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arlyn_pagaduan
New Member

Can I deduct my Vehicle Expense when the employee receive or are entitled to receive a motor vehicle allowance?

 
2 Replies
Turbotax Lein
Level 4

Can I deduct my Vehicle Expense when the employee receive or are entitled to receive a motor vehicle allowance?

As per CRA, you can deduct your motor vehicle expenses if you meet all of the following conditions:

  1. You were normally required to work away from your employer's place of business or in different places.
  2. Under your contract of employment, you had to pay your own motor vehicle expenses. You are not considered to have paid your own motor vehicle expenses if your employer reimburses you or you refuse a reimbursement or reasonable allowance from your employer.
  3. You did not receive a non-taxable allowance for motor vehicle expenses. Generally, an allowance is non-taxable when it is based solely on a reasonable per-kilometre rate.
  4. You keep with your records a copy of Form T2200, Declaration of Conditions of Employment, which has been completed and signed by your employer.

If you have received a non-taxable motor vehicle allowance and can show that the employment-related motor vehicle expenses are in excess of the allowance and voluntarily include the amount of the allowance in income, you can deduct your motor vehicle expenses if conditions 1, 2, and 4 are met.

 

For more information, you can go to the following link:

Allowable Motor Vehicle Expenses 

thakar88
Level 3

Can I deduct my Vehicle Expense when the employee receive or are entitled to receive a motor vehicle allowance?

Thank you for choosing TurboTax.

Yes, you can deduct vehicle expenses when the automobile allowance is a taxable benefit and is reported on your T4 slip in box 40. In the end, this amount added to your net income, so you can claim any eligible expenses to offset this income.

Please read this article for more information:https://turbotax.intuit.ca/tips/employment-expenses-what-motor-vehicle-expenses-can-you-claim-12004

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