to claim the lowest of these three amounts.
Saturday, March 16, 2013 - 05:32PM GMT | Sandra
Hi Kim, I never learned about two trip deduction per year when claiming Northern LA till recently. My husband and I reside in Dawson Creek, BC. We each claim the NLA as it seems to work out better for both of us when doing so. My employer puts an amount in Box 32 of my T4, but his does not. We took 3 trips last year. 2 were to Hixon, BC, near Prince George,BC. And 1 was to Edmonton in order to fly out to Cancun for vacation. The questions I have are: 1. Since only I have the deduction in Box 32, does this means only I can claim any trips. 2. Since Prince George is not listed as major city, but 5 hours away, can this trip be claimed. Also, I am a shareholder, very few, but does that now disqualify me from claiming trips at all.
Saturday, March 16, 2013 - 06:20PM GMT | Kim Drever
Thanks for the question Sandra. Since you took three trips last year, you will be able to claim for two on your personal tax return, but since your husband does not receive an allowance from his employer, he cannot claim any trips. You can claim the lower of the three amounts 1) the amount in box 32 2) the actual costs of trips taken and 3) lowest return airfare from Dawson Creek to Vancouver. When calculating the actual costs of the trip, there is no need that the trip be to a designated city, thus, you should choose the two trips that were the most expensive. Since you travelled to Cancun in 2012, use this as one of the trips (if you drove to Edmonton and flew from Edmonton to Cancun, use the travel to Edmonton plus the trip to Cancun when calculating the actual costs). For the trips to Hixon, BC., figure out the actual costs of the more expensive of the two and use this for the actual costs for trip #2. You will likely find that the return airfare will be the lowest amount. Also, in order to be eligible for this, you must be dealing with your employer at arm's length, which normally means that you do not control the company and are not related to anyone that does have control. If you are a very minor shareholder, it is likely that you are still dealing at arm's length.
Monday, March 18, 2013 - 05:05PM GMT | Anonymous
Hi Kim My wife and I live in the NWT and both receive Northern Travel Allowance, her from GNWT and I from my employer. My question is, if she claims two trips for each of us with her benefit, can I also claim additional trips with my benefit? Thanks
Monday, March 18, 2013 - 06:57PM GMT | Kim Drever
Each of you and your wife receive an amount in box 32 from your employers, thus you can each claim 2 trips in the year for the family. As such, on a combined basis, you can claim a maximum of 4 trips in the year.
Tuesday, March 19, 2013 - 11:55AM GMT | Barbara
Hi Kim, I have been calling Revenue Canada to ask this question, but cannot get through. I am wondering what dates to put for the Northern Living? Do i put September 21, 2008 (the date i started living in Grande Prairie, Alberta) and December 31, 2012 as that is the last date of 2012? Or do i put January 1, 2012 to December 31, 2012? I can't seem top find out this information no matter where I look. Also when entering the travel claim for Northern living do I put the amount of $8400 from my t4 for travel on each line for the 2 trips that the 3 of us in our family took in 2012 or do i divide up the $8400 for each person in our family? I hope I explained this okay. Thank you so very much.
Wednesday, March 20, 2013 - 11:05AM GMT | Kim Drever
I assume by your questions that are you trying to complete your return on your own. If you have trouble with this, you might want to see an accountant to help file your returns. You would enter the period in the prescribed zone as January 1, 2012 - December 31, 2012.
Tuesday, March 26, 2013 - 10:07AM GMT | Casey
Hi Kim. My husband and I own a house in Peace River, AB. I think this is ZONE B. He has taken a 2 year temporary job in Whitehorse, YK. I think this is ZONE A. While in Whitehorse, he is living in our trailer and I am living in our Peace River house. He has a general delivery mail address in Whitehorse. Can we both claim a residence? Can we claim either residence? He only comes to visit me 2/3 times per year and I go there about once every two months. What would be our best claim?
Tuesday, March 26, 2013 - 10:10AM GMT | Kim Drever
Hi Casey - your question is very specific, thus I suggest that you see an accountant to prepare your returns. Our Peace River office would be able to help you.
Tuesday, March 26, 2013 - 10:17AM GMT | Kim Drever
For readers that ask specific questions on how to file your returns, please note there are many complexities that must be considered. Therefore, I suggest that you seek the assistance of an accountant to help with filing your returns. In the Northern cities, we have offices in Peace River, AB; Fort St John, BC; Fort McMurray, AB; and Grande Prairie, AB. Kind regards, Kim
Tuesday, March 26, 2013 - 09:36PM GMT | Scott
Very useful info. Pretty much any normal question can be answered with a quick read thru the above. Thank you very much for sharing your knowledge. I certainly appreciate it!! Scott in Peace River
Sunday, March 31, 2013 - 04:51PM GMT | Anonymous
My spouse and I live in two different zones based on our employment since January 1, 2012. We both live in these zones full time. My understanding is that we can both make the basic claim for northern residency in Alberta for the zones in which we live in. Can I claim the additional northern residency for our 14 year old dependant that lives with me full time?
Monday, April 01, 2013 - 10:47AM GMT | Kim Drever
Good morning In response to your blog query, your husband and you can each claim the basic amounts for the separate zone provided you actually live in separate zones. However, I anticipate that CRA will audit the Northern Residence on your returns as your husband is in a different zone than you. You will likely need to each have utilities for the addresses you are claiming in your name, or a specific rental agreement or something along those lines to substantiate the claims. You must reside in the zone, not just work in the zone - for instance, if he is in a camp in the zone, that would not be residing in the zone. There are many questions that must be answered between your husband and your situation and returns prior to considering what to do with your son's claim. Since your return has become complex, I would advise that you seek professional assistance from a CA in preparing your personal tax returns this year.
Monday, April 08, 2013 - 12:11PM GMT | Lisa Thomas
My husband lives in Edmonton but works on a 2 weeks away 2 weeks home rotation. He works north of Fort McMurray for Finning and stays in a camp. They used to pay for travel and camp and now he pays for it. He drives back & forth. Can we somehow claim box 32 (Travel in a prescribed zone) and box 30 (Board & Lodging) on our taxes? Also on his pay stub in his earning they have a taxable benefit amount. Thank you so much.
Tuesday, April 09, 2013 - 09:50AM GMT | Kim Drever
Thanks for the question Lisa. Your situation is very fact specific and more information is required. I would be pleased to refer you to an accountant in our Edmonton office to help you complete your personal tax returns so that each of the items is dealt with appropriately. Kind regards, Kim
Friday, April 12, 2013 - 10:06AM GMT | marnie
Hi, My step son worked in Ft.St.John from August 1,2011 to March 2012. Being that it was two seperate years, but 6 consecutive months,could he still qualify? I am assuming not, but just wanted to be certain before filing.
Friday, April 12, 2013 - 10:45AM GMT | Kim Drever
Hi Marnie - thank you for the question. As noted in my blog, a person can claim the deduction if they have lived in the zone for a period of at least six months beginning or ending in the calendar year. There is no requirement that all six months be in the same calendar year.
Sunday, April 14, 2013 - 04:36PM GMT | Anonymous
Hi - My employer provides a lump sum for the year, but I made 2 trips. Do I split the amount from box 32 across the two trips?
Sunday, April 14, 2013 - 08:42PM GMT | Kim Drever
Yes, the amount in box 32 gets split between the two trips.
Thursday, April 18, 2013 - 03:49AM GMT | Kash Hussain
Hi Kim, No doubt Very useful info. I did tried to read most of the questions above to get my answer but I am still bit confuse. For last few years I live in Whitehorse YT and I have 4 kids. My wife is not working. I get travel allowance from my employer and it is showing on my T4, column 32. Last year (2012) I made 2 trips, one trip was with my family to Anchorage Alaska (USA) and 2nd trip myself only alone to Pakistan from WH to Calgary to Montreal and then Pakistan. I would like to know that (1) since Pakistan and Alaska are not designated places so Am I eligible to apply basic or additional deduction? (2) Can I claim basic deduction and the additional deduction both with only basic deduction for whole family and additional deduction only for me? or should my all family members just claim only basic deduction because my whole stayed in North for whole year?
Thursday, April 18, 2013 - 10:15AM GMT | Kim Drever
Good morning Kash, The travel allowance and the basic / additional deduction are two separate things that must be considered separately when filing your personal tax return. For your travel allowance, you could deduct the least of the following three amounts. 1) The value of the allowance received from the employer (this will be in box 32 of your T4); 2) The actual amount of the trip that you took (actual cost, or using the simplified method explained below - this can be anywhere and is not limited to your nearest designated city); 3) The lowest return airfare available at the time the trip was made from your home airport to Edmonton or Vancouver, whichever is nearer to Whitehorse (this would be your nearest designated city). In order to calculate the actual amounts for #2 above, you can use either the detailed or simplified method. For the first trip, you would record the costs for the trip to Alaska for you, your wife, and your four children. For the second trip, you would record the costs of your trip to Pakistan. Under the detailed method, the actual amount of the cost of the trips to each of Alaska and Pakistan would be used for #2. This would involve keeping all your receipts for your hotels, meals, gas, etc. The alternative is to use the simplified method. Under the simplified method you would use the per kilometre rate as prescribed by the CRA for travel costs ($0.53 per km), and a rate of $17 per meal (or $51 per day for meals), plus the actual cost of hotels, and additional expenses. Although your designated city is Edmonton or Vancouver, when calculating the actual amount of your trip for #2, you use the expenses for your trip. Since the amount in #3 above is the lowest return airfare to Edmonton / Vancouver, you will never be able to claim more than the equivalent of the flight from Whitehorse to your nearest designated city. Either every member of the household can claim the basic deduction OR one member can claim the basic and additional deduction. The allocation of how to claim this must be done by considering the net amount of tax the family pays under each of the options. Since your wife does not work, she likely does not have any income. If your children do not work, you will claim both the basic and additional deduction as this will maximize your claim. If your children work, you will need to analyze which is the best result.
Monday, April 22, 2013 - 12:39AM GMT | Anonymous
There are 2 taxpayers in our household: me and my husband. Our family went on 2 vacations to the US and 2 vacations to Alberta in 2012. 1) For the 2 vacations to the US, we drove from Fort St. John to Edmonton, stayed a night at the hotel, then we traveled by air from Edmonton to the US the following day. Then coming back, we traveled by air from US to Edmonton, stayed a night at the hotel and drove back from Edmonton to Fort St. John. Are the said 2 vacations to the US considered 2 trips, even though we drove from Fort St. John to Edmonton? Can I claim both my vehicle mileage for the drive and the air travel fare? Can I (Taxpayer 1) claim the amount for the 2 US Vacations? 2) Can my husband (Taxpayer 2) claim the other 2 vacations to Alberta? Thank you Kim.
Monday, April 22, 2013 - 12:25PM GMT | Kim Drever
Thanks for your question. This question has been previously answered if you review the comments on this blog. The travel allowance is the LEAST of the following three amounts: 1) The value of the allowance received from the employer (this will be in box 32 of your T4); 2) The actual amount of the trip that you took (total the actual cost of the trip - kilometres, flights, hotels, meals, etc. etc. - this can be anywhere and is not limited to your nearest designated city); and 3) The lowest return airfare available at the time the trip was made from your home airport to Vancouver (this would be your nearest designated city). You will need to ensure that you are maximizing the claims between you and your husband by ensuring that the total costs of the trips on his return are also at least the amount of the return airfare from FSJ to Vancouver. Tara in our FSJ office would be happy to file your personal tax returns.
Friday, April 26, 2013 - 10:33PM GMT | DrewBeDo
Hi Kim Moved to Lutsel K'e, NT in Nov 2012 and my family joined me last month. Work for a First Nation (I am non-status myself) and am interested to know whether I qualify for a northern living allowance; and if so how much. Nothing appears on my paystub and the total deductions seem high. Also curious whether my wife and daughter's trip south to Vancouver - our previous home - next month (for her graduation) can be claimed for a tax deduction. Thanks in advance for your assistance...Graeme
Saturday, April 27, 2013 - 04:43PM GMT | Kim Drever
Hi Graeme, thanks for your question. You can record the Northern residence deduction if you have resided in a prescribed zone for a period of at least 6 months beginning or ending in the year. Therefore, the answer to your question is entirely dependent on when in November you moved to the NT. If it was the beginning of November, then the six month period ended at the beginning of April and you would be able to claim as you lived there for 6 months by the time you filed your return. There are two parts to the Northern Residence deduction - there is a portion you get for residing in the prescibed zone (the basic and enhanced deductions), which is likely available to you on a pro-rated basis for 2012, but the 2nd portion for travel is only available if your employer pays you an additional allowance for living in the North. The employer must put an amount in box 32 of your T4 for this additional allowance. If there is no amount in box 32, there is no amount you can claim for travel. I hope that helps, Kim
Thursday, May 02, 2013 - 05:37PM GMT | Darlene
I have a family member living in Ft. Mac on a two week in, two out basis. he doesn't live in the camps but is renting a room. Can he claim his travel home every two weeks, or any of his living expenses? His home is in NL Thanks Darlene
Saturday, May 04, 2013 - 11:27AM GMT | Karen
I live in Whitehorse YT. My employer recorded 833.00 in box 32. Myself and another household member travelled to Toronto for Christmas. My household member did not have an amount on box 32 on her T4. The cost of the return tickets were 775.00 each. Can I claim 775.00 for each of us? (i.e. $1550.00) We both qualify for the northern basic deduction Zone A. I am confused about how many people I can claim with my one amount on box 32 and if I can claim a trip to Toronto or does it have to be the cost of a flight from Whitehorse to Vancouver (or other designated city). Thank you.
Saturday, May 04, 2013 - 03:50PM GMT | Kathryn McKay
Hi Kim, I have a question: Is there a limit on the # of trips you can claim for the Northern Residents Travel Deduction? My employer and my husband's employer have given us an amount in Box 32 ($3,333.00 and $4,000.00) respectively. Are we allowed to list 3 trips each? And can we include each other and our children on the trips for calculation of meal expenses and the calculation of the cost of air travel?
Saturday, May 04, 2013 - 06:28PM GMT | Kim Drever
Hi Darlene - the travel to and from Fort McMurray to work is not deductible.
Saturday, May 04, 2013 - 06:36PM GMT | Kim Drever
Hi Karen - Since your employer has provided an amount in box 32, you can claim a travel benefit for you and your family living in the same house as you. Your claim will be limited to the lesser of 1) the amount in box 32 ie - $833; 2) the lowest return airfare for you and the members of the family that took the trip to your nearest designated city (ie - Edmonton or Vancouver); and 3) the actual amount of the trip, which you have provided. You will need to find out the amount of the lowest return airfare for the flights from Whitehorse to either Edmonton or Vancouver to determine which amount is the least. Thanks, Kim
Saturday, May 04, 2013 - 06:44PM GMT | Kim Drever
Hi Kathryn - you and your spouse will be able to claim a maximum of 4 trips between the two of you, as each of you can claim 2 trips. You would claim all members of your family living in your house on each trip for the totals for lowest return airfare to your nearest designated city and the actual costs of the trip.
Saturday, May 04, 2013 - 10:45PM GMT | Kathryn McKay
Hi Kim, Thanks so much for the quick response! Further on this topic, does the description "all members of your family living in your house" refer only to minor children or can my spouse and I include each other in the calculation of trip expenses/lowest return airfare? i.e. Can I list my husband as a member of my family coming on my trips and can my husband list me as a member of his family coming on the 2 trips he is listing? In reality, we did all travel together of course! We are just not sure if we can list each other as a trip participant. One extra person does significantly increase the cost of a trip with respect to meals ($51 per day times x days). Thanks so much!
Sunday, May 05, 2013 - 12:28AM GMT | Kim Drever
Kathryn, "all members of your family living in your house" would include your spouse. Please note though, that you only include the people who took the trip in the lowest return airfare calculation and the actual trip cost calculation.
Friday, June 21, 2013 - 01:41PM GMT | Eva
Hello, I have employee who has been living in Fort McMurray (Alberta, zone B) permanently and he was given in his job offer, on top of his regular salary, the Northern Living Allowance of $... paid monthly by direct deposit. He will be reporting to his manager in Edmonton office (branch) but employee will be base at company Fort McMurray territory. Employee is a driver servicing customer there. I understand that Company pays him a Northern Living Allowance to “offset community differences in cost of living and travel, based upon the community in which the Health and Social Service professional is employed.” I have to setup that allowance in the system and I think that his northern living allowance $ will be a taxable benefits = it will be listed on the T4 under box 32 and included in taxable income box 14 . The employee can claim one-half of the full northern residents deductions against this amount when they file their personal income tax. Am I right? Please help!
Friday, June 21, 2013 - 03:08PM GMT | Kim Drever
Hi Eva There are two components to the Northern Residence Deduction - there is a component that is available for residing in the prescribed Northern zones for a period of at least 6 consecutive months beginning or ending in the year, and the travel component. The travel component is available when the employer pays a Northern Living Allowance on top of the salary, as you mention is the case for your employee. The Northern Living Allowance is included in the employee's income at 100%. The employer will include this amount in box 40 and box 32. The employee can claim a corresponding deduction up to the lesser of the following three amounts: 1) the amount in box 32 of the T4; 2) the amount of the trips taken for the taxpayer and the members of the household that went on the trip; and 3) the lowest return airfare from Fort McMurray and Edmonton for the taxpayer and all members of the household that went on the trip.
Tuesday, September 03, 2013 - 10:01PM GMT | Jorlene
Hi Kim can children attending college full time be included in travel expenses during the summer or when picked up at school for breaks? I live in Chetwynd BC and thought that I would use Edmonton as my nearest city, however, based on what I have read above should I be using Vancouver or does either one work? Thanks for the help.
Thursday, September 12, 2013 - 04:04PM GMT | Deb
My husband has worked up in Fort McKay for the last 3 1/2 years. He works 1 week in and 1 week out. The company flies him up there and gives him lodging. That is a prescribed Zone B but he doesn't qualify for northern living allowance does he? When his income tax is done there are no extra $$ on the T4 or any other slip he gets. I just want to confirm this.
Thursday, September 12, 2013 - 05:48PM GMT | Kim Drever
Hi Jorlene If your child still resides in the Prescribed Intermediate or Northern Zone, and is a member of your household, they can be included in the travel component. If your child is not a member of the household, they would not be included. The following is from the CRA's document 2007-0239391E5 "The lowest return airfare ordinarily available at the time of the trip means the lowest return airfare for a regularly scheduled commercial flight on the date that the travel began from the airport closest to the individual's place of residence in the prescribed northern zone or prescribed intermediate zone, as the case may be, to the nearest designated city (even if the individual did not actually travel by air or to that particular designated city). In order to determine which designated city is used for the calculation one must first determine which local airport is nearest to the individual's place of residence in the prescribed northern zone or prescribed intermediate zone, as the case may be, immediately before the trip. In our view, the nearest airport would be the one that is reachable by means of public travel such as roads, highways, railways, ferries, etc. using the most reasonably direct route. At any given time, the nearest airport can change if circumstances change, such as a forest fire that causes the closing of a road to the otherwise nearest airport or the particular airport." As such, you will want to determine what your nearest airport is (likely Dawson Creek) and compare the flights from Dawson Creek to Vancouver to the flights from Dawson Creek to Edmonton. Your nearest designated city for the airfare component of the calculation would be the one with less travel distance by air.
Thursday, September 12, 2013 - 05:50PM GMT | Kim Drever
Hi Deb - you are correct in your assumption that your husband will not qualify for the Northern Residence Deduction or the Northern Travel as he does not reside in Fort McMurray.
Friday, October 04, 2013 - 09:00AM GMT | Nicolas
Hi Kim, Thanks very much for keeping this very informative discussion going over such a long period of time. I read every question and response and learned a lot. I didn't see my question or an answer to it, maybe you could help. My family and I live in Nunavut. We have an amount reported in our box 32's. We get selected for a CRA review every year based on our travel claim. Needless to say we're trying to get it down to a science. I know we need to report the lowest 'regular' return airfare at the time of travel. My question is: should this be a non-refundable fare, or a refundable fare? Which one is considered the 'regular' rate? There's a big difference in cost (our actual trip cost is always higher than the non-refundable fare, but lower than the refundable fare). Any thoughts you have on this matter would be very much appreciated. Nicolas
Friday, October 04, 2013 - 10:42AM GMT | Kim Drever
Hi Nicolas - The lowest return airfare would be the non refundable ticket. Thanks, Kim.
Monday, December 09, 2013 - 09:49PM GMT | Brenda Birley
Hi Kim, Do you know if there is a way to find the lowest airfare price for 2012? thanks
Tuesday, December 10, 2013 - 11:05AM GMT | Kim Drever
Hi Brenda - I am not familiar with any place that the lowest return airfares are published. You will need to keep records of the airfares that were available at the time of your trip. Regards, Kim
Saturday, February 15, 2014 - 10:52AM GMT | Jeff
Hi Kim, My employer gives me a total of $4500 in northern travel allowance as I live in zone A. The way that is calculated internally in our company is that I get $1500 for myself, my wife and my child. How exactly will this work with respect to filling out form T2222? I know the rules with respect to claiming the lowest of the actual trip costs or the lowest return airfare but I am not sure about how it works with respect to trips and the number allowed given how the employer separates it out by person. My gut is telling me that this internal separation is an internal policy and for CRA they will allow two trips to be claimed. So i guess my question is, am i only allowed to claim two trips for all of us or am I allowed to claim two trips each given the way it is intended to be paid out. For example, lets assume we take two trips as a family down south a year. They are two weeks each and total cost for all three of us is $7500 for each trip (airfare, hotels, meals). Do i claim the following: Scenario 1: Trip one: Employment benefit ($2250 - half given can claim two trips) Actual cost of trip $7500 (for all three of us) Lowest return airfare ($5100 for all three - $1700 each to the nearest designated city) Trip two: Employment benefit ($2250 - half given can claim two trips) Actual cost of trip $7500 Lowest return airfare ($5100 - $1700 each to the nearest designated city) Or do i claim 6 total trips, two each and divide the total actual cost of the trip by 3 to $2500 each? Thanks, Jeff
Thursday, February 20, 2014 - 07:36PM GMT | Kim Drever
Good evening Jeff As your question is very specific about completing your tax return, I suggest that you seek out the assistance of an accounting firm to help with the preparation of your return. As I mentioned in previous responses, when calculating the travel benefit, the employee can claim a corresponding deduction up to the lesser of the following three amounts for two trips: 1) the amount in box 32 of the T4; 2) the amount of the trips taken for the taxpayer and the members of the household that went on the trip; and 3) the lowest return airfare from your nearest airport to the nearest designated city for you and all members of the household that went on the trip.
Thursday, February 20, 2014 - 07:41PM GMT | Kim Drever
To the readers of this blog - please note that all specific questions on your personal situation should be directed to an accountant who will assist in the preparation and filing of your personal tax returns. We do have offices in numerous cities and would be able to help. Kind regards, Kim
Monday, February 24, 2014 - 03:24PM GMT | Laura Gallacher
Hi Kim, I have looked through all the comments and can't seem to see that my question has been answered previously. I live in Zone B, my employer pays me a little extra on my pay slip on top of my base wage (50c/hour) as a Northern Living allowance. This is in Box 40 of my T4 but they havn't completed a Box 32. Can I still claim for travel? If not then are there any rules to ensure that they complete the Box 32... I have heard from other employees that they used to do this but stopped last year. Thanks
Monday, February 24, 2014 - 04:10PM GMT | Kim Drever
Hi Laura - in order to claim a the Northern travel deduction, your employer will have to fill out box 32 indicating that they have paid you a Northern Travel Allowance. If the box is not completed, you will not be eligible to claim for Northern travel. Regards, Kim
Monday, February 24, 2014 - 06:16PM GMT | Anonymous
Hi: In Feb 2013 my husband moved from NT to YT for work and rented a place to live. I was still in the NT for 3 more months and continued renting until I could move. So from Feb. to May inclusive we both rented a place to live seperate from each other. For those 3 months could we both claim the full residency amount (basic and additional) and then for the remaining 9 months just one of us claims the remainder of the year for the full amount?
Monday, February 24, 2014 - 06:54PM GMT | Kim Drever
As your question poses a specific issue about filing your personal tax returns, I suggest that you engage an accountant to file your tax returns. If desired, our MNP offices would be happy to help. In the North, we are located in Fort St. John, BC; Peace River, AB; Fort McMurray, AB; and Grande Prairie, AB.
Tuesday, February 25, 2014 - 05:43PM GMT | Kylie
Hello, Quick question, my husband is given a travel allowance for us to travel, we go out usually for a month at a time, I am wondering about meals and what we are able to claim for that per person, there is 4 in our family, and if we didn't keep meal receipts is there a max. amount we are allowed to claim and is there a specific duration or is it allowed for the entire time we are on travel? Thanks.
Tuesday, February 25, 2014 - 05:58PM GMT | Kim Drever
For your travel allowance, you could deduct the LEAST of the following three amounts. 1) The value of the allowance received from the employer (this will be in box 32 of your T4); 2) The actual amount of the trip that you took (actual cost, or using the simplified method explained below); 3) The lowest return airfare available at the time the trip was made from your home airport to your nearest designated city. In order to calculate the actual amounts for #2 above, you use the costs from your city to the place you vacationed, for the entire duration of the vacation. You can use either the detailed or simplified method. Under the detailed method, the actual amount of the cost of the trips would be used for #2. This would involve keeping all your receipts for your hotels, meals, car rentals, flights, gas, etc. The alternative is to use the simplified method. where you would use the per kilometre rate as prescribed by the CRA for travel costs ($0.53 per km), and a rate of $17 per meal (or $51 per day for meals) per person, plus the actual cost of hotels, and additional expenses. You will never be able to claim more than the least of the three amounts, and for most people, it is the cost of a return airfare from your nearest airport to the nearest designated city.
Friday, February 28, 2014 - 12:16PM GMT | Ryan
Hi, my question is whether or not there is list of the lowest return airfare amounts by province and Zone that the cra references? That would make this deduction a lot less complicated.
Friday, February 28, 2014 - 02:42PM GMT | Kim Drever
Hi Ryan - I am not aware of any such list. I suggest that you keep copies of the lowest return airfare at the time of your trip to substantiate the amount that you claim.
Saturday, March 01, 2014 - 10:15PM GMT | Diane
Hi. Say two people share a residence and both qualify for the basic residency deduction for the full year. One of them has very low income and does not need to use all of the basic deduction to bring his income tax to zero. Could that person claim a partial basic deduction for the year, such as 100 days even though actual residency was 365 days? Then could the other person with a higher income claim the additional residency for the other 265 days along with the full basic residency deduction? Thank you.
Sunday, March 02, 2014 - 02:56PM GMT | Kim Drever
Hi Diane - either one person claims the basic AND enhanced or both people claim the basic for the full year. Regards, Kim
Tuesday, March 04, 2014 - 12:54PM GMT | Katie Squires
I've lived in Fort McMurray for the last 8 yrs. I was told that there could only be 1 person PER household that could claim northern residency. Was I misinformed?
Tuesday, March 04, 2014 - 02:51PM GMT | Kim Drever
Either one person claims the basic AND enhanced, and no one else can claim a basic amount, OR each person in the household claims the basic amount.
Friday, March 07, 2014 - 05:15PM GMT | KD
Hello Diane, I work 100 km north of Fort Mcmurray. Our company provide free boarding and transportation to Edmonton (my principle residence)I work full year here on site and only go to Edmonton on days off. Company does not pay any additional baording or transportation allowances.( because accommodation and transportation is free to employee). Am I eligible for the Northern Residence Deduction , special site or remote site deduction? Thanks.
Friday, March 07, 2014 - 05:17PM GMT | steve
Hi Kim.On Sept.18,2012 I moved to Dawson Creek and stayed there until May 25,2013.My 2012 tax return gave me credit for the Northern living allowance from Sept.18-March 23,2013 which was the date when I filed my 2012 tax return. When I try to claim the remaining days from March 24-May 25,2013 on my 2013 return the program won't allow it as it isn't registering as 6 consecutive months when in reality those extra days are a continuation of the time started in Sept.2012. Should I simply show the dates as Sept18,2012-May25,2013 and let Rev Can correct it. Thanks.Steve
Friday, March 07, 2014 - 05:32PM GMT | Kim Drever
Hi Steve - as you lived in the prescribed zone for a period of 6 months beginning or ending in 2013, you can claim the Northern Residence Deduction. When you enter the total dates beginning in 2012, your deduction will be prorated for the number of days you were in Dawson Creek from January 1, 2013 to May 25, 2013.
Friday, March 07, 2014 - 05:39PM GMT | Kim Drever
Hi KD, Since you do not live in a prescribed zone (you live in Edmonton not the camp), you are not eligible for the Northern Residence Deduction. Your employer pays for your travel and accommodations in a camp, and you are not residing in the North. In addition, you also asked about special work sites which is beyond the scope of this blog. If you are requiring assistance in the preparation of your tax return I suggest that you engage an accountant for help. Kind regards, Kim
Friday, March 07, 2014 - 06:08PM GMT | Maxine
Hi, I live in Fort McMurray and claim the Northern Living Deductions but was wondering if I am allowed to claim the 2 trips per year? I do not have a Box 32 on my T4 so was under the assumption I could not. Please clarify if I would be allowed or not. Thanks, Maxine
Friday, March 07, 2014 - 10:51PM GMT | Kim Drever
Hi Maxine, as indicated in prior responses the travel component is limited by three factors, one of which is box 32. As such, if box 32 is $NIL, then the maximum claim is also $NIL.
Friday, March 14, 2014 - 09:41AM GMT | Patrick
Hello Mrs. Drever, I have a question regarding the Travel component of the Northern Living Deductions. My wife and I both work for AHS in Peace River, Alberta. Our employer provides a Remote Retention Allowance for the 55th/57th parallel, as part of their Northern Living Incentive program; it is included in our Gross income on our T4's, and is only seperated on our pay invoices. Are we able to claim the two trips? I noted your responses regarding Box 32, neither of us have an amount in these on our T4's. Thank you for your time.
Friday, March 14, 2014 - 11:17AM GMT | Dan
Hi KD- here is the thing about Box 32. Was never really aware of what it meant. Our company did not provide info on box 32 and I did not ask. Caveat Emptor, but now I have left money on the table in 2012 and possibly in 2013. It would be nice to file an amended return for 2012 and get it right for 2013. How can one find out these flight costs, or does it mean that in order to get an amount for column #5 I would have to engage the services of an accountant? Why would the CRA have amounts that THEY use for an average cost and not supply these to tax payers. Called the airline, but they have never heard of historical average daily flight costs! Frustrated in Fort McMurray.
Friday, March 14, 2014 - 12:12PM GMT | Kim Drever
Good morning Patrick - in order to claim for the travel component of the Northern Residents Deduction, you must have an amount in box 32 of your T4. Since your benefit is called a 'remote retention allowance', it appears to be a higher income for living in a Northern community rather than to cover your travel.
Friday, March 14, 2014 - 02:27PM GMT | Kim Drever
Hi Dan - if your employer did not provide a travel component of the Northern Residents Deduction, you were not entitled to claim for it. There is no obligation for employers to pay this, and most do not. As you did not receive the amount in box 32 of your T4, you will not be entitled to the additional deduction. and really did not "leave money on the table", as you were not taxable on an additional amount included in box 32. For the second part of your question about the flight costs, it is up to each taxpayer to determine the lowest return ticket at the time of your trip. The airlines do not provide this historical information, and neither does the CRA. For people that do have a travel benefit, they should track the lowest return airfare at the time of their trip. Many accounting offices do develop a system for determining the lowest return airfares for the cities they practice in. If your employer pays you a travel allowance in the future, and you are entitled to a claim, you may want an accounting firm to prepare your returns then.
Saturday, March 15, 2014 - 01:19PM GMT | Kim Drever
Please note that I respond to questions that are general in nature. I do not respond to questions that are specific about your personal situation or how to fill out the returns. I receive many questions that have been previously answered - please review the responses above prior to submitting a question.
Saturday, March 15, 2014 - 01:56PM GMT | Dan Wilson
Ms.Drever: sorry for the confusion, I assumed that by writing, you would understand that there were amounts in box 32 on my T4's both years. Can I go back in 2012 and amend my return, even though I have no idea what the lowest return ticket cost for column #5 is? Some have suggested that I get a cost for the same flight time this year and use that as a starting point?? It would have been nice to get a welcome to the "Northern Resident Deduction" kit as part of an employment package that explained things to those of us who are new in town. When you first get to your new job, all those forms just get bundled and put away as you get down to work. Then, you do your taxes a year later and assume its the same thing as it was back home. Missed the northern deductions for living here in 2012 all together and I bought a place to live. Lots to be said for seeking professional help such as yours in dealing with these and many other issues that arise in this unique environment. Thanks for your response and I will be contacting your office in Fort McMurray for help.
Saturday, March 15, 2014 - 04:10PM GMT | Kim Drever
Hi Dan - there is a way to go back and get credit for the Northern Residents Deduction and the travel component for the years you missed. It will be necessary to file T1 Adjustments and our Fort McMurray office will be able to assist you. Our office will also have details on the lowest return airfare for the years in question as we do have historical information. You'll be in good hands. Best of luck, Kim
Thursday, March 27, 2014 - 11:17AM GMT | Meg
Hello, I am living in Fort McMurray, with my now husband. We were renting in 2012 and we both got audited last year for proof of northern residency. They requested we both refile our T2222, with proof of living here for at least 6 months either end and if we want to claim the additional residency than we need signed letters of other adults living in the house. Because we were living together only one of us can claim the additional residency amount. My husbands company completes box 32 on his T4 and mine does not. How can we maximize our return on the additional residency amount and travel ? Scenario 1: My T2222: Basic, Additional husband T2222: Basic, and Travel Scenario 2: My T2222: Basic Husband T2222: Basic, travel & additional Also, we were residing together in Fort McMurray but my husband owned a property he rented out that year, if he owned the property, why did the renter not have to get a signed consent letter from my husband to claim the additional residency, considering we completed maintenance on the house and paid the sewer and utilities? How can we claim it if we can, considering this renter is long gone? and the CRA is requesting signed consent. Does it not default to the person who is on title to claim the additional and the person renting to request consent? Thank you
Thursday, March 27, 2014 - 11:28AM GMT | Kim Drever
Good morning Meg - thank you for your question. As your issues are very specific about filing your personal returns, I suggest you hire an accountant to file your returns for you. There are many nuances to consider and it would require someone to thoroughly consider your situation. Please note that if ONE person in a household claims the additional amount on the T2222, no other person in the household can claim the basic amount.
Thursday, April 03, 2014 - 10:39PM GMT | Ross
Hi Kim I'm so relieved to have finally found someone who provides info on the NR deduction! I received an Employment Benefit of $2,242. I'm entering two trips - one with just my daughter and the other for myself, my husband, and my two daughters. I've entered the $2,242 Employment Benefit on the first row and the second row - once for each trip. I've calculated and entered the Travel Expenses for each trip and the Lowest Return Airfare amount (multiplied by the number of us who went on each trip – so X2 for the first trip and X4 for the second trip). In the first row, the lowest amount from the first trip turns out to be the Lowest Return Airfare. In the second row, the lowest amount from the second trip turns out to be the Travel Expenses. But those two "lowest" amounts total $3,471 - way more than the $2,242 Employment Benefit. What am I doing wrong? Thanks Ross
Tuesday, April 08, 2014 - 01:05PM GMT |
I currently live in Winnipeg but will be going to work in Churchill MB for 7 months and was wondering if I have to change my address to claim northern living allowence or can I leave my address the WY it is and it show on my T4 that I was up north. Thank you
Tuesday, April 08, 2014 - 04:11PM GMT | Kim Drever
In order to substantiate the claim for the Northern Living Allowance, the CRA may request that you show proof of living in the prescribed zone. This could be copies of leases, utility bills, etc. When you move, you will likely want to change your address for the period of time you are there so you can receive your mail from the CRA. The claim for the Northern Living Allowance would be available as you would be living there for longer than the necessary 6 month period. To claim the travel component, it will be completely dependent on whether your employer pays you a travel allowance.
Monday, April 28, 2014 - 09:52AM GMT | Sylvie White
I lived in FortMcmurray for 16 years and moved to New Brunswick at the end of July of last year. Am I allowed to claim Northern Residency Deduction for the last seven months I lived in Alberta if I now live in NB?
Monday, April 28, 2014 - 10:33AM GMT | Kim Drever
Good morning Sylvie - you will have a prorated claim for the number of days you were living in the prescribed zone.
Sunday, June 08, 2014 - 08:57AM GMT | Allison
Thank you so much for sharing all this excellent information and for keeping up with the comments/responses for several years! I had difficulty finding any other detailed resources on this topic, but all my questions have been answered here. I will likely be back next year to refresh my memory.
Friday, June 13, 2014 - 07:21PM GMT | Katharine
Hello, I have a question about the northern residency amount and being a student. Last year I was off of work on education leave and was living in the south from August 2013-Present. I am still considered a northern resident and did not change my mailing address. I also received a partial income from my employer while off so I was still employed by the Government of Nunavut. Can I still claim the basic residency amount for the days that I was living here (142) even though it is less than 6 months I was physically here (I have been a resident for longer than 6 months)? Thanks for your help! Cheers, Katharine
Saturday, June 14, 2014 - 10:46AM GMT | Kim Drever
Hi Katharine, if you were in the designated area for 6 months that began or ended in the year, you can claim the Northern Residents Deduction. Therefore, count back from when you left - if there was at least 6 consecutive months, you will be ok even though you may have only been there for, say, 4 months in the calendar year that you are filing for.
Sunday, August 31, 2014 - 07:40PM GMT | Anonymous
Hi, firstly thanks for writing on this topic your knowledge is greatly appreciated. I use Turbo tax software to file my returns and am puzzled why the number of trips one can enter are limited to 6, how does one enter medical and personal trips if they are greater than 6 (can multiple trips be combined and entered as one line item) also are medical trip amounts limited to line 32 on T4 or just personal trips? Thanks. Arain
Monday, September 01, 2014 - 12:46PM GMT | Kim Drever
Good morning Arain - I do not use that software and am not familiar with how it works. As I don't answer questions directly with how to file returns or fill out software programs, I suggest that you seek out the assistance of an accountant in your area to file your returns. Regards, Kim
Thursday, September 18, 2014 - 09:23PM GMT | Rob
Hi Kim, After finding this board it seems like you really know your stuff, so I really hope you can help me with a couple of questions. We're getting audited for 2012 and 2013 Northern Living Allowance. In 2012 our family of 6 travelled to Dominican Republic and in 2013 we travelled to Las Vegas. Are we able to claim these trips? We do not have meal receipts we were planning on claiming the basic amount for that. Also, what about when we travel from Fort McMurray to Edmonton and either stay with friends, or tour with our camper... are we still allowed to clam the basic amounts for meals for those 10-12 days? Thanks, Rob
Friday, September 19, 2014 - 12:18PM GMT | Kim Drever
Hi Rob - When figuring your trips for the Northern Living Deduction travel amount, you will be limited to the lesser of the following three amounts: 1) The value of the allowance received from the employer (this will be in box 32 of your T4); 2) The actual amount of the trip that you took (actual cost, or using the simplified method for meals and travel - this can be anywhere and is not limited to your nearest designated city, therefore the trips to the Dominican Republic and Las Vegas count, as do the trips to Edmonton); and 3) The lowest return airfare available at the time the trip was made from your home airport to Edmonton. You will limited to the smallest amount of the three, which will likely be the lowest return airfare.
Sunday, November 02, 2014 - 06:13PM GMT | Kelly
Hi, I have a question regarding the lowest return airfare. I live in Slave Lake which does not have regular scheduled flights to Edmonton and there are no other local airports closer than Edmonton. It would be nice if the CRA had a list of local airports and corresponding rates. Hoping you've come across this before...
Monday, November 03, 2014 - 09:59AM GMT | Kim Drever
Good morning Kelly. I have not researched whether Slave Lake is in the prescribed Intermediate Zone, but assuming it is, your question about Slave Lake does pose a difficult issue. This is because the amount you can claim for your travel allowance is the least of the following amounts: 1)The value of the allowance received from your employer (box 32 of your T4); 2) The actual amount of the trip you took in the year; and 3) The lowest return airfare available at the time the trip was made from your home airport to the nearest designated city. You mention that your closest airport is Edmonton. Unfortunately, I have never experienced this before so don't have any insight into what CRA's assessing position is. If I were you, I'd probably find another airport close to Slave Lake with flights and use that the lowest return airfare to Edmonton.
Wednesday, November 05, 2014 - 12:03AM GMT | judy
Hello, I have a question about Box 32. I live in Grande Prairie and am a nurse in the hospital here. My emploer does not give an allowance for travel out of our zone but am I able to claim two trips out of the north on my income tax? Thanks.
Wednesday, November 05, 2014 - 08:13AM GMT | Kim Drever
If you review the blog and prior responses, the deductible amount is the least of three amounts, one of which is the allowance paid by your employer. If your employer does not pay you a Northern Travel Allowance, this amount in the formula will be $NIL, and you will not be able to claim a travel deduction.
Friday, November 28, 2014 - 12:10PM GMT | Anonymous
I have been a full time resident of Fort McMurray since November 2012. During the first 7 or so months there I rented a 1-bedroom condo for $2650 a month. In July 2013 I moved into a separate entrance 2-bedroom 1 bathroom basement suite with its own private kitchen. This unit cost me $2250 per a month to rent and I stayed there for the full lease term paying a total of $27,000 in rent for that single year. I claimed the northern living allowance when doing my taxes for 2013 and I was questioned on this and asked to prove residency. I gave the CRA Shaw utility bills for unit in question charged to my name, I paid cash for the rent and was not given receipts. I have ample proof of full time residency beyond the cable bills I paid that are dated and show the actual address of the basement suite I was staying in. Not the least of which can easily be confirmed from my employer and people who can attest that I was the resident in the unit as they visited me there. The CRA refused my claim for the NLA as the home owner claimed the "full amount" on their own taxes and forced me to pay additional taxes and disallowed my own northern living allowance claim (even a partial one for the time in the basement suite. It states VERY clearly on Revenue Canada's own website that "To qualify for northern residents deductions, you must have lived, on a permanent basis, in a prescribed northern or intermediate zone for a continuous period of at least six consecutive months." Period, end of sentence. They say NOTHING about the exact housing having a part in this. This is a credit meant to help alleviate the high costs of living in the northern regions of the country, and at $2250 a month for rent and $27,000 after tax income for a year I most definitely was paying a premium living and working in Fort McMurray. How is it that I do not qualify for the Northern Living Allowance and my landlord can claim the FULL amount and somehow his claim nullifies mine? MY own taxes are my own, I do not care what my landlord did (his own taxes SHOULD be none of my own business in fact) and his actions should not affect MY rightful tax deductions as a full time resident of Fort McMurray. I have lived in Fort McMurray for over 2 consecutive years now and I am being told I am unable to claim the NLA, which is completely at odds with what Line 255 states on the Revenue Canada website.
Wednesday, December 17, 2014 - 12:44PM GMT | Robert Duehmig
Hello. I just wanted to ask a question regarding my employment in the North. On April 1/2014 I left Winnipeg to Baker Lake Nunavut. I was hired by Arctic Co-op to manage a hotel in Baker Lake. The contract was from April 1/2014 to October 2/2014 My question IS ? My home is in Winnipeg, my wife did not accompany me. She stayed home to look after our house. She is retired. Which Income Tax do I complete Manitoba or ?? I was paid a salary, they paid my airfare, and I paid a monthly rental charge for my room for the six months. Do I get the Northern allowance benefit. Im at a loss hear for information. Can you help me. Thank-you Happy Holidays
Wednesday, December 17, 2014 - 12:45PM GMT | Robert Duehmig
Hello. I just wanted to ask a question regarding my employment in the North. On April 1/2014 I left Winnipeg to Baker Lake Nunavut. I was hired by Arctic Co-op to manage a hotel in Baker Lake. The contract was from April 1/2014 to October 2/2014 My question IS ? My home is in Winnipeg, my wife did not accompany me. She stayed home to look after our house. She is retired. Which Income Tax do I complete Manitoba or ?? I was paid a salary, they paid my airfare, and I paid a monthly rental charge for my room for the six months. Do I get the Northern allowance benefit. Im at a loss hear for information. Can you help me. Thank-you Happy Holidays
Thursday, December 18, 2014 - 12:11PM GMT | Kim Drever
Hi Robert - there are three issues for you to consider. Firstly, you reside in Manitoba at December 31, 2014 thus will file as a resident of Manitoba. Secondly, You were in the Prescribed Northern Zone for a consecutive six month period, therefore, meet the 6 month condition. For the third issue, you would have to "reside" in the Prescribed zone. This is the area where you will have ambiguity as you did not actually move there and your employer paid for your travel to get there. However, since you paid for rental accommodations and I assume you would have ordinarily resided there while your spouse remained in Manitoba, you would have a filing position to claim the deduction. However, to determine if you are eligible for the travel benefit, you will need to review whether there was travel allowances paid by your employer.

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