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1 |
PURPOSE |
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1.1 |
The purpose of this directive is
to advise Treasury Board departments and separate employers (Crown corporations
and agencies) paid through the Regional Pay System (RPS) of the procedure
to follow when there is a dispute concerning the amounts reported on an
employee's Statement of Remuneration Paid (T4) or "Revenu d'emploi et revenus
divers" (Relevé 1) for Workers' Compensation Board (WCB) or the "Commission
de la santé et de la sécurité du travail du Québec" (CSST)
awards. |
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1.2 |
In this text, use
of the masculine is generic and applies to both men and women.
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2 |
CANCELLATION |
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2.1 |
This directive supersedes Compensation
Directive 2001-012 dated May 24, 2001.
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3 |
BACKGROUND |
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3.1 |
Treasury Board published an information
notice entitled "Injury on Duty Leave Amendment of T-4 and Relevé-1" dated
March 26, 2003, which detailed the process to follow to obtain an amended
T4 or Relevé 1. The notice is available on-line at the following
Web site address: |
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http://publiservice.tbs-sct.gc.ca/hr-rh/cpa-rap/info_notice-avis_info/inidl-avcat_e.asp
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4 |
POLICY |
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4.1 |
Effective January 2003, departmental
corporate compensation managers became responsible to contact the WCB and
the CSST to clarify any situations as described in Section 5.1 herein.
Compensation managers are also responsible to provide authorization to
Public Works and Government Services Canada (PWGSC) to produce the employee's
amended T4 and/or Relevé 1 because of incorrect WCB or CSST amounts
having been reported or not reported at all. |
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4.2 |
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 WCB. |
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As an example, on November 1, 2002,
an employee starts an injury on duty leave. His claim was approved on March
15, 2003, and he returned to duty on April 8, 2003. The money you continued
to pay him while on injury on duty leave is reported on the T4 as employment
income in the year he received the money. That is to say, all income (includes
regular salary and injury on duty payments) paid to the employee in the
year 2002 will be reflected as employment income on the employee's 2002
T4 up to and including the month of December 2002. Similarly, all income
(includes regular salary and injury on duty payments) received by the employee
in 2003 commencing January 1, 2003, will also be reflected as employment
income on the employee's 2003 T4. The WCB award for the period of November
1, 2002, to April 7, 2003, will be reflected on the employee's 2003 T4
only in accordance with the Federal tax reporting requirements relative
to the date the WCB claim was approved. |
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The amount of the reward will be
reported in Box 77 on the employee's T4. |
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4.3 |
In the case of the Commission de
la santé et sécurité au travail (CSST) awards (deemed
value of lost wages), the "ministère du Revenu du 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. |
Using the same scenario in Section
4.2 above, the employment income is reported in the year received; however
the total employment income is reduced by the amount of the CSST benefit
for the particular taxation year regardless of what date the CSST claim
was approved. That is to say, the employee's 2002 Relevé 1 will
reflect the income (includes regular salary and injury on duty payments)
that was paid to him from January 1, 2002, up to and including the month
of December 2002, less the CSST benefit relative to the period of
November 1, 2002, to December 31, 2002. For the year 2003, the employee's
Relevé 1 will reflect the income (regular salary and injury on duty
payments) that was paid to him from January 1, 2003, up to and including
the month of December 2003, less the CSST benefit relative to the
period of January 1, 2003, to April 7, 2003, inclusive. This manner of
reporting is in accordance with the "ministère du Revenu du Québec" that
is relative to the date the CSST benefits were paid. |
As stated above, the employee's
total employment income, Box A on the Relevé 1, will be reduced
by the amount of the CSST award. In addition, the Relevé 1 will
reflect a footnote reporting the amount of the CSST award.
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5 |
PROCEDURES/INSTRUCTIONS |
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Client Responsibilities: |
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5.1 |
As per TB's information notice
mentioned in Section 3.1 herein, compensation managers should contact the
appropriate provincial WCB or the CSST (by e-mail or by letter) to obtain
the correct amount to report on the T4 and the Relevé 1 for the
following situations: |
(1) when the amount of the WCB
or of the CSST 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; and |
(2) when no amount was submitted
to PWGSC for processing. |
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5.2 |
Once the confirmation in writing
is obtained from the WCB or the CSST, compensation managers should send
a letter to the pay office authorizing the pay office to amend the T4 and/or
the Relevé 1. This letter should include the employee's name, department,
paylist, Personal Record Identifier (PRI), the amounts to be reported and
the applicable taxation year to which the amounts relate. |
For WCB claims, the client
will be required to provide the award amount as described in Section 4.2. |
For CSST claims, the client
will be required to provide the award amounts as described in both sections
4.2 and 4.3 herein for each employee. This means the client must provide
the total amount of the award as described in Section 4.2 for the production
of the T4 and the breakdown of the award by taxation year as described
in Section 4.3 for the production of the Relevé 1. |
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Pay Office Responsibilities: |
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5.3 |
Upon receipt of the client's written
confirmation of the WCB or CSST awards, the pay office will update Field
747 (Workers' Compensation Gross Pay). This update will automatically issue
a system generated amended T4 and Relevé 1. |
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5.4 |
Until such time as the RPS is programmed
to correctly report the CSST award (where the approved award spans over
multiple taxation years) on the Relevé 1, the system will issue
a Relevé 1 that will be incorrect. |
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5.5 |
For purposes of issuing the amended
Relevé 1, pay offices will be required to manually prepare an amended
Relevé 1 for each applicable taxation year. This is accomplished
by performing the following calculation using the Master Employee Record
fields of the taxation year involved: |
1. Determine
the total employment income by adding the amounts in Fields 700
(YTD Gross Pay), 718 (Additional Taxable Benefits), 736 (Housing Benefit),
751 (Quebec Health Taxable Benefits), 752 (Quebec PSMIP Taxable Benefit)
and subtracting Fields 753 (Quebec PSMIP Life Taxable Benefit) and
744 (Indian Status Income Quebec); |
2. Subtract the amount of
the deemed CSST award for the particular taxation year provided by the
client; |
3. Report the
remainder in Box A of the Relevé 1. |
In addition, the pay office must
reflect the following footnote followed by the amount of the CSST award: |
WCB/CSST $_________
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6 |
INQUIRIES |
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6.1 |
Any inquiries on
the information contained in this document should be addressed to your
PWGSC Compensation Services Office. |