2014-0548701E5 Volunteer Firefighters- Income Exemption

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA. Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: 1. Entitlement to the exemption under s.s. 81(4) for employee-volunteers.

Position: 1. Employee-volunteers are not entitled to the exemption if their employment position is related to firefighting.

Reasons: 1. Paragraph 81(4)(b) of the legislation.

Author: Dubis, Robert
Section: 81(4); 81(4)(b)

XXXXXXXXXX
                                                                                                                                                          2014-054870
                                                                                                                                                          Robert Dubis, CPA,
                                                                                                                                                          CA

February 5, 2015

Dear XXXXXXXXXX:

We are replying to your letter of September 25, 2014, in which you asked for our views regarding the volunteer firefighters and their entitlement to the exemption under subsection 81(4) of the Income Tax Act (the “Act”).

Our comments:

This technical interpretation provides general comments about the provisions of the Act and related legislation.  It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination.  The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R6, Advance Income Tax Rulings and Technical Interpretations.

You state that an individual in your municipality is employed in a full-time position with your fire department and also assists the fire department in the capacity of a volunteer. A condition of continued employment is that the individual must also be a volunteer firefighter in good standing. All volunteer firefighters are compensated for their volunteer services in accordance with a set policy and operational guidelines.

In general, subsection 81(4) of the Act provides an exemption of up to $1,000 that an individual receives in the year from a government, municipality or other public authority (“the employer”) for performing certain volunteer duties. The duties may include those of an ambulance technician or firefighter, or a person assisting in the search or rescue of individuals or in other emergency situations. The individual cannot have been employed or engaged by the employer in the same year, otherwise than as a volunteer, in connection with the performance of any of the duties described, or similar duties. Based on the information provided, it is our view that the individual does not qualify for the exemption under subsection 81(4) of the Act because the individual performs firefighter duties in connection with his employment with the municipality.

We trust our comments will be of assistance.

Yours truly,

 

Pamela Burnley, CPA, CA
Tax Credits and Ministerial Issues
Business and Employment Division
Income Tax Rulings Directorate

All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without the prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5.

© Her Majesty the Queen in Right of Canada, 2015

Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistribuer de l'information, sous quelque forme ou par quelque moyen que ce soit, de façon électronique, mécanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.

© Sa Majesté la Reine du Chef du Canada, 2015


Video Tax News is a proud commercial publisher of Canada Revenue Agency's Technical Interpretations. To support you, our valued clients and your network of entrepreneurial, small businesses, we choose to offer this valuable resource to Canadian tax professionals free of charge.

For additional commentary on Technical Interpretations, court cases, government releases, and conference materials in a single practical document specifically geared toward owner-managed businesses see the Video Tax News Monthly Tax Update newsletter. This effective summary and flagging tool is the most efficient way to ensure that you, your firm, and your clients are fully supported and armed for whatever challenges are thrown your way. Packages start at $400/year.