Deduction for Residents of Designated Remote Areas
You have to subtract an employee's allowable travel deduction from the employee's gross remuneration for a pay period if the employee's remuneration for a pay period includes the value of a taxable benefit related to trips made by a resident of a designated remote area.
An employee can claim a travel deduction respecting a taxable benefit included in his or her gross remuneration if the following conditions are met:
- The employee has lived in a designated remote area for a period of at least six consecutive months that began or ended in the year.
- The trip was made by the employee or by a member of the employee's household during the period of the year in which the employee lived and worked in the remote area.
- The employee worked in the remote area at the time the trip was made.
- You and the employee are dealing at arm's length.
- The trip was made by the employee or by a member of the employee's household to receive medical services not available in the place where he or she lives (unlimited number of trips), or for a non-medical reason (limit of two trips per person).
- Neither the employee nor any member of the employee's household will claim, in his or her income tax return, another deduction or tax credit for medical expenses with respect to the taxable benefit.
- No form of financial assistance (other than this taxable benefit) was granted to the employee or a member of the employee's household for travel expenses. This condition does not apply if the financial assistance was included in the income of the employee or a member of the employee's household.
The total cost of trips made for reasons other than business or medical reasons (for example, trips made because of a death or an unfortunate event, or annual leave) must also be included in boxes A and K. The value of this benefit can be deducted in the calculation of the employee's income, subject to a limit of two trips for each member of the household.
If the conditions are met, calculate the amount of the deduction and subtract it from the gross remuneration.