We understand the specialized markets in which you operate and provide tailored solutions to meet your unique business needs.
Our comprehensive suite of business services combines industry expertise, market knowledge and professional insights.
MNP is a leading national accounting, tax and business consulting firm in Canada.
Suite 2000, 330 5th Ave. S.W.
As an entrepreneurial firm, we truly believe there are no limits to where your career can go.
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.
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.
The employee can deduct the least of the following amounts:
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.
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.
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.
Notre site Web fait peau neuve! Nous avons lancé en fin septembre la version anglaise de celui-ci, et la version française suivra d'ici quelques semaines. Nous sommes désolés pour ce délai. Toutefois, si vous le souhaitez, nous pouvons vous aviser lorsque la version française sera mise en ligne. Il vous suffit d'en faire la demande par courriel à firstname.lastname@example.org
Nous vous remercions de votre patience
Find an office near me