Interpretation 2010-0387391E5 indicated, respecting construction employees who travelled in their cars between different work sites to which they were assigned in the course of their employment, that "where an allowance is paid only for part of the employee's travel, the CRA is generally of the view that there are two trips, one covered by the allowance, the other which is not.” Thus, an employee who travels 60 kilometers and receives an allowance for the excess over the first 40 kilometers would make two trips: one of 40 kilometers not covered by the allowance: and one of 20 kilometers covered by the allowance. If the employee receives $0.44 per kilometer for travel, but only for the excess of travel over 40 kilometers, the allowance received by that employee is unreasonably low, since it does not cover the entire distance traveled. The employee could therefore, as stated in Interpretation 2006-0185451E5, voluntarily include the amount of the allowance in the employee’s income and deduct the expenses related to the use of the employee’s motor vehicle in computing the employee’s income.
Can the CRA indicate whether it agrees with the position set out above or whether it is maintaining its position in 2010-0387391E5? CRA stated:
The opinion described in your question has not been valid since July 15, 2011.
In the situation you described … the allowance based on a rate of $0.44 per kilometer received by the employee should be included in computing the employee’s income by virtue of paragraph 6(1)(b). Similarly, the employee may claim a deduction in computing the employee’s income for the employee’s motor vehicle expenses under paragraph 8(1)(h.1) in respect of the 60 kilometers that the employee traveled in the performance of the duties of the employee’s employment.