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: Whether a deduction is available for the expense incurred for tools used to earn employment income as an industrial electrician.
Position: No
Reasons: Currently, the Income Tax Act does not provide an employee such as yourself a deduction for the cost of tools incurred and used to earn income from employment. However, the 2006 Budget proposes to recognize a deduction for the cost of eligible new tools acquired by an employed tradesperson after May 1, 2006. The deduction will be limited to the lesser of $500 and the amount by which the total cost of new tools acquired in the year exceeds $1,000.
XXXXXXXXXX 2006-017529
Darlene Green
(613) 957-2082
June 5, 2006
Dear XXXXXXXXXX
Re: Technical Interpretation Request - Employment Expense
This is in response to your email correspondence of March 4, 2006, wherein you indicated that you are an industrial electrician and would like to claim as an employment expense the costs that you incurred for tools used to earn employment income.
Currently, the Income Tax Act does not provide an employee such as yourself a deduction for the cost of tools incurred and used to earn income from employment. However, the 2006 Budget proposes to recognize a deduction for the cost of eligible new tools acquired by an employed tradesperson after May 1, 2006. The deduction will be limited to the lesser of $500 and the amount by which the total cost of new tools acquired in the year exceeds $1,000. In addition, the Budget also proposes to introduce a new Canada employment credit in recognition of work-related expenses incurred by employees. The new credit will take effect July 1, 2006 and will provide tax relief on the lesser of $500 ($250 for 2006) and the individual's employment income for the year.
We trust that our comments will be of assistance to you.
Yours truly,
Randy Hewlett
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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