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Non-profit tax return

There is a local manufacturing company that is unionized. The union president has reached out and asked me some questions. He took $20,000 of the union dues money and invested it in a GIC with a 12 month term. He did this last year. The union was just issued a T5 slip by the bank for the interest. He is under the impression that they do not file tax returns as the company pays the employees involved with union business as if they had worked their normal shifts then the union reimburses the company that money. So the union no longer issues T4’s to the union executive. Should the union be filing tax returns each year? Or is that something the International union would take care of on their behalf?

Thank you for your help.

What organization is the “union president” president of? If it is a Registered Non Profit there should be tax returns filed. Is it a non-registered part of the international union?

He is President of the union executive within the factory. I don’t know for sure if they are registered or non-registered. I have asked him to reach out to the International union to ask these questions as well. I am waiting to hear back from him.

Sincerely,

Sandra Tone

DFA – Bookkeeping Services Specialist

Simple Operating Solutions

54 Second Ave

Cambridge, ON
N1S 2C3

T: 519-624-8375

F:519-624-3186

E: Sandra.tone@simpleoperatingsolutions.com

www.simpleoperatingoslutions.com

Typically a union “local” is just a part of the national organization. The local itself doesn’t do any reporting, other than to its parent organization. The national union consolidates all the locals’ financial info for tax (or non-profit) reporting. But, that doesn’t stop a local from setting up a corporation, or applying for a RP number, etc. Every corporation has to file return of some kind - either a T2, or a T1044, or a T3010…
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Trade unions don’t usually have to pay GST or income tax on investment income, so the T5 from the bank is just informational (similar to T5s issued to corporations) as long as the investment income is recorded in the books.

Thank you for your help Nezzer. I will pass along the information.