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Tips about meal tax deductions


It’s now been 15 years since Don Wilkinson, a truck driver from Winnipeg, won his meal-expense case in tax court. You don’t remember Don Wilkinson? Well, you should, every time you order food at a truck stop.

On his 1997 tax return, Wilkinson claimed meal expenses using a “simplified” federal flat-rate calculation of $40 a day instead of the customary $33 a day at the time. He got audited, penalized, and went to court arguing that $33 didn’t reflect the real cost of three square meals on the road.

In August 2000, a judge agreed. The ruling didn’t establish what was “reasonable” for a truck driver to claim, it only meant that in Wilkinson’s case, $33 was not.

The decision opened the door for drivers to challenge the per diem amount on their tax returns and for the CRA to revise its standards on meal deductions, including raising the rate to $17 a meal.

It also got owner/operators thinking about incorporating and drawing a reasonable meal allowance per diem and ditching the TL2 simplified method altogether. Fifteen years later, I’m still answering questions about meal expenses. Here are a few facts you should know:

Do I need receipts?

Like anyone else who works away from his employer’s place of business and who does not receive an allowance for meals, a truck driver can claim his actual meal costs provided that each expense is reasonable, itemized, and verified by a receipt. Most truck drivers use the simplified method, which requires them to keep a travel record but not receipts for each meal.

How much can I claim?

Meals claimed using the simplified method are calculated at $17 per meal. You can deduct 50% of that expense unless you qualify as a “long-haul truck driver,” in which case you can claim 80%.

Am I a long-haul truck driver?

A long-haul truck driver is defined as an employee whose job is transporting goods in a long-haul truck that has a GVWR of more than 11,788 kg; is away from his home municipality or metro area for at least 24 hours; and travels at least 160 km from the establishment to which he regularly reports to work.

If you’re back home within 24 hours of your departure, your meal expense deduction is 50%. And CRA expects you to eat at least breakfast and perhaps supper at home.

What if I eat more than three meals a day?

The old “every four hours is a meal” rule doesn’t apply. If you’re away for 12 hours you qualify for three meals; for less than 12, zero meals.

What about food from the grocery store?

This deduction is supposed to compensate for the extra cost of having a restaurant prepare your meal.

Groceries bought on the road are treated no differently than groceries you would have paid for and eaten at home.

Can I claim GST/HST on meals?

Great question. Here’s a test to see if your tax-return preparer knows his stuff. If you’re an employee or incorporated owner/operator with a T4 from your company and claiming a meal deduction using a TL2 form, your claim is an employment expense.

Therefore you can be refunded the GST/HST part of your meal deduction that represents meals in Canada.

If you paid GST/HST and don’t see anything on line 457 of your tax return, call me.

I don’t have paper logs. Now what?

Canadian and US laws require truck drivers to keep their logbooks for six months. It’s a safety record.

If you claim meals as a deduction on your tax return, your logbook is also a tax document that you have to keep for seven years like any other tax slip or receipt. There’s an obvious conflict.

Talk to your EOBR supplier or your carrier and find out if you can indeed download your logbook data.

If you haven’t been downloading or printing your logs regularly, your information may be gone. The best you can do is to download as much of your logbook data as you can right away and then set up reminders to start yet another routine and do it each month on a go-forward basis. 

***

Scott Taylor is vice-president of TFS Group, providing accounting, bookkeeping, tax return preparation, and other business services for owner/operators. Learn more at www.tfsgroup.com or call 800-461-5970.


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19 Comments » for Tips about meal tax deductions
  1. Lucien Bleau says:

    Hi Scott,

    I’m still teaching owner ops about incorporating and paying themselves a Subsistence Allowance and claiming the GST ITC.
    Regards,

    Lucien

  2. Murray Cooling says:

    Besides showers is there any other expenses that I can deduct from my taxes. What about pens and paper. Also if I purchased a memory foam products for my bunk.

    • Scott Taylor says:

      If you are an employee then meals, showers and hotels rooms is all you can deduct. Logbooks support the meals only. You need actual receipts for showers and hotel rooms.
      If you are an owner-operator then the answer is Yes, with receipts.

  3. Scott says:

    Hello Scott;

    Thanks for the posted tips about meal tax deductions.

    I’m a bit confused: you state that a driver out for less than 12 hours can claim zero meals (see your text quoted below). The CRA states on it’s website: “…you can claim one meal after every four hours from the departure time, to a maximum of three meals per day.”

    If I’m out for less than 12 hours – such as 9 hours – I can claim two meals, no?

    Thanks for any help Scott.

    ==================================
    “Tips about meal tax deductions
    What if I eat more than three meals a day?
    The old “every four hours is a meal” rule doesn’t apply. If you’re away for 12 hours you qualify for three meals; for less than 12, zero meals.”

    • Scott Taylor says:

      CRA says many things in many places so it is hard to find answers. I think I found your quote within IC73-21R9 which is the bible for meals however it is under the Limitation of Number of Meals in a Day heading.
      At the very beginning of that Information Circular is states:
      Paragraph 8(1)(g) of the Income Tax Act contemplates journeys of such substantial distance and duration as to require disbursements for both meals and lodging while away from the relevant municipality and metropolitan area, if there is one. Therefore, to make a claim under paragraph 8(1)(g) of the Income Tax Act, employees must generally be away from home overnight in the performance of their employment duties. The deduction claimed under paragraph 8(1)(g) of the Income Tax Act is not intended for employees who return to their homes at the end of each day, and make disbursements for meals only as a matter of course.

      However, the CRA is prepared to allow a deduction for meals only, even though no disbursement has been made for lodging, provided the duties of employment required the employee to stay away overnight and the employee can demonstrate that, rather than paying for lodging, he or she used other facilities. This may be the case where a transport employee uses a truck equipped with a sleeper cab.

      A deduction for meals only may also be allowed (to the extent of a reasonable number of meals) where a transport employee, although regularly required to travel away on journeys of substantial distance and duration so as to require disbursements for both meals and lodging, occasionally travels, as part of the employment, on journeys of shorter distance and duration not requiring him or her to stay away from home overnight. Where the shorter journey is scheduled for ten hours or less, the CRA would expect the transport employee to eat breakfast and dinner meals at home, as is the case with most other employees. Accordingly, only one meal per day, namely lunch, will be permitted in these circumstances and only to those transport employees claiming meal expenses under paragraph 8(1)(g) of the Act.

      Therefore the answer is No, if you are normally home every night.

  4. Neven-hr says:

    What about short haul truck drivers (driving long haul truck locally)? They are home every day, but can they claim at least one meal?

    • Scott Taylor says:

      No you can’t. Unless you are away for 12 hours then you can have 3 meals, less than 12 hours is zero.

      Paragraph 8(1)(g) of the Income Tax Act contemplates journeys of such substantial distance and duration as to require disbursements for both meals and lodging while away from the relevant municipality and metropolitan area, if there is one. Therefore, to make a claim under paragraph 8(1)(g) of the Income Tax Act, employees must generally be away from home overnight in the performance of their employment duties. The deduction claimed under paragraph 8(1)(g) of the Income Tax Act is not intended for employees who return to their homes at the end of each day, and make disbursements for meals only as a matter of course.

  5. Steven H says:

    On the third paragraph of the reply on Feb 26 at 3:43…it states that in trips of 10 hours or less that CRA will pay for only lunch…expecting breakfast and dinner to be consumed at home. So that means one meal per that time.

  6. Michel Roussel says:

    Showers do i need receip ?

    • phil says:

      yes. Also the reason it is every four hours, despite scott’s reasons and quotes, is that there have been several successful actions by other transport sector workers including bicycle messengers, who are allowed the flat rate without leaving their home area as long as they cannot return home between breakfast and supper. In the case of bike messengers, it was food as fuel and they could claim 1 meal every 4 hours of work.

  7. Brenda k says:

    As I understand it, long haul truckers must haul goods or provide services. So goods are a finished product. What about hauling fuel, logs, chips etc?

  8. Sue H says:

    Hi Scott Taylor – thank you for this commentary, it has helped me a great deal. From my layman’s point of view I think this amounts too:
    a) Plus 12 hours – automatic 3 meals at $17/meal, but intended for overnight trucking only. The first meal started at home before work, therefore the following morning would count as the third meal.
    b) Exceptions to the rule exist based on Transport
    Specific needs (aka: imaginative accounting). ;o)
    – possible mid meal (lunch) inclusion, criteria unclear;
    – bicycle hotshot service, ‘food as fuel’ for bicycler’s therefore every four hours, etc ;
    – $20/meal compensation can be considered, if special circumstances proven where meal costs are more then what the general transportation driver is paying, etc; .
    – gst/hst generally reimbursed to non-employees.
    ————————————
    EEK! Is my synopsis about right, or have I missed anything? ugh
    Thanks,
    from Clueless Canadian.

  9. Beth says:

    Hello Scott, thank you for such a great article. I still need a bit of clarification for this specific trucker. He is a self-employed, sole proprietor trucker who mostly hauls short. So, can he use the simplified method (like an employee does) of $17 per meal for his 12 to 24 hour days? Or as a self-employed trucker, is he only allowed to claim the actual amount of receipts for meals bought during his 12-24 hour days? Thanks!

  10. Cheryl says:

    Equipment operators that stay in camps and haul their equipment place to place who are gone for 12-15 hours a day ? Can they claim meals

  11. Tim says:

    My body needs “fuel”( food ) for me to physically unload my loads ?

  12. Jenny says:

    Regarding the claim for the gst/hst paid on meals, it has been my experience that many transportation companies will not disclose their hst number & refuse to sign the GST-370. Without the signed GST-370, CRA disallows the claim for gst/hst. If you are a transport employee or an owner-operator, be sure to find out whether or not they will sign the form before you claim the gst/hst. I have seen several reviews where the meals & related expenses are disallowed.

  13. Jenny says:

    I meant to say where the gst/hst on the meals & related expenses are disallowed.

  14. Jaspreet says:

    Hi Scott
    I am long haul truck driver not owner , my trucking company pay through my corporation.I am new in this business ,so wandering how my meal allowance to be claim.
    Do i get my meal allowance claim under corporation meal expense as per diem or i have to claim under personal expenses when i file T1.

    Thanks

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