What you need to know about the tax consequences of earning and spending loyalty points
In Canada, there can be tax requirements involving bonus points if the points are a result of business travel, or you purchase business items and get reimbursed for them. If you get cash from the points or the points are a form of employee payments, they are subject to tax. How do you know how much is taxable? The taxable benefit is equivalent to the fair market value of the annual rewards. If an employer controls the points, the employee is obligated to report this on his/her T4 slip.
- One must be aware of the tax consequences when using travel points.
- The CRA has made many changes over the years regarding the use of points as it relates to taxes.
- The use of travel points for business and personal may differ with regards to tax consequences.
“But be sure to consider the tax consequences before redeeming those points, especially if you’ve accumulated some of the points through work.”
Read more: https://business.financialpost.com/personal-finance/taxes/what-you-need-to-know-about-the-tax-consequences-of-earning-and-spending-loyalty-points