CRA denies Nunavut gov't request for amended travel allowance
CRA also quietly increased the daily food allowance on the northern residents deduction
The Canada Revenue Agency says it won't allow northerners to claim their full travel benefits on their 2020 income tax returns, despite calls from the Nunavut Government for reprieve.
Back in August, Nunavut finance minister George Hickes called on Ottawa to allow northerners to claim the full travel benefits from their employers — also known as a vacation travel allowance, or a personal leave travel allowance, or Box 32 on a T4 slip — regardless if northerners travelled in 2020.
Hickes's rationale was to not penalize northerners who followed travel restriction recommendations during the pandemic last year by having them lose out on the tax refund from claiming their travel expenses — although taxpayers who did not travel would have not incurred travel expenses in the first place.
Still, in an email to CBC News, a CRA spokesperson said the agency has no plans to change the parameters of the northern residents deduction for the 2020 tax year.
That his request was denied was news to Hickes when contacted by CBC News.
"You've gotten more of a response than I have," Hickes said, adding he's only had two emails from his federal counterparts — federal finance minister Chrystia Freeland, and Minister of National Revenue Diane Lebouthillier — in the last eight months.
"It's a real missed opportunity to do something [really] meaningful for Nunavummiut. This lack of recognition punishes Nunavummiut that have followed our travel restrictions. It puts a real tax burden on people that would have tax credits, that don't have that availability now because they followed our rules."
Meal allowance on T2222 increased to $69 per day
The CRA did, however, quietly increase the amount of money Northerners can claim for meals for travel on their northern residents deductions form, also known as a form T2222.
Using the simplified method, which doesn't require receipts, the CRA now allows tax filers to claim $69 per day, up from $51 per day. It's the first time the amount has increased in recent memory, according to northern tax experts.
The change was news to Hickes, too, and the CRA also did not highlight the new amount in its online rundown of tax changes for 2020.
The CRA did not respond by deadline to a question about why it didn't do more to inform northerners about the change.
Northerners have been documented to be reassessed at around three times the national average, in part because of errors completing the northern residents deduction.
Yes, you can claim land trips on your tax return
While many northerners stayed in the North last year, they can still claim trips they took to other communities and even land trips — as has been the case since Nunavut's inception.
"The main thing they get to claim is the days they're out on the land, they get to claim $69 per day for meals per day.,per person," said Ralph Cormack, the tax manager at Lester Landau Chartered Professional Accountants in Iqaluit.
Cormack also advised if anyone received COVID-19 benefits — including on-the-land grants from their regional Inuit organization — they must report the income on their tax return. He said the Inuit organizations will have T4As for recipients.
Nunavut Tunngavik Incorporated also has tax information for Nunavummiut here, as it relates to COVID-19 benefits.
"I think it's very important that everyone keep their receipts for any in-territory travel including travel on the land," Hickes said.
"Keep those receipts, and use that as any available deduction."