You’ve put the time and effort to earn a recognized designation or professional membership into a particular group. To maintain your status in these groups, you have to pay annual membership fees that come out of your cash flow. It’s important to be aware that these annual dues are tax deductible if the professional status or group is recognized by a federal, provincial or foreign body.
Allowable Deductions
Tax deductions can be claimed for annual and professional dues that allow you to maintain your employment. You may be able to deduct the following:
- Membership fees in a trade union or an association of public servants
- Professional dues that are mandatory by provincial or territorial law
- Malpractice liability insurance premiums
- Membership fees required to maintain your professional status
- Advisory committee fees mandatory under provincial or territorial law
Excluded
Keep in mind that certain groups may have other professional dues associated with them which may not be deductible. This includes things such as entrance or initiation fees, licenses, and special assessments.
As well, if you’re paying membership dues as part of your employment and your employer reimburses you for the costs of those fees, you will not be able to deduct the fees. If the employer’s payment of the costs does not appear on the T4 as a taxable benefit to the employee, no deduction can be claimed. However, if there is a taxable benefit to the employee, they can claim an offsetting deduction for on allowable dues on Line 21200 of their tax return.
Example Janice earned her Chartered Investment Manager designation (CIM) last year. This year, she has to renew her designation at a cost of $300. The designation is necessary for her employment. The $300 is tax-deductible for Janice.
For more information, please Government of Canada’s official website regarding annual union, professional or like dues.
