Taxes for religious Canadians

Why read this?

You’re a member of the clergy or a religious administration, or have taken a vow of poverty.

1. You’re a religious leader or administrator

• If you are paid by a religious order, report income listed in Box 14 of the T4: Statement of Remuneration Paid on Line 101 of the return.
• The value of free housing and a housing or utilities allowance may also be reported in Box 14 of the T4. They should be reported separately on your return. To do that, subtract the amount in Box 30 of the T4 from the amount in Box 14, and report the difference on Line 101. Then report the amount in Box 30 on Line 104 of the return.

2. You have taken a vow of perpetual poverty

• Claim the earned income and pension benefits you have given to the religious order on Line 256 of your return and write that you are claiming a vow of perpetual poverty next to the amount.
• If filing a paper return, attach a letter from the religious order stating you’ve taken a vow of perpetual poverty. If filing electronically, keep the letter in case CRA asks for it later.

WARNING: Investment income isn’t eligible for the vow of poverty deduction, even if that income was given to the order. It’s rare for a person who has taken a vow of poverty to have such income, says Carole Rutwind of Rutwind Brar LLP in Edmonton, but if so, treat it as you would investment income.

3. Your home is provided for or paid by a religious order

If you are a member of the clergy; regular minister; member of a religious order and in charge of a congregation, diocese or parish; or a religious order’s full-time administrative employee whose home is provided by or paid for by the order, you can claim the Clergy Residence Deduction.

• Complete Parts A and C of Form T1223: Clergy Residence Deduction and enter the amount on Line 11 onto Line 231 of the return.

WARNING: If you received free accommodation, or a housing or utilities allowance for an accommodation you didn’t own or rent, enter the greater of either the amount in Box 30 of the T4 or the amount on Line 11 of Form T1223 on Line 231 of the return.

WARNING: The deduction can’t be greater than your income during the year of religious work.

• Have your employer complete Part B of Form T1223.
• Don’t file Form T1223 with the return, but keep it in case CRA asks for it.

Sources: Carole Rutwind, CA, Rutwind Brar LLP, Edmonton; CRA.