Income Tax Act — I-3.3 110.7
Residing in prescribed zone 110.7 (1) Where, throughout a period (in this section referred to as the “qualifying period”) of not less than 6 consecutive months beginning or ending in a taxation year, a taxpayer who is an individual has resided in one or more particular areas each of which is a prescribed northern zone or prescribed intermediate zone for the year and files for the year a claim in prescribed form, there may be deducted in computing the taxpayer’s taxable income for the year (a) the total of all amounts each of which is the amount, in respect of a particular period during the taxation year, determined by the formula A × B where A is the specified percentage for the particular area in which the taxpayer resided during the particular period, and B is the total trip costs to the taxpayer in respect of trips that begin during the particular period; and (b) the lesser of (i) 20% of the taxpayer’s income for the year, and (ii) the total of all amounts each of which is the product obtained by multiplying the specified percentage for a particular area for the year in which the taxpayer so resided by the total of (A) $11.00 multiplied by the number of days in the year included in the qualifying period in which the taxpayer resided in the particular area, and (B) $11.00 multiplied by the number of days in the year included in that portion of the qualifying period throughout which the taxpayer maintained and resided in a self-contained domestic establishment in the particular area (except any day included in computing a deduction claimed under this paragraph by another person who resided on that day in the establishment). Specified percentage (2) For the purpose of subsection 110.7(1), the specified percentage for a particular area for a taxation year is (a) where the area is a prescribed northern zone for the year, 100%; and (b) where the area is a prescribed intermediate zone for the year, 50%. Restriction (3) The total of all amounts determined under paragraph (1)(a) for all taxpayers in a taxation year in respect of an individual shall not be in respect of more than two trips made by the individual that begin in the year (other than trips to obtain medical services that are not available in the locality in which the taxpayer resided). Additional restrictions (3.1) For the purpose of paragraph (1)(a), an amount may only be included in the amount determined for B for a particular area for a taxation year if (a) the amount is not otherwise deducted in computing the income for any taxation year of any individual (except by an employer under section 9 if it is included in an employee’s income); (b) the amount is not included in determining an amount deducted under subsection 118.2(1) for any taxation year; (c) the amount is in respect of trips made by the taxpayer or an eligible family member of the taxpayer that begin during the part of the year in which the taxpayer resided in the particular area; and (d) neither the taxpayer nor an eligible family member of the taxpayer is at any time entitled to a reimbursement or any form of assistance (other than a reimbursement or assistance included in computing the income of the taxpayer or the eligible family member) in respect of trips to which paragraph (c) applies. Additional restriction (3.2) If all amounts determined under paragraph 7304(2)(a) of the Income Tax Regulations are nil in respect of trips (beginning in the taxation year) made by an individual, the total of all amounts determined for B in paragraph (1)(a) in the taxation year for all taxpayers in respect of the individual must not exceed the standard amount for the individual for the taxation year. Deemed standard amount (3.3) If an employer-provided travel benefit was claimed by a taxpayer in respect of an individual in respect of the taxation year, the standard amount for the individual is deemed to be nil for the taxation year. Board and lodging allowances, etc. (4) The amount determined under subparagraph (1)(b)