What is the issue?
Taxable income from writing comes from many sources, and can arrive in cycles that stretch across many years, creating uncertainty and confusion when it is time to pay taxes and/or claim expenses against that income. The Writers’ Union of Canada advocates for progressive tax policies that recognize the special nature of writers’ incomes.
What TWUC is doing
The Union is in regular contact with the federal government regarding tax policy. We have advocated to have arts grants made tax free, and for authors and other artists to be given the option of income tax averaging over five years to smooth the peaks and valleys of arts income. We will continue to push on these points.
Recently, the Union was involved in a small ad hoc coalition of arts organizations who met with representatives from the Canada Revenue Agency and the Ministries of Finance and National Revenue. At issue was confusion about the nature of some taxable income sources for artists. In the absence of tax-free status for arts grants, we would at least prefer to see arts grants recognized as earned income against which valid business expenses can be claimed. Many authors and artists, or their accountants, have run up against CRA opinion that arts grants are not valid self-employed business income. This work resulted in an important restatement of CRA policy, officially recognizing grants as earned income (see link below).
This confusion resurfaced in late 2020 when a number of artists, including authors, were informed by CRA that their eligibility for the Canada Emergency Recovery Benefit (CERB) program might be retroactively denied, triggering a requirement to pay back any relief funds already received. TWUC maintains that arts grants are valid earned income both for the CERB program and for the purposes of claiming business expenses.
What you can do
Educate yourself about the nature of taxes for the writing business. TWUC has published an excellent professional development booklet on the subject (see link below). If you use a tax accountant to prepare your taxes, make sure they are aware of the special nature of writing and arts sector income.
Further reading
- Everything You Never Wanted to Know About Taxes (2019) by Joel Fishbane, part of TWUC’s Writers' How-to series of professional development guides (free to TWUC members)
- Canada Revenue Agency’s Income Tax Folio S4-F14-C1, Artists and Writers, which clarifies arts grant income
Stronger Together
TWUC’s advocacy is most effective as the collective voice of Canada’s professional authors. We are stronger together. If you are not already a member of TWUC and are working as a writer, consider joining the Union. If you wish to support TWUC’s advocacy outside of membership, consider donating to the Union.
TWUC’s advocacy is most effective as the collective voice of Canada’s professional authors. We are stronger together. If you are not already a member of TWUC and are working as a writer, consider joining the Union. If you wish to support TWUC’s advocacy outside of membership, consider donating to the Union.
