If you belong to a union or professional organization, you can deduct certain types of union dues or professional membership fees from your income tax filings. The amount of union dues that you can claim is shown in box 44 of your T4 slips, or on your receipts and includes any GST/HST you paid. You can claim a tax deduction for these amounts on line 21200 on your tax return. If you’re the primary beneficiary of the union dues and your employer pays them on your behalf, you cannot claim a tax deduction, and you may have to pay taxes on this benefit.
Union Dues or Professional Membership Dues You Can Claim
There are various types of union dues and professional membership dues you can deduct when filing your taxes. You can claim dues related to your employment paid by you or paid on your behalf that were included as part of your income during the year.
The CRA lets you claim the following types of dues on your tax return:
- Yearly union dues when you’re a member of a trade union or association of public servants
- Dues paid to a professional board as required by provincial or territorial law
- Premiums paid for insurance for professional or malpractice liability coverage
- Dues for keeping a legal professional status in the eyes of the law
- Dues paid toward parity of advisory committees as required by provincial or territorial law
By the end of February, each employer must issue employees T4 slips for employment income earned during the previous tax year. The amount of union dues eligible to be claimed as a tax deduction is on your T4 slip in box 44. You may claim a tax deduction on line 21200 of your tax return and if your employer is a GST/HST registrant, you may be able to claim a refund for a portion of your union dues.
It’s important that you do not claim your tax deduction for union dues more than once. Your employer may show a tax deduction for union dues on your T4 slip and you may also receive a tax receipt from the professional association or organization the dues are related to. Make sure the amounts match and only claim them once. Claiming union dues twice can result in a notice of reassessment and a possible penalty tax and interest owing.
Union Dues or Professional Membership Dues You Cannot Claim
You cannot claim a tax deduction for initiation fees, licences, special assessments or charges not related to the operating cost of your company. Furthermore, you cannot claim a tax deduction for paying membership dues as a member of a pension plan.
If you’re required to pay professional membership dues as a condition of employment, and your employer pays for or reimburses you for the dues, you can’t claim a tax deduction for your employment income. Depending on who the primary beneficiary is, there may be a taxable benefit for you. For example, when you’re the primary beneficiary and your employer covers your dues, a taxable benefit will be payable.
The taxable benefit amount is on your T4 slip in box 14 (employment income) or under code 40 (in the other information section) of your T4 slip.
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