MPTF gigs are considered to be an Artist Project Grant. As such, MPTF grants should be included in your Income Tax Return but not your HST return.
The first thing to remember is that Income Tax and HST are two separate things. A grant is subject to income tax, but not to HST. So when calculating your income for the $30,000 HST threshold, or when completing an HST return, you don’t count grants as part of the relevant income. But when calculating your income for income tax purposes, you do.
The HST is a ‘goods and services’ tax. A grant is not considered a payment for goods or services because the payer (the MPTF) receives neither from you. Since the performance is free and open to all members of the public, no one is actually “paying” you to perform. Yes, you do a performance, but the work doesn’t then belong to the grantor (that’s why they call it a grant, not a sale).
Meaning that even though the MPTF fund gave you money (which is taxable under the income tax system, and shows up on your PERSONAL tax return), they haven’t made a purchase from you, so it doesn’t count under the HST system and doesn’t show up on your HST return.
An artist fee is different. There, the payer is paying you to receive a service. They are the beneficiaries of your services or the recipient of the work. In that case they HAVE made a purchase from you, and that counts toward the $30,000 HST threshold and would show up on both your personal tax return, and your HST return. This obviously does NOT apply to MPTF grants.
Have any additional questions? Ask your tax advisor.
NOTE:
– MPTF applications must be filled out online at least 30 days before a gig. The application form is at https://www.HamiltonMusicians.org.
– All band members must be members in good standing of the AFM, preferably the Hamilton Musicians’ Guild.
– A maximum of 6 band members is allowed for any one gig.
– You are responsible for reporting your own income and HST return. We do not issue T4’s, T4A’s, or any report to the government on your behalf.
– Once the gig is completed, payment is typically made to the band leader within 30 days, for distribution to band members.