The Canada Revenue Agency (CRA) has recently announced additional reporting requirements for employers for fiscal year 2020 related to COVID-19 relief measures. Please review the following information carefully as there may be important action for you to be taken.
PD27 – 10% Canada Temporary Wage Subsidy Self-Identification Form for Employers
Employers that qualified for the 10% Temporary Wage Subsidy (TWS) will be required to file a new form PD27 – 10% Temporary Wage Subsidy Self-Identification Form for Employers to report and disclose the wages paid and the details on the employee and employer deductions for the eligible period, being between March 18 and June 19, 2020. A web version of the form is also available to be filed online for employers registered for CRA’s My Business Account.
The TWS did not require employers to make a request to receive the subsidy. Instead, employers simply reduced the required employee income tax withholdings on their periodic deductions at source remittances by the amount of the subsidy calculated. This form will help CRA reconcile the subsidy that will be credited to the employers when assessing the T4/T4Summaries for 2020. It is recommended that all employers file the form as soon as possible to ensure there are no delays in processing T4 summary’s due by February 28, 2021.
Employers using a payroll service provider should confirm with their contact at their service provider if they will be filing the PD27 form on the employer’s behalf. Note that some payroll providers have already confirmed that they will not be filing this form for you.
Additional T4 Reporting Requirements for 2020
In an effort to assist the CRA in validating employment income payments that may be relevant to the various COVID-19 subsidies (Canada Emergency Response Benefit, Canada Emergency Student Benefit or Canada Emergency Wage Subsidy (CEWS)), the following additional information codes will be required to be reported on this year’s T4s issued by employers.
- Code 57: Employment income paid – March 15 to May 9
- Code 58: Employment income paid – May 10 to July 4
- Code 59: Employment income paid – July 5 to August 29
- Code 60: Employment income paid – August 30 to September 26
The total employment income should still be reported under box 14 or Code 71.
All employers required to file T4 forms will be required to report the additional information on their employees’ 2020 T4s regardless of whether or not CEWS claims were made or if any of their employees suffered from a work disruption.
Our Tax Team can help you measure the impact of these changes on your business. Do not hesitate to contact us for any questions.