The Canada Revenue Agency (CRA) updated Chapter 1: Health and Welfare Trusts of Income Tax Folio 1: Specific Plans Offered by Employers.
Effective July 27, 2015 Income Tax Folio S2‑F1‑C1, Health and Welfare Trusts, replaces and cancels Interpretation Bulletin IT‑85R2, Health and Welfare Trusts for Employees dated July 31, 1986. The Chapter was created to clarify the conditions that must be satisfied for a trust arrangement to qualify as a health and welfare trust. It also outlines the tax implications to an employer for contributions made to a health and welfare trust, the tax implications to an employee receiving benefits from the trust, and the taxation of the trust itself. The Chapter also serves to explain the CRA’s position regarding the taxation of employee health and welfare benefit programs administered through a health and welfare trust.
This bulletin highlights and explains key aspects of this new regulation that might affect trustees, unions and employers.
Please click on the following link to download the PDF of the full article: