The federal government has raised the amount that can be claimed for meals under a variety of provisions in the Income Tax Act by 35%, from $17 to $23 a meal or $69 a day. The last change occurred in 2009. The new amount is generous, as the purchasing power of a 2009 dollar today is 83% of its value. If adjusted for inflation, the $17 meal in 2009 would cost $20.53 in 2020. More good news: the change is retroactive to January 1, 2020. There are three groups of taxpayers who will be cheering:
First, employers can use the new $23 a meal amount to determine whether an overtime meal or allowance, or the meal portion of a travel allowance is taxable benefit or not.
Specifically, an employer may exclude the value of an overtime meal or allowance, or certain travel allowances (including a meal portion), from an employee’s income on the T4 slip. However, to do so, one of the conditions is that the value of the meal must be reasonable. This new $23 per meal amount can be used as a guide for reasonableness.
Truckers will also be happy with this news. If they use the simplified method to account for their meal deductions on Form TL2, the new flat rate per person again has increased from $17 to $23 per meal.
So will individuals who are claiming moving expenses, medical expenses, or the northern resident’s deduction. The new $23 amount will be used to calculate meal expenses using the simplified method under which no receipts are required to account for meal deductions.
Specific details for claiming any of these lucrative deductions can be found in the DFA-Tax Services Specialist™ Program for professional tax advisors. Newly updated courses in the program include:
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