COVID-19 Update - PD27 and T4 Requirements - Action Required
NOVEMBER 20, 2020
As a consequence of the various COVID-19 response programs that have been implemented by the Government of Canada and the trend towards having more employees work from home the Canada Revenue Agency (CRA) has implemented new and additional reporting requirements for 2020.
These requirements are mandatory for all organizations that incur payroll costs, and we strongly encourage you to bookmark this post as a reference - some of these requirements are time sensitive.
If you were eligible to take advantage of the Temporary Wage Subsidy (TWS) you will be required to fill out Form PD27, 10% Temporary Wage Subsidy Self-Identification Form for Employers regardless of whether you claimed the TWS. This form will be used by the CRA to reconcile the TWS on your payroll accounts. Also note if you have multiple payroll accounts you will need to file separate PD27 forms for each payroll account (RP) accounts.
Eligible employers do not need to wait until T4 returns are filed to file Form PD27. It is encouraged to file the form as soon as possible in order to avoid a discrepancy notice from CRA at the end of the year.
This form can be submitted online, by mail or by fax.
On this form, the following information needs to be included for each pay period:
- The number of eligible employees employed from March 18 to June 19, 2020
- Gross payroll
- Income tax deducted
- CPP and EI deductions
- Total wage subsidy claimed – in both dollars and as a percentage of gross payroll
The form also allows for employers who have not yet claimed the TWS through payroll deductions to receive the subsidy through this form.
TWS Reported as Taxable Income:
- If an eligible employer used the TWS, the amount of the subsidy is taxable in the same year the remittances were reduced
If you are eligible for both TWS and CEWS:
- If the employer fails to submit the PD27, they will be considered to have taken advantage of the full 10% TWS claim. This could result in reduced or recovered CEWS claims.
CRA has provided examples for specific scenarios that may pertain to your current situation. See the following link for more guidance and those examples:
If you have questions about the PD27 form or would like Fort Group’s assistance with completing it, please contact us.
Updated T4 Requirements
For the 2020 tax year, the CRA has introduced new reporting requirements for T4 slips. The additional requirements include new codes when reporting employment income and retroactive payments in addition to the amounts included in Box 14. The new codes are as follows:
Box 57: Employment income – March 15 to May 9
Box 58: Employment income – May 10 to July 4
Box 59: Employment income – July 5 to August 29
Box 60: Employment income – August 30 to September 26
These additional reporting requirements apply to all employers, regardless of participation in the number of government subsidies available.
If Fort Group normally prepares your T4 slips please ensure you provide us with the necessary information to complete this additional reporting when providing your normal T4 information.
If Fort Group does not normally prepare your T4 slips please contact us if you require assistance while preparing your 2020 T4 slips.
Documents to provide employees who worked from home due to COVID-19
There will be a form that must be issued to employees who worked from due to COVID-19, prepared by the employer. We are currently waiting for CRA to provide clear guidance on what the exact requirements will be, and we will update you when we know more.
Please contact our office if you have any questions regarding these new forms and requirements.
Take good care.