Board, lodging, and transportation at a special work site in a prescribed zone
If an employee received a benefit or an allowance for working at a special work site that is excluded from income, this amount may affect their claim for a Northern residency deduction.
If the employee worked at a special work site in a place in a prescribed zone and kept their principal place of residence in a place outside of a prescribed zone, you will have to identify the exempt part of the board and lodging benefit or allowance on the employee's T4 or T4A slip.
In the "Other information" area of the T4 slip, enter under code 31, the exempt part that is related to work sites within 30 kilometres from the nearest urban area with a population of at least 40,000 persons. Do not include this in box 14, "Employment income."
If you are a third-party payer and are completing a T4A slip for the employee of another employer, report the exempt part using code 124 "Board and lodging at special work sites," in the "Other information" area at the bottom of the T4A slip.
You have to do this even though you did not include the excluded amount in income. This way, the employee will have all the information required to correctly calculate their residency deduction.
Example
You paid your employee $4,000 for board and lodging at a special work site that is in a prescribed zone. You and the employee filled out Form TD4, Declaration of Exemption – Employment at a Special Work Site.
Since the benefit is not included as income, you did not enter the amount of the benefit in box 14, "Employment income," or in the "Other information" area under code 30 at the bottom of the T4 slip.
Of the $4,000 you paid, $1,200 relates to a special work site that was located 27 kilometres from a town with a population of 43,000 people (the 30-kilometre part).
You have to enter $1,200 in the "Other information" area under code 31 at the bottom of the T4 slip, even though it was not entered in the "Other information" area under code 30. The employee will then enter $1,200 on their Form T2222, Northern Residents Deductions.
Note
An amount that is not included as income for allowances at a remote work location does not affect the employee's claim for a northern residency deduction.
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