Claiming the travel deduction
Pre-test question
Sorry, that is incorrect
It is not necessary to claim the basic residency amount to be eligible to claim the travel deduction.
That is correct
It is not necessary to claim the basic residency amount to be eligible to claim the travel deduction.
Instructions
- Open the tax software
- Review the Background information and Required slips (tax slips, receipts, etc.)
- Provide all required information for the appropriate sections of the tax software
- Once completed, compare your results with the solution provided
- Afterwards, refer to Key points of the tax software and the Takeaway points
Background information
Situation
Paul has permanently lived in a Zone A – Prescribed Northern Zone since June 30, 2025. He is eligible to claim 184 days for the basic residency amount and the additional residency amount.
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.
| Category | Information |
|---|---|
| Name | Paul Matthews |
| Social insurance number (SIN) | 000 000 000 |
| Address | 123 Main Street City, Province X0X 0X0 |
| Date of birth | August 25, 1997 |
| Marital status | Single |
Required slips
T4 – Statement of Remuneration Paid (Northern Mining)
Text version of the above image
T4 – Statement of Remuneration Paid
Protected B
Employer’s name: Northern Mining
Employee’s name and address:
Last name: Matthews
First name: Paul
123 Main Street
City, Province X0X 0X0
Box 12: Social insurance number: 000 000 000
Box 14: Employment income: 35,000.00
Box 16: Employee’s CPP contributions – see over: 1,874.08
Box 18: Employee’s EI premiums: 580.84
Box 22: Income tax deducted: 2,310.88
Box 24: EI insurable earnings: 35,000.00
Box 26: CPP/QPP pensionable earnings: 35,000.00
Box 44: Union dues: 420.00
Box 45: Employer-offered dental benefits: 2
Other information (see over):
Box 30: 7,200.00
Box 32: 2,500.00
Box 33: 1,500.00
Review your results
Solution to claiming the travel deduction.
Key points of the tax software
Important note
To access complete instructions on the various steps of entering data into the software, click on the title of each section below.
Paul's interview
- Click T4 and employment income in the left-side menu
- Click the + sign next to T4 income (earned in any province except Quebec)
- Enter the required information from the T4 slip
- Click Other deductions and credits in the left-side menu
- Click the + sign next to Federal line 25500 – T2222 – Northern residents deduction
- Select Zone A (Resident of prescribed northern area) from the Area for which you are claiming the northern residents deduction drop-down menu
- 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
- Enter the number of days into the Number of days to consider for the additional residency amount field
- Select Zone A (Resident of prescribed northern area) from the Northern area where you travelled drop-down menu
- Select Other from the Purpose of the trip to a northern area drop-down menu
- Enter the information and amounts for the trip for other reasons from the background information into the corresponding fields
- To add the medical trip, click Add Another
- 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 the information and amounts for medical travel from the background information into the corresponding fields
Takeaway points
- Paul is eligible for the Northern residents deductions because he lived in a prescribed zone for at least 6 months in the tax year
- The tax software automatically calculates the amount of the deductions on form T2222 and claims the total amount on line 25500 of the tax return:
- the amount includes the residency deduction and travel deduction
- The travel deduction has two different types of trips:
- trips for medical services
- other trips for non-medical personal reasons
- Even if an individual does not claim the residency deduction, they can claim the travel deduction
- The non-medical travel assistance amount is calculated by subtracting box 33 from box 32 of the T4 slip:
- in this case Paul’s non-medical travel assistance is $1000
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