Upgrade not reporting T4 boxes 57-60 correctly

SUGGESTED

Upgrade to 2021.1.1 still doesn't report boxes 57 to 60 correctly.

Non-cash non-taxable benefits are included (eg. RRSP benefits) and non-cash taxable benefits (eg. premiums for Life Insurance, AD&D, STD & LTD) which are not actually RECEIVED by the employee during the pay period are included in these boxes.  Per CRA's website, these boxes should only include amounts received by the employee during the pay period.

I've been waiting for Sage to call me back since early last week when I started preparing manual T4s - no call received.

I spent 7 hours on hold over two days with CRA to determine these should not be included and it is on CRA's website - why doesn't the update we waited an extra 5 days for calculate the amounts correctly?

  • 0
    SUGGESTED

    Hi @CCW, 

    Thanks for reaching out. I found your account ending 400xxxxx503 and have asked the team to follow up with you. Also ran your questions by one of our Senior Analysts who advised that we'll be creating a KB resources for this.  Box 57 to 60 is based on cheque date only, not pay period.

    Will update you with any news from the team. 

    Warm Regards, 
    Erzsi

  • 0 in reply to Erzsi_I

    Update that KB 109022 with subject "Sage 50 is calculating T4 boxes 57 - 60 based on cheque date rather than pay period" is now available.

  • 0 in reply to Erzsi_I

    This has nothing to do with cheque date or pay period.  The program is adding non-cash benefits to those boxes and it should not be.  Per CRA, boxes 57 to 60 should include remuneration PAID to the employee. Non-cash benefits are not paid to the employee.

  • 0 in reply to CCW

    Thank you for your question.

    Reporting taxable benefits can be complicated in normal circumstances. I think that your question and the answer you received from the CRA was in respect to when taxable benefits should be included in employment income.

    In Sage 50, if the taxable benefit is recorded on a pay cheque, then they are included as part of employment income. The employment income is then reported in the applicable COVID-19 reporting periods.

    The CRA documentation is clear that boxes 57 to 60 are for reporting employment income paid to the employee during the COVID-19 reporting periods.

    Employment income also includes the value of taxable benefits “for each pay period or when the benefit is received or enjoyed”.

    If something is not a taxable benefit, it should not recorded in payroll or reported as employment income on the T4. For some taxable benefits, the employer doesn’t record it in payroll until the taxable benefit is provided. However, the CRA does allow employers to prorate the value of taxable benefits over the pay periods in a month.

    The employer portion of RRSP contributions are considered a taxable benefit that should be reported. (https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits-allowances/financial/registered-retirement-savings-plans-rrsps.html) However, income tax does not have to be deducted on the contributions made to employees’ RRSPs.

    Similarly, employer paid income maintenance and other insurance plans are also taxable benefits that are included in employment income.

    From

    https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/support-employers-cra-covid-19.html#howto

  • 0 in reply to KathleenF

    No, it is obvious that taxable benefits should be included in Box 14 & Box 40 on a T4.

    The subject line clearly indicates that boxes 57-60 are reporting non-cash taxable and non-cash non-taxable benefits (eg: benefits premiums, RRSP employer portion - which the employee does not actually receive during the pay period).  Per CRA - These boxes should only be reporting in-cash taxable benefits (eg: cell allowance, EIPRP rebate - amounts the employee actually receives in cash in the pay period).

  • 0 in reply to CCW

    Hi , thank you for providing some specific details of the benefits in question. Checked in with the team regarding your feedback. They advised that: 

    All of these benefits are taxable benefits which, when recorded in Sage 50, are reported as employment income in Box 14 and thus, in Boxes 57 to 60. Employment income includes both cash and non-cash taxable benefits. (Insurable income for EI purposes generally only includes cash taxable benefits.)

    We are sorry, we could not find any documentation from the CRA that shows that the employment income reported in Boxes 57 to 60 is different from the employment income reported in Box 14. We believe that the CRA rep that you talked to, either mis-understood your question, or gave you the wrong information.  

  • 0 in reply to Erzsi_I

    From CRA at this link: Frequently asked questions: Canada emergency wage subsidy (CEWS) - Canada.ca
    17-02. Are non-taxable employee benefits, such as employer contributions to a registered pension plan or a private health services plan, included in eligible remuneration paid to an eligible employee? New: August 11, 2020

    No. Eligible remuneration of an eligible employee means amounts paid to an employee as salary, wages, and other remuneration for which an eligible employer would generally be required to make payroll deductions to be remitted to the CRA. Non-taxable benefits are not eligible remuneration paid to an eligible employee

  • 0 in reply to CCW

    CCW - I have just checked one set of my T4 forms where there are non-cash benefits and the numbers are correct. The non-cash benefits are considered as income and are taxed so they must be included in Box 14 and subsequently in one of the four new boxes. As for the non-taxable benefits I cannot check as I don't have any with those parameters. I would suggest that they are not showing or there would have been conversation either here or on social media about the problem. My question would be are the benefits set up properly to not be a part of box 14. If they are included in box 14 then they have to also be included in one of the new boxes depending on dates.

  • 0 in reply to CCW
    SUGGESTED

    Thank you for the additional information and the link to the FAQ for CEWS. The answer in the FAQ though is referring to “eligible remuneration” for CEWS. The criteria for “eligible remuneration” excludes a number of non-cash benefits, and, as a result, is different from “employment income”. However, according to the CRA documentation for T4 reporting, employment income is to be reported in Boxes 57 to 60.

  • 0 in reply to KathleenF
    SUGGESTED

    I fully agree with your notes, Kathleen, too many people are taking these boxes to be reporting for other subsidies and they are not related. The amounts here are the total employment income that attracted the statutory deductions for each period. Forget CEWS or TWSE as those are employer subsidies and are not reported on an employee basis.