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How to claim union dues on the tax return?

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If you are a member of a trade union or professional organization, you can deduct certain types of union contributions or professional membership dues from your income tax applications. The amount of union fees you can claim is listed in box 44 of your T4 tickets or receipts and includes any GST / HST you have paid. You can claim these amounts for a tax deduction on line 21200 in your tax return. If you are the primary beneficiary of the union contributions and your company pays them on your behalf, you cannot be entitled to a tax deduction, and you may have to pay taxes on this benefit.

There are different types of trade union and professional membership dues that you can deduct when filing taxes. You can claim your work-related contributions that you have paid or paid on your behalf and that have been included as part of your income during the year.

CRA allows you to charge the following types of fees in your tax return:

  1. Annual trade unions if you are a member of a trade union or association of civil servants
  2. Contributions paid to the professional register in accordance with the provincial or territorial laws
  3. Premiums paid for insurance to cover liability for damage caused in the exercise of a profession or improper treatment
  4. Reasons for maintaining legal professional status in the eyes of the law
  5. Contributions paid to the parity of the advisory committees provided for by provincial or territorial law

What do you need to take care of?

It is important not to apply for the trade union tax deduction more than once. Your employer can show a trade union tax deduction on your T4 tax document, and you can also receive a tax document from the professional association or organization to which the contributions relate. Make sure the amounts match and request them only once. The dual application of union taxes can result in a revaluation notice and possible fines and interest due.

By the close of February, each employer must issue employees with earned income tickets from the previous fiscal year. The amount of union contributions eligible for tax deduction is shown on the T4 slip in box 44. You can apply for a tax deduction on line 21200 of your tax return, and if your employer is a registered GST / HST, you may be able to request the reimbursement of part of the union contributions.

You cannot claim a tax deduction for start-up expenses, licenses, special estimates, or fees unrelated to the company’s operating costs. As an affiliate of a pension fund, you can no longer apply for a tax deduction for the payment of membership dues.

Prior to 2018, an employee who had previously paid taxes could be deducted as unpaid expenses for company employees if the total amount of contributions plus some various deferred expenses reached a certain level. The employee then deducted the contributions if he was able to write down the deductions.

In the occasion that an employee requests a deduction for professional membership or union contributions, some additional considerations arise. In general, although a particular job title need not be a condition for an employee’s position for that member of staff to claim a deduction for related professional contributions, the CRA requires that there be some link between the employment and the association professional in question. In some cases, the employer is willing to pay the costs of the employee’s professional contributions as part of an employee benefit package. In this instance, the employer’s payment of these contributions is not shown on the employee’s T4 as a taxable benefit; the employee cannot claim a deduction of those costs. However, if the worker suffers a taxable advantage, he can, in line 212 of the return, request the deduction of any taxes or allowable taxes paid.

Conclusion

If you are required to pay professional membership dues as a condition of employment and your employer pays or reimburses them to you, you cannot claim a tax deduction on your earned income. Depending on who your primary recipient is, there may be a tax advantage for you. For example, if you are the primary beneficiary and your employer pays your contributions, you will have a tax benefit due.

The amount of the taxable benefit is indicated on the T4 slip in box 14 (employee income) or in code 40 (in the Additional Information section) of the T4 slip.

Whether you make an appointment with one of our experienced tax professionals or choose one of our online tax registration products, you can rely on us to help you determine if you can claim tax deductions.

Salman Rundhawa
Salman Rundhawa
Salman Rundhawa is the founder of Filing Taxes. Salman provides valuable tax planning, accounting, and income tax preparation services in Toronto, Mississauga, Oakville, and Hamilton.

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