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Clergy Residence Deduction - CRA Revises Form T1223

Amanda J. Stacey
Miller Thomson LLP - Toronto Office

February 1, 2013

Previously published on January 2013

The Canada Revenue Agency has released a revised T1223 form applicable for clergy residence deduction claims for the 2012 taxation year. In particular, the CRA has added requirements to Part B of the form, which is the employer certification portion of the form.

With respect to employees who are members of the clergy, the CRA states that employers must now provide employees with a copy of their ordination certificate. It is our view that this requirement has no basis in law. While an employee claiming the deduction would be required, on audit, to prove his or her status as a member of the clergy, there is no Income Tax Act requirement to produce an ordination certificate to substantiate a claim for the deduction.

With respect to employees who are regular ministers of a religious denomination, the CRA now requires a description of how the employee was appointed to his or her role as a regular minister. IT-141R "Clergy Residence Deduction" states that to qualify as a regular minister, among other things, the person must be appointed or recognized by a body or person with the legitimate authority to appoint or ordain ministers on behalf of or within the religious denomination. Employers should include a brief description of the appointment process for their denomination here, including who within the denomination appointed the employee, and the source of that person's authority to make the appointment.

With respect to employees appointed to administrative service by appointment of a religious denomination or religious order, the CRA now requires that employers describe how the individual was appointed to his or her position. We should note that this portion of the form is somewhat unclear. On one interpretation, a description of how an individual was appointed to administrative service is only required where a separate organization (i.e. not the individual's employer) has appointed the individual in question. However, it is also plausible that such a description is required regardless of the appointing organization. It is our view that a brief description will suffice here, and should be included regardless of the appointing organization.

This is the second year in a row that the CRA has amended its T1223 form to add further informational requirements. Readers may recall that last year, for the 2011 taxation year, the CRA introduced a requirement to attach job descriptions to the T1223, and the job descriptions must show a percentage allocation of time spent on specific job duties. It should be noted that the T1223 is not required to be filed with an individual's tax return. It must, however, be kept by the individual and produced if requested by the CRA. We have concerns that these yearly changes are indicative of a desire by the CRA to restrict access to the deduction on grounds that are not necessarily in keeping with the law. Employers with concerns regarding the completion of T1223 forms for their employees are encouraged to seek advice and Miller Thomson Charity and Not-for-Profit lawyers have the requisite expertise to assist with such questions.


The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.

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