2017-0690251I7 Exemption amounts for volunteer emergency services

Principal Issues: Whether the exemption of up to $1,000 for amounts received for volunteer emergency services is available on a per-employer basis?

Position: Yes.

Reasons: Consistent with wording and technical notes.

Author: Underhill, Cynthia
Section: 81(4)

                                                                                                                     June 9, 2017

Individual Returns Directorate                                                                      Income Tax Rulings Directorate
Assessment, Benefit, and                                                                             Business and Employment Division
Service Branch                                                                                             Cynthia Underhill

Attention: Sheila Barnard, Manager                                                             2017-069025
  Jackie Baron, Senior Programs Officer

 Exemption for amounts received for volunteer emergency services

We are writing in response to your email dated February 16, 2017, concerning the exemption for amounts received for volunteer emergency services under subsection 81(4) of the Income Tax Act (“Act”). More specifically, you asked whether an individual who provides volunteer emergency services for more than one government, municipality or other public authority (“Employer”) is entitled to the exemption of up to $1,000 in respect of payments received from each Employer.

Subsection 81(4) of the Act provides an exemption of up to $1,000 for any income derived from Employers for performing specified volunteer services. Paragraph 81(4)(a) of the Act establishes that the exemption applies only to individuals who received amounts in the year from an Employer for providing volunteer services as an ambulance technician, a firefighter, a person who assists in search and rescue of individuals or in other emergency situations. Paragraph 81(4)(b) of the Act provides that if the Minister of National Revenue so demands, the Employer must certify in writing that the individual was in the year a person described in paragraph 81(4)(a) and that the individual was at no time in the year employed or otherwise engaged by the Employer, otherwise than as a volunteer, in connection with the performance of any of the specified volunteer services or similar duties. Thus, volunteers are not entitled to the exemption if the volunteer services are related to their employment position.

Subsection 81(4) of the Act replaced the volunteers’ deduction available under former paragraph 8(1)(a) of the Act. The comments provided in the Department of Finance Technical Notes clarify that the exemption under subsection 81(4) should be granted under the same conditions as the deduction under former paragraph 8(1)(a). Former paragraph 8(1)(a) provided a deduction of up to $1,000 for each employer of the taxpayer who is a government, municipality or government authority.

Based on the technical notes and the wording of subsection 81(4) of the Act, it is our view that an individual who provides volunteer emergency services for more than one Employer could claim the exemption (of up to $1,000) under subsection 81(4) in respect of the total payments received from each Employer for services. That is, the exemption is available on a per-employer basis.

Unless exempted, a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the CRA’s electronic library. After a 90-day waiting period, a severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. You may request an extension of this 90-day period. The severing process removes all content that is not subject to disclosure, including information that could reveal the identity of the taxpayer. You can request an extension by e-mailing us at: ITRACCESSG@cra-arc.gc.ca.

We trust these comments will be of assistance to you.

Yours truly,

Nerill Thomas-Wilkinson, CPA, CA
Manager
Business and Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch

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