February 25, 2005
TO: Compensation Managers
Injury on Duty Leave Amendment of T4 and Relevé 1
The purpose of this bulletin is to advise departments of the process to
obtain an amended T4 or Relevé 1 for employees on leave with pay
for injury in the workplace. This process does not apply to employees who
receive benefits directly from provincial Workers' Compensation Board(s) (WCB)
while on leave without pay for injury in the workplace.
Since January 2003, departmental Corporate Compensation Managers are
responsible for authorizing Public Works and Government Services Canada (PWGSC)
to produce an employee's amended T4 and Relevé 1 as a result of leave with
pay for injury in the workplace.
The following information will assist Corporate Compensation Managers in
dealing with the provincial WCB and PWGSC.
Background
Under some provincial WCB legislation, an employee on leave with pay,
as a result of an injury on duty, is entitled to receive a tax credit equal to
the amount the employee would have received had the provincial WCB paid the
claimant directly.
Each provincial WCB is responsible for the issuance of a T5007 or a Relevé 5
(from the "Commission de la santé et sécurité au travail" (CSST)) to the
employee for income tax purposes. The provincial WCB and the CSST also provide
to the employer the value of the benefit (deemed value of lost wages) paid
during the year for reporting purposes on the employee's T4 and Relevé 1.
PWGSC will report the amount in box 77 of the T4. For the Relevé 1, PWGSC
will deduct the amount from box A, for the year in which the benefits are
applicable. PWGSC will also print the following note in the centre of the
Relevé 1 "Indemnity reimbursed by the CSST, not included in box A" followed
by the amount reimbursed.
Federal tax regulations require the employer to report income in the year it
was paid. In the case of an employee on leave with pay because of an
injury on duty, the award (deemed value of lost wages) is to be treated for
income tax purposes as if the payment was made in the year approved by the
provincial WCB.
In the case of the CSST awards (deemed value of lost wages), the Revenue
Québec regulation requires the employer to report the amount of the award as if
the payment was made in the year in which the benefits are applicable,
regardless of when the CSST decision is rendered.
Each year the employer receives provincial WCB data files. These files
contain information on:
- Employees on leave with pay
who received benefits (deemed value of lost wages) during the previous
calendar year, and
- Employees whose claims were filed
in a previous year and decisions were only rendered by WCB in the current
tax-filing year.
The amount reported for the latter case will include the deemed value of lost
wages up to the date of the decision in the current tax-filing year and any
other amount paid during the current tax-filing year. For example, the
provincial WCB may render a decision in 2002 on a claim for an accident that
occurred sometime prior to 2002. The value of the award covering the total
period of absence will be reported on the 2002 T4.
The data file for employees covered by the CSST contains information on
employees on leave with pay who received benefits (deemed value of lost
wages) during the previous calendar years and reflects the calendar year in
which the benefits are applicable.
Initial Process
The provinces listed below allow for the crediting of the amount (deemed
value of lost wages) received for injury on duty. At the beginning of each
calendar year, TBS obtains data files for the following provincial WCB: Nova
Scotia, Québec, Ontario, Manitoba, Saskatchewan, Alberta, British Colombia
On receipt of the data files, the Pay Administration Section in TBS reviews
the formatting and forwards the data files to PWGSC for processing. The records
on the data file are matched with the PWGSC pay master file to identify in which
pay office and pay list the employee belongs.
When the process is completed, a report is produced for all the matched
records and contains the employee's Personal Record Identifier, Pay Office,
Paylist and the amount to be reported in box 77 of the T4 and where applicable,
the amount to be deducted from box A of the Relevé 1 for each year the benefits
are applicable. These reports are then sent to the appropriate pay offices for
input prior to the production of the T4 and Relevé 1. If PWGSC receives the
data files after the annual production of the T4 and Relevé 1, the same process
described above takes place except that PWGSC pay offices are instructed to
produce amended T4's and Relevé 1's.
Requesting Amended T4 and Relevé 1
There are two situations where a department will have to investigate and take
action. The first situation is where the amount of the provincial WCB benefits
reported on the original or amended T4 and Relevé 1 is different from the
amount of benefits the employee claims should have been reported. The second
situation is where no amount was submitted to PWGSC for processing. For both
situations, the Corporate Compensation Manager should contact the appropriate
provincial WCB to obtain the correct amount to report on the T4 and Relevé 1.
Attached you will find a list of provincial WCB contacts who should be able
to answer your enquiries.
It is preferable to forward your enquiries through e-mail. The phone numbers
of the provincial WCB / CSST contacts are provided so that you can follow-up on
your enquiries.
Because of privacy concerns, you should not include the Social Insurance
Number in your e-mail request. You should always use the provincial WCB / CSST
claim number. This number appears on the T5007 or Relevé 5 issued by the
provincial WCB / CSST. If you do not have a copy of the employee's T5007 or
Relevé 5, you should obtain one from the employee. You should not use the
amount reported on the employee's T5007 or Relevé 5 because it may be
different from the amount reported by the provincial WCB / CSST as lost wages
while on leave with pay. The amount reported on the T5007 or Relevé 5
may include benefits paid directly from the provincial WCB or CSST to the
employee.
The basic information in your e-mail should contain the name of the employee,
the claim number, the year of the claim and the amount, if available. You should
also provide your phone number in case the provincial WCB / CSST requires
additional information. The provincial WCB / CSST will provide you with the
amount of the deemed value of lost wages while on leave with pay and the
calendar year in which the amount was approved (deemed to have been paid).
As previously stated, the CSST will provide you with the amount(s) and
calendar year(s) the benefits apply to and the calendar year(s) the benefits
were deemed to have been paid.
Once you have obtained the confirmation in writing from the provincial WCB or
CSST, you should prepare a letter authorizing the pay office to amend the T4
and/or Relevé 1. In order to assist you, you will find attached sample letters
that cover situations where the full amount was credited in the calendar year
and situations where the amount or partial amount was credited in the following
calendar year.
Departmental compensation and staff relations managers should direct any
questions that they may have to their appropriate corporate officials who, if
need be, can contact the Pay Administration Section.
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