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Can all kilometres be claimed on T2200 form for taxes?

Expert: John R Mott

Kev asked:

I'm full-time employed. My company policy only allows for reimbursements of kilometers traveled (46 cents) if I drive beyond the city limits. I am not reimbursed within city limits.

If I have a T2200 signed and inner and outer city are assumed equal (i.e. 15K / 15K per yr). Can I claim the kilometers within city limits? Will it be more beneficial for me to claim T2200 for both inner and outer limits instead (i.e. forgo the employee benefit)?

John R Mott answered:

Assuming a properly completed T2200, the accepted approach is to compute and deduct your auto expenses for all employment related travel, including inside and outside city limits. You do not have to forego the reimbursement, you just have to reduce your deduction by the reimbursement. In other words, you claim a deduction for the un-reimbursed portion of your business related auto expenses.

Obviously, if the reimbursement exceeds your expenses, there is no deduction. CRA may require an explanation as to why you are claiming for kilometers that your employer does not see fit to reimburse. This could be a problem. I infer from your company's policy that they probably consider public transit acceptable within city limits and therefore do not require a car. However, your employer must be willing to state on the T2200 that they do require you to have an auto (for all travel claimed). There is case law to the effect that 'require' in this context does not only mean 'mandatory,' but also necessary for expected job performance. Nevertheless, this could be a tricky distinction to navigate.

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