When filing your personal tax return in the upcoming months, if you are an employee or a partner in a partnership, consider your eligibility for the GST/HST employee/partner rebate. Generally, the employee GST/HST rebate is available to employees who are eligible to deduct employment expenses (i.e. you have a signed T2200, Declaration of Conditions of Employment, from your employer stating you can deduct certain expenses), but only if their employer is a GST/HST registrant other than a listed financial institution.
That means if you were an employee, for example, of a bank, insurance company or a health care facility, you likely would not qualify to claim the rebate. If you are a partner in a partnership that is a GST/HST registrant and are eligible to deduct expenses regarding your partnership duties, you would qualify for the rebate.
The common types of expenses that would be eligible for the rebate could include things such as:
- Automobile expenses, such as fuel, repairs, parking and capital cost allowance
- 50% of your meals and entertainment
- Work supplies
- Home office expenses on your electricity, heat, water and maintenance costs
- Union and professional dues
- Apprentice mechanic tools
- Artists’ employment expenses
You can claim the rebate on your tax return, by filing form GST370, Employee and Partner GST/HST Rebate Application – http://www.cra-arc.gc.ca/E/pbg/gf/gst370/README.html. Once this form is complete, you claim your rebate on line 457 of your income tax return. When you file your return the following year, do not forget that this rebate counts as income. Therefore you have to report any GST/HST rebate you receive on your tax return for the year in which you receive it. For example, if you claim a rebate on your tax return for 2014 and it is accepted in the calendar year 2015, you must report the rebate on your tax return for 2015.
If you were eligible to claim the rebate on a past tax return, but did not, you can still file the GST370 application form for up to four years from the end of that taxation year.
Ensure you keep the proper documentation of the expenses claimed on your return and on your rebate. The GST/HST rebate is one that is often desk audited by the CRA as part of their pre and post assessment reviews of personal tax returns.
Article written by: Greg Sawatsky, MAcc, CPA, CA