A refund of union dues by a union was distributed from its administration fund in 2004 to current members and those who were members on December 31, 2001.
Is the following position in 9530937 still valid?
If the amount refunded to a union member in a year exceeds the individual’s paid dues for the year, the excess will reduce the amount of union dues otherwise deductible by that union member for a subsequent taxation year.
Should individuals who are retired or have left their jobs and received a refund from the union in 2004 add the amounts received, as a refund of union dues, to their income?
After paraphrasing ss. 6(1)(j) and 8(1)(i), CRA stated:
[A] taxpayer who receives, in a year, a refund of dues that equals or exceeds the taxpayer’s annual dues paid to the union in that year cannot deduct the annual dues in the taxpayer’s employment income pursuant to paragraph 8(1)(i). In addition, the portion of the refund that exceeds the individual’s annual dues must be added back to the individual’s income pursuant to paragraph 6(1)(j).
… 9530937 is no longer valid. … [T]he amount of their union dues paid in 2004 reduces or annuls the deduction provided for in subparagraph 8(1)(i)(iv) in computing their income. For those members who received an amount in excess of their 2004 union dues … the excess portion must be included in their income pursuant to paragraph 6(1)(j) in the year it is received.
… [I]ndividuals who are retired or have changed employers and who received a refund of union dues in 2004, given that they were members of the union on December 31, 2001, must include the refund of dues pursuant to paragraph 6(1)(j) in their 2004 income.