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1
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PURPOSE
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1.1
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The purpose of this directive is to advise departments of new reporting
requirements for income earned by a Status Indian employee working on a reserve
in Québec.
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2
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CANCELLATION
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2.1
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This directive supersedes and cancels Services Pay Directive 1989-132 (43)
dated October 13, 1989, entitled "Indians Working on a Reserve -
Québec".
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3
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BACKGROUND
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3.1
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The ministère du Revenu du Québec has announced that the
reporting requirement for Status Indian income earned on a Québec
reserve has changed with the 1996 taxation year.
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3.2
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Income earned by a Status Indian employee while working on a reserve in
Québec, although it remains tax-exempt, should now be reported on the
Relevé 1.
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4
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POLICY
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4.1
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Effective with the 1996 taxation year, the ministère du Revenu du
Québec requires that tax-exempt income earned by a Status Indian
employee while working on a reserve in Québec be reported on the
Relevé 1 in a new box R, "Tax-Exempt Income Paid to an
Indian".
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This tax-exempt income is still not to be included in box A "Employment
Income" on the Relevé 1.
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5
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PROCEDURES/INSTRUCTIONS
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5.1
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The Regional Pay System has been modified to automatically report, in Box R of
the Relevé 1, the income earned by a Status Indian employee where the
employee's entire earnings for the taxation year were earned while
working on a reserve in Québec.
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5.2
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Where, during the same taxation year, the employee's income as a Status Indian
was not earned exclusively while working on a reserve in Québec,
the Regional Pay System will not automatically report an amount in box R
of the Relevé 1.
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In this situation, departments will be required to report to the pay office,
the amount of income earned by the Status Indian employee while working on a
reserve in Québec.
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Please note that earned income includes taxable benefit amounts but excludes
amounts awarded by the Workman's Compensation Board (WCB) for any period
considered as working on the reserve in Québec. Departments will be
required to contact the Commission de la santé et de la
sécurité au travail (CSST) in order to obtain the amount awarded
for the period while working on a reserve in Québec.
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5.3
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Element 744 of the Master Employee Record will be renamed as "Indian
Income Working on a Reserve in Québec". This element will be used
to report the income earned while working on a reserve in Québec for
those Status Indian employees who did not work exclusively on a
Québec reserve during the year.
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5.4
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The pay office, upon written notification from the department, will process a
PAC 30 to credit element 744 by the amount reported.
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Please note that element 744 will not be available until January 1997.
Therefore, when updating the 1996 element, the pay office should update the
previous year element MP 744. The availability of element 744 will be confirmed
by Program Release (RLS).
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6
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INQUIRIES
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6.1
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Any request for information regarding the foregoing should be addressed to your
PWGSC Compensation Services Office.
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P. Charko
Director General
Compensation Sector
Government Operational Service
[Print Version]