Recent Revisions to CRA’s Clergy Residence Deduction Form: A Positive Development

Charity law and policy, Income Tax Act

Recent Revisions to CRA’s Clergy Residence Deduction Form: A Positive Development

In a previous article, CCCC reported on some changes made in December 2012 to CRA’s Form T1223 – Clergy Residence Deduction, including an additional requirement that a claimant “provide a copy of his or her ordination certificate” to CRA.

CCCC expressed some concerns at that time about this new requirement. In particular, it was noted that some religious groups’ formal process of clergy recognition might not involve the issuance of an “ordination certificate”. Indeed, this is reflected in CRA’s own Interpretation Bulletin IT-141R, which recognizes that the process of appointing a member of the clergy might not be referred to as “ordination” at all, and might not be done by someone higher up in the ecclesiastical hierarchy; it may be done by the congregation itself. Requiring an “ordination certificate” on the T1223 therefore created confusion, and CCCC presented these concerns to CRA.

Further to those submissions, the T1223 has recently been revised (here is the most recent version). The relevant section of the form now reads as follows:

Was this employee…a member of the clergy? If so, specify his or her title as designated by the denomination or church that formally recognized him or her as well as the name of that denomination or church. Provide a copy of his or her proof of appointment (for example, an ordination certificate).” [emphasis added]

CCCC is pleased to report on this revision, and notes that the new wording provides helpful clarification that proof of an appointment of a member of the clergy may take a variety of different forms (of which an ordination certificate is but one example).

Individuals eligible for the clergy residence deduction, as well as their employers, should note that some proof of appointment is still required for members of the clergy (it does not need to be filed with CRA, but it should be readily available should CRA request it).[1]

Although not all religious traditions engage in an “ordination” process, there should be some demonstrable evidence of a clergy member’s formal and legitimate recognition for religious leadership within the religious organization. Form T1223 does not provide further examples, but CCCC suggests the following as examples of documents that could be retained for this purpose:

  • a letter from the church’s leadership affirming the act of recognition
  • a copy of the bulletin of the service in which the recognition act took place,  and/or
  • minutes of a board decision appointing the clergyperson to special status.

CCCC appreciates the opportunity to make submissions to CRA on matters affecting its member charities, and would like to express appreciation to CRA for responding to our feedback in this matter. CCCC also has a number of resources available to its members related to the Clergy Residence Deduction, which can be found in the resource section of our website.

[1] If, however, the claimant is seeking early tax relief through the filing of a T1213, proof of appointment may need to be filed, along with other documentation. For more information about that process, see “The Clergy Residence Deduction and Getting Taxes Reduced at Source – An Update”.

Noteworthy is provided for general information purposes and does not constitute legal or professional advice. Every organization’s circumstances are unique. Before acting on the basis of information contained in this blog, readers should consult with a qualified lawyer for advice specific to their situation.

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