Like clockwork, the calendar year rolls over and every accounting department braces for the surge of year-end and tax time tasks. This year organizations face some added fields which are now required in relation to COVID-19 relief and assistance which need to be reviewed on individuals’ tax slips.
In addition to reporting employment income for your employee(s) in Box 14 (employment income) of their T4 Slip, you will also be required to report their employment income for four specific dated periods using new codes in the "Other Information" area of the T4. This is only for the 2020 tax year.
The codes and dated periods correspond as follows:
- Code 57: Employment income – March 15 to May 9
- Code 58: Employment income – May 10 to July 4
- Code 59: Employment income – July 5 to August 29
- Code 60: Employment income – August 30 to September 26
The employment income reported is based on the pay date that your employee(s) received their income from you.
For example, if you are reporting employment income for the period of June 22 to July 3, and paid it to your employee on a pay date of July 17, you would report it using code 59 (July 5 - August 29).
Having the employment income separated for the specific periods listed will assist the CRA to cross-reference any income your employee(s) may have received through the Canada Emergency Wage Subsidy (CEWS), the Canada Emergency Response Benefit (CERB), and/or the Canada Emergency Student Benefit (CESB) as a means of validating any received relief benefits.
Will my financial software be able to handle the breakdown for me?
In most cases, all financial software should be able to process Canadian T4s or RL1 slips. As long as you are using the most up-to-date tax tables those boxes should be filled with the appropriate income information for each employee.
Helpful Resources and Reference Material for T4s from the CRA:
- New T4 reporting requirements
- Employer's Guide to Payroll Deductions and Remittances
- Employer's Guide to Filing the T4 Slip and Summary
- Breakdown of T4 Boxes and Codes
- How to Amend T4s
- PDF Download of 2020 T4
Disclaimer: This article provides general information and should not be construed as tax advice. Since tax rules may change over time and can vary by location and industry, please consult a PCP/CPA or tax advisor for advice specific to your business.