Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: What are the tax implications to an individual receiving a one-time payment for professional development?
Position: Non-taxable reimbursement of expenditures.
Reasons: Ransom v MNR
2005-013695
XXXXXXXXXX Luisa A. Majerus, CA
(613) 832-3488
October 17, 2005
Dear XXXXXXXXXX:
Re: Teacher and Support Staff Development Payments
This is in reply to your email dated June 16, 2005, requesting confirmation of the tax treatment to individuals in receipt of an amount for professional development. Specifically, the Ontario Ministry of Education ("OME") has provided school boards with grant monies for "Teacher and Support Staff Development" ("TSSD"). An amount of $512.00 (maximum) is to be paid to each employee for professional development. You have asked for our views on whether the TSSD payment is taxable to the employees; if the school board is required to make regular payroll withholdings; if employees are required to retain and submit receipts; and if the school board is required to complete a T2200 with respect to the TSSD payment.
Paragraph 6(1)(a) of the Income Tax Act (the "Act") provides that there shall be included in computing the income of a taxpayer for a taxation year as income from an office or employment the value of board, lodging and other benefits of any kind whatever received or enjoyed by the taxpayer in the year in respect of, in the course of, or by virtue of an office or employment. Paragraph 18 of Interpretation Bulletin IT-470R (Consolidated) Employees' Fringe Benefits ("IT-470R") describes the Canada Revenue Agency's ("CRA's") position on the tax implications of employer paid education costs. A taxable benefit generally arises when the training is primarily for the benefit of the employee. However, generally, when training is taken primarily for the benefit of the employer, there is no taxable benefit whether or not this training leads to a degree, diploma or certificate.
Accordingly, it is our view that the TSSD payment to the employees of the school board for professional development represents a reimbursement of employment expenses and is not taxable under paragraph 6(1)(a) of the Act. Furthermore, the payment is not subject to regular payroll withholdings and the employee is not required to retain and submit receipts supporting the amount. Finally, it is our view that a form T2200 is not required to be completed with respect to this amount.
We trust this information is helpful.
Yours truly,
Randy Hewlett
For Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Planning Branch
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