Claiming the travel deduction

Instructions

1. Open the tax software
2. Review the Background information and Required slips (tax slips, receipts, etc.)
3. Provide all required information for the appropriate sections of the tax software
4. Once completed, compare your results with the solution provided
5. Afterwards, refer to the Takeaway points

Background information

Situation

Paul has permanently lived in a Zone A – Prescribed Northern Zone since June 30, 2024. He is eligible to claim 184 days for the basic residency amount and the additional residency amount. Paul received the following taxable amounts from his employer:

• Board and lodging allowance: $7,200 (box 30 of the T4 slip)
• Non-medical travel assistance in a prescribed zone: $1,000 (total taxable travel benefits from box 32 of the T4 slip, minus any amount received for medical travel from box 33 of the T4 slip)
• Medical travel assistance: $1,500 (box 33 of the T4 slip)

Paul has provided you with both the lowest quoted cost for each trip’s return airfare (using the designated city list found on Form T2222, Northern Residents Deductions) as well as the actual cost of each trip:

• Quote for the trip for medical travel: $1,500
• Actual cost of the trip for medical travel: $1,780
• Quote for the trip for other reasons: $1,000
• Actual cost of the trip for other reasons: $1,250

Paul chooses to use the employer paid travel benefits for the travel deduction calculation instead of the standard amount ($1,200 total for all trips in the year) as it is more beneficial for him.

Individuals may choose either the standard rate for all trips or the employer paid benefits for all trips, but not both.

Identification information

Required slips

T4 – Statement of Remuneration Paid (Northern Mining)

Review your results

Solution to claiming the travel deduction.

Takeaway points

Steps to follow

1. Review their background information and required slips
2. In Interview setup, tick the box next to Other deductions and credits (including school supply, digital news subscription and home buyers’ amount) in the Other topics section and the box next to Employment income and employment insurance benefits (T4, T4E/RL-6) in the Employment and other benefits section
3. Click T4 and employment income in the left-side menu, then click the + sign next to T4 income (earned in any province except Quebec) and enter the required information
4. Click Other deductions and credits in the left-side menu, then click the + sign next to Federal line 25500 – T2222 – Northern residents deduction
5. Select Zone A (Resident of prescribed northern area) from the Area for which you are claiming the northern residents deduction drop-down menu
6. Enter the start and end dates of the northern residence into the Basic residency amount, beginning (dd-mm-yyyy) and Basic residency amount, end (dd-mm-yyyy) fields, and enter 184 into the Number of days to consider for the additional residency amount field
7. Select Zone A (Resident of prescribed northern area) from the Northern area where you travelled drop-down menu, then select Other from the Purpose of the trip to a northern area drop-down menu and enter Paul Matthews into the Name of the person who travelled to or from the northern destination field
8. Enter the following amounts:
   • $1,000 into the 1 – Employee benefits with respect to northern travel field
   • $1,250 into the 2 – Northern travel expenses: Plane field
   • $1,000 into the 3 – Lowest return air fare for the northern area travel field
9. To add the medical trip, click Add Another and provide the following information:
   • select Zone A (Resident of prescribed northern area) from the Northern area where you travelled drop-down menu
   • select Medical reasons from the Purpose of the trip to a northern area drop-down menu
   • enter Paul Matthews into the Name of the person who travelled to or from the northern destination field
10. Enter the following amounts:
    • $1,500 into the 1 – Employee benefits with respect to northern travel field
    • $1,780 into the 2 – Northern travel expenses: Plane field
    • $1,500 into the 3 – Lowest return air fare for the northern area travel field

UFile automatically calculates the amount of Paul’s northern resident deduction and claims it on line 25500. The amount includes the residency deduction and travel deduction.

For more information, refer to UFile instructions.