Calculating the employee home-relocation loan deduction

For 2018 and later tax years, the home‑relocation loan deduction has been eliminated. This change was announced in the 2017 federal budget which received royal assent on June 22, 2017 (Bill C-44).

Forgiven Loans

A loan to an employee may be partly or fully forgiven (the employee does not have to repay the loan). In either case, the forgiven amount is considered employment income and is added to the employee's T4 slip for the year the amount is forgiven. For more information, see Interpretation Bulletin IT-421, Benefits to individuals, corporations and shareholders from loans or debt.

Reporting the benefit

If an employee receives a loan or incurs a debt because of employment, report the benefit in box 14, “Employment income,” and in the “Other information” area under code 36 at the bottom of the employee’s T4 slip.

If a person or partnership that was a shareholder (or was related to a shareholder) receives a loan or incurs a debt, you generally have to report the benefit on a T4A slip. Enter the amount under code 117, “Loan benefits,” in the “Other information” area at the bottom of the T4A slip.

Note

The taxable benefit must be reported on a T4 or T4A slip even if the borrower is eligible to deduct the interest.

Prescribed interest rates

To get the current prescribed rates of interest, go to Prescribed interest rates.

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