If you’re an employee and you use your car for work, you may be entitled to write off some of your automobile expenses on your tax return, but only if you meet four conditions.
The four conditions
The first condition for auto expense deductibility is that you are normally required to work away from your employer’s place of business or in different places. Secondly, under your contract of employment, you are required to pay your own automobile expenses. Note that the Canada Revenue Agency’s position is that you are not considered to have paid your own automobile expenses if your employer reimburses you (or you refuse a reimbursement or reasonable allowance from your employer.)
The third condition is that you don’t receive a non-taxable allowance for motor vehicle expenses. Generally, an allowance is non-taxable when it is based solely on a “reasonable per-kilometre rate.”
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