Review Changes Before Finalizing T Slips

While the March 2nd 2015 deadline for filing T4 slips is still some time away, CRA released publication RC4120-Employers’ Guide – Filing the T4 Slip and Summary on November 21, 2014. 

There are several new areas to note:

Emergency Services Volunteers:  Government bodies or public authorities who have hired emergency volunteers (firefighters, ambulance technicians or search and rescue volunteers) are required to report that these individual taxpayers qualify as volunteers by entering the lessor of $1,000 and their remuneration for volunteer emergency services in box 87 of the T4 slip.  Box 87, unlike most information on the T4 slip, is not included in box 14 - Employment Income.  The allowance is tax exemptand therefore is omitted from Box 14. This acts as a “trigger” for the tax preparer to apply one of two options if to the advantage of the taxpayer.  It may be better to add the exempt income allowance to earned income and elect to choose the 15% non-refundable Search and Rescue Volunteers' Amount to offset the income.

Self-Employed “Employees”:  Taxpayers within certain occupations, such as taxi drivers and hair dressers can be self-employed persons but still receive a T4 slip and be required to pay EI premiums.

Hair dressers for example may lease or rent a chair within a hair salon.  The owner of the hair salon is required to track gross earnings (reported in box 82), identify the employment relationship (employment code 13) and withhold and remit EI premiums from the gross receipts.

Maximum CPP/EI Earnings:  Take note that for 2014, the maximum CPP and EI premiums are as follows:

Electronic Filing:  As Canada Revenue Agency moves closer to full electronic compliance requirements a number of changes regarding the actual filing of T slips for the 2014 tax year are in affect.  Electronic filing of information slips is now restricted to two methods.

• Internet File Transfer (XML) – This is the method used by all electronic filing software and third party suppliers.
• CRA Web Forms – This method allows the employer to create and file T slips directly with CRA using the Web Forms portal available through the CRA website.  The Web Forms portal will allow filing of up to 100 T4 slips.

Note that only employers filing less than 51 T4 slips are eligible to paper-file for 2014.

Effective January 2015 CRA will no longer accept T slip filings by way of DVD, CD, USB keys or Diskettes.