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If you’re an NWT evacuee, you can claim the cost of your evacuation travel as a northern resident deduction trip, with a few exceptions, says Yellowknife tax consultant Andy Wong.
Wong says you’ll be able to claim your evacuation trip against the standard amount of $1,200.
However, you must first subtract any reimbursements you received, such as the $750 GNWT travel credit or home insurance reimbursements, from your trip’s costs to figure out the net cost. To summarize: don’t double-dip.
More: Apply for the GNWT’s evacuation travel funding
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The Canada Revenue Agency lists eligible travel expenses as “air, train and bus fare, vehicle expenses, meals, hotel or motel accommodations, camping fees, and other incidental expenses such as taxis and road/ferry tolls.”
“A 15-day tax-deductible trip could total about $3,000 using per-diem meals and per-kilometre amounts,” Wong wrote to Cabin Radio. “After netting it against the $750 [travel credit, assuming you drove south to Alberta] and insurance reimbursement, you likely have leftover trip cost for the travel deduction.”
Wong also cautioned your evacuation trip likely can’t be claimed as a northern resident deduction trip against a Box 32 travel benefit provided by your employer.
For some northern residents, their employer provides a travel allowance as part of their benefits, and this amount is reflected on Box 32 of their T4 slip. Wong says this benefit is meant to be used toward a trip like a vacation – and an evacuation is not considered a work benefit.
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“Your employer would never intend for you to evacuate,” he said. “The evac trip is not an employment benefit.”
Wong did note what he says is a “significant lack of clarity” in the application form for the travel payment. In its final section, you are asked to check a box declaring you have not received “any other financial support.”
Wong said that wording is “all-encompassing” and so could be presumed to include evacuation income support payments, money provided by Indigenous governments in support to evacuees, or even $50 donated by a stranger.
How applicants’ declaration that they received no other financial assistance was being verified by authorities was not immediately clear.
The $750 evacuee income disruption support payment is a separate tax factor – it is not the same as the travel credit, and acts as a separate payment if your income was disrupted.
Wong says based on tax court cases and tax principles, that payment is considered income, as opposed to a reimbursement of personal living expenses like the travel payment.
When you apply for the income disruption support payment, you’re required to give the GNWT enough information to issue you a T4A slip, which you then report on your taxes.
The Department of Education, Culture and Employment says it is exempting the income disruption benefit from its income assistance calculation, to keep more money in people’s pockets and not reduce the amount of income assistance they receive. The travel credit amount is also not included in this calculation.
If you have questions for the CRA, you can call their northern service centre, which provides support for people and businesses in the three territories. If you’re calling with an individual tax or benefit question, the number is (866) 426-1527 and if you have a business tax question the number is (866) 841-1876. These are dedicated phone lines just for residents of the territories.
