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EHT Exemption and Residential Tenancy Agreement. Employer Health Tax (EHT) Each location of a registered charity may be treated as a separate employer for EHT purposes with each location entitled to claim a separate exemption.
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Employer Health Tax (EHT) Each location of a registered charity may be treated as a separate employer for EHT purposes with each location entitled to claim a separate exemption. Effective January 1, 2014 - to provide greater Employer Health Tax (EHT) relief to small businesses, the government proposes to increase the amount of annual payroll that is exempt from the tax from $400,000 to $450,000 and index this amount for inflation. To better target EHT relief, the exemption would be eliminated for private-sector employers (including groups of associated employers) with annual Ontario payrolls over $5 million. Registered charities would continue to claim the exemption at all payroll sizes.
Separate locationA registered charity that is an eligible employer can treat each of its locations as a separate employer and each location will be eligible to claim the exemption for the year. • There must be formalized evidence that the location is separate from the main body of the organization and has a separate address and phone number. • There is supporting evidence that a location belongs to the charity • (e.g., copies of leases, deeds or purchase agreements, property tax bill, or other third party documentation to show continued exclusive occupancy during the period) • The location is publicly advertised on the charity's letterhead, on business cards, in telephone directories, or through other information readily accessible by the public such as pamphlets or internet sites. • This will not always be the case, especially where privacy and security concerns are evident in situations involving residences or shelters, etc.
The registered charity has free access to the location. • Keys are readily available to employees and they have unrestricted rights to enter the property • There is a separate workspace or office within the location which is for the sole use of the employees. • The Charity has not sub-leased the property to a tenant. • Clarification received from Senior Tax Compliance Officer, Client Service Branch from the Ministry of Revenue • Support workers are assigned to specific residences and have keys • Most residences are 24 hour support and provide exclusive use of space within the residence for worker administration • Some residences have varying degrees of support, however, although there may not be an office within the residence, there is a designated space for support staff to work that is exclusively used by the Community Living support staff. • All tenants sign an agreement of accommodation support, but it is not a sublease agreement; it is an agreement to receive support from Community Living.
For EHT purposes, it is deemed that a sub-lease is in place if there is a formal agreement between the resident and the owner of the property which outlines residency requirements. Some requirement are: • Rent to be paid, definitions of residency • Term and notice clauses • Responsibility clauses • Liability clauses • Schedule of costs and which party is responsible for these costs • Used to resolve residency disputes • The agency does not have free access to the premises, nor do they have a work space/office space in the premises. • If the above exists and it is established that a sub-lease is present, then the EHT exemption would no longer be applicable for that location.
Background • Remember Bill 120 – Residents Rights Act, May 31, 1994 (no longer applies) • Residential Tenancies Act, 2006 • Agreement required • 139. (1) there shall be a written tenancy agreement relating to the tenancy of every tenant in a care home • .care home as defined means a residential complex that is occupied or intended to be occupied by persons for the purpose of receiving care services, whether or not receiving the services is the primary purpose of the occupancy • (2) the agreement shall set out what has been agreed to with respect to care services and meals and the charges for them
Developmental Services Compliance Checklist • Developmental Services does not require that a residency agreement be present. • They do require that within an organizational structure: • that the individual’s support plan identify the manner in which services and supports are to be provided. • the individual’s support plan identify amount of allocated resources • that the agency maintain adequate support staff • that there is a method of review and on-site inspections • that safeguards are in place that include care and maintenance of personal property, and the residence in which they live.
Best Practice • Within the person’s support planning document add the clauses that will be in compliance with the Residential Tenancies Act, 2006 (care services and meals) as well as the Ministry standards. • Care services are specific to the Personal Outcomes Plan including goals, expected outcomes and allocated resources. • The following will be provided for the individual within the monthly resident fee: meals • shelter costs which may include utilities, general insurance, property maintenance, transportation, mortgage payments, and other household needs. • The agency charges related to residency and support services will not impinge on the individual's comfort allowance established in Regulation. • The person will be required to contribute his/her own funds to pay for his/her voluntary participation in activities and any other expense that is not provided as part of the basic agency housing or support services. • social events, vacation costs, personal needs including any special necessities.
