Proposed changes to CRA rules on northern travel deductions a good call, tax expert says

Proposed changes to CRA rules on northern travel deductions a good call, tax expert says

The Canada Revenue Agency (CRA) has proposed changes to simplify what residents in the North need when claiming a travel benefits deduction on their tax return.

The changes would relax, to a degree, the necessary airfare documentation.

The federal government has made promises to look into how Northern tax payers are treated after it was reported that northerners have their tax returns audited at a higher rate than in other jurisdictions.

'MacGyvering' the deduction to make it work

Currently, claimants need to have documentation that shows the lowest return airfare for their trip the day they went on it. The purpose is to make sure people aren't claiming excessive costs.

Andy Wong, a tax associate at Crowe MacKay in Yellowknife, said gathering that information can be complex.

People try to get that information from airlines but not all of them provide it. One airline in the North that does, only provides an average, he said.

"We're MacGyvering this deduction to make it work," Wong said. "The current way simply means that there's total confusion, and there are errors made by taxpayers, the CRA, by tax professionals."

The proposed amendment from the CRA, as described on its website, would let people claim "a reasonable amount" instead, and it can be for a date "within a reasonable amount of time of when the trip is made."

Also, the source of the cost can come "from a travel website."

Key to that would be vacation travel assistance (VTA), money the federal government offers to its employees for transportation in isolated communities, Wong said.

The government lists specific amounts employees can claim depending on the community they're travelling from.

Wong said people "will stand up and applaud" if the CRA makes it clear that anyone can used VTA rates to calculate their airfare claims.

The CRA is collecting feedback on these proposed changes via email and physical mail until April 17.