I admit there is much more to taxes than the Northern residents travel deduction. Nonetheless, I often write about this deduction because you keep asking me about it. Here are a sample of the questions.
Question. “I didn’t keep receipts for my trips and I am aware the Canada Revenue Agency (CRA) loves to audit the travel claims. I only have an idea of how much I spent on my trips, which I will claim. My question is: What is the likelihood of getting audited?”
Answer: Not very likely. Based on my rough guestimate, the CRA picks on up to 5 per cent of travel claims filed. The audit risk jumps to 51 per cent for a first-time travel claim, that is to say, you can bet on an audit if you are a new Northerner. If you were audited in the previous year, and your travel claim was adjusted, your audit chance is a solid 100 per cent.
Question. “A friend of mine says that two trips a year can be claimed for each member of the household, she has a husband and two children. She says she can claim eight trips, Two for herself and two for each member of her household. Is this true?”
Answer: That is true. Each taxpayer, who received a box 32 benefit, can claim up to two trips for each member of the household. However, keep in mind the maximum travel deduction allowable is Box 32. There may not be enough box 32 benefit to claim the 8 trips.
Question. “My spouse receives a travel benefit, box 32. He claims the trips he takes alone and the trips we take together. I took a trip alone to visit my daughter in Winnipeg, Man., can he claim the trip I took alone?”
Answer: Yes, he can claim your Winnipeg trip, to the extent he does not claim more than two of your trips, regardless if yours were solo trips or family trips.
Here’s your favorite perennial question. “If I use Aeroplan points for a trip out of the NT, can I claim that trip even though I didn’t pay for the ticket? And what evidence must I have to prove this travel?”
Answer: You can definitely claim an Aeroplan (or any reward program) flight as a travel deduction assuming you received a box 32 travel benefit. There is absolutely no distinction between a reward and a purchased flight, other than you paid a small booking fee versus the airfare. The evidence needed for any flight is the flight itinerary, as in both scenarios. Whether for a reward or purchased flight, your total travel expenses include the airfare/booking fees, taxicab, car rental, gas, meals and accommodations, when applicable.
This is an unanswerable generic-type question: “How would I claim the travel deduction when I do my tax return? Please let me know by replying to this email or by calling me at (xxx) xxx-xxxx.”
Answer: Please use the Form T2222. Call the CRA at 1 800 959 8281 for assistance.
This was not a question but I am sure it is a common annoyance: “I have searched for travel information on the CRA website and nothing clearly explains it. I have called CRA and haven’t been able to speak with a human, all automated and nothing that relates to my questions.”
Answer: As soon as the phone rings after you call 800 959 8281, press the star key. This will bounce you to a live person or put you in the queue to speak with a live person. Call later in the day and avoid calling on Mondays or Tuesdays.