T-Slip Preparers Face Big Penalties for Failure to File Online

It’s time to get those T4s and T5s out and here’s another reason from CRA to go paperless: Those who issue more than 50 T-slips for a calendar year on paper instead of by Internet file transfer or Web Forms, will be subject to huge penalties this year. All T-slips must be filed with the CRA by February 29, with the exception of T3 slips and T5013s, which are filed by March 31.

The CRA just released the T4015 T5 Guide – Return of Investment Income on January 22, 2016, and reinforced in that document the details on the penalties for T-slip filers.  For the purposes of the penalty, each information slip is considered to be a “return,” and the penalties are steep if you exceed the 50-return threshold in paper filings, as itemized below: 

Penalties For Failure to Transmit T5 Slips over the Internet: $250 for 51 to 250 slips; $500 for 251 to 500; $1500 for 501 to 2500; and $2500 if you issue 2501 or more slips on paper.

According to CRA, the penalty is calculated according to the type of information return. For example, if you file 51 T5 slips and 51 T4 slips on paper, they will assess two penalties of $250, one for each type of information return. Further, you’ll face a $100 penalty for each failure to comply with the information required on the forms. This includes any missing identification numbers from individuals, corporations or partnerships. People who don’t have identification numbers have 15 days from the date of an information request to get one and then 15 days more to provide it to the person who is preparing the slips.

As of January 2016, you can also file returns using the Internet file transfer application from CRA: T2000 - Calculation of Tax on Agreements to Acquire Shares (Section 207.1(5) of the Income Tax Act).

• T1061 - Canadian Amateur Athletic Trust Group Information Return
• T3ATH-IND - Amateur Athlete Trust Income Tax Return
• T3D - Income Tax Return for Deferred Profit Sharing Plan (DPSP) or Revoked DPSP
• T3GR - Group Income Tax and Information Return for RRSP, RRIF, RESP, or RDSP Trusts
• T3M - Environmental Trust Income Tax Return
• T3P - Employees’ Pension Plan Income Tax Return
• T3PRP - T3 Pooled Registered Pension Plan Tax Return
• T3RI - Registered Investment Income Tax Return
• T3S - Supplementary Unemployment Benefit Plan Income Tax Return

Additional Educational Resources: DAW Knowledge Desk Journal, DAV, T1 Professional Tax Preparation - Basic course and Advanced Payroll course. 
 

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