Taxation Year-End Filing for Businesses


Taxation year-end filing for business

January 27, 2021

Slide 1 (Year End Filing – Executive Summary)

Hello, and welcome to Taxation Year End Filing for Businesses.

I'm Maurice, your host.

Slide 2 (Introduction – Year-End)

For today, please use the question box to post any questions related to year-end filing. We'll answer as many as we can throughout the webinar. For any other tax related questions, call the business enquiries line.

Let's get started.

Slide 3 (Introduction – Year End Filing)

Today, we'll talk about:

Slide 4 (What is the taxation year-end)

For businesses, there are two type of year ends

For payroll, the year end is December 31.

For corporate tax, the year end is the end of the fiscal period for the business. That could be the calendar year or any other period.

Slide 5 (Employers due dates for filing)

The due date for filing information summaries and slips is the last day of February that follows the calendar year in question.

However, T5018 summaries and slips are due six months after the end of the reporting period chosen.

Slide 6 (Purpose of the year-end)

The year end is a time to do three things:

Slide 7 (Remitting and year ends)

While remittances are made throughout the year, the final remittance must be made by its due date.

Slide 8 (Remitting and year ends (Con't)

For some businesses, there is an option for businesses to make a reconciliation payment by the last day of February without penalty or interest on three conditions:

Slide 9 (Who is subject to year-end filing)

Employers or corporations who must file include:

As well, all resident corporations, including non-profit organizations, tax-exempt or inactive corporations, save for Crown corporations, Hutterite colonies and registered charities, have to file a T2 return, even if there is no tax payable.

A non-resident corporation must file if:

Slide 10 (Employers are required to submit information returns)

These are some of the forms and slips required to be submitted at year end.

Most forms and slips have repeating but crucial boxes, such as:

Others mostly share the same box number, such as total remuneration paid, but not always, so it is important to read closely.

We will look at many of the forms and slips, specific boxes and some Covid-19 related boxes a little later.

Slide 11 (Employer responsibilities for payroll)

In aid of year-end filing, employers with payrolls must:

Slide 12 (Keeping records for year end)

The contents of your records depend on several factors including:

Slide 13 (Keeping records - responsibilities)

According to the law, you are responsible for:

Slide 14 (Keeping proper records)

Your records must:

For electronic records, also make sure:

Slide 15 (Ensuring proper year-end filing)

To prepare for year-end filing, as well as referring to your records, you should:

Slide 16 (Review and reconcile payroll deductions)

There are three actions to take for review and reconciliation of payroll deductions:

Slide 17 (T4 and T4A reporting)

To help with T4 and related reporting, there are guides:

For help with filling in boxes on a T4, use guide RC4120. Taxable benefits help is in guide T4130.

Other guides include:

Slide 18 (Implications from Covid-19 Measures)

Covid-19 measures put in place in 2020 have implications for year end reporting.

These include:

Slide 19 (Implications from Covid-19 Measures – T4)

Eligibility criteria for the Canada Emergency Response Benefit, the Canada Emergency Wage Subsidy or CEWS and the Canada Emergency Student Benefit

are based on employment income for a defined period.

The new requirement put in place in 2020 means employers should report income

and any retroactive payments made during these periods.

Slide 20 (Implications from Covid-19 Measures – CEWS)

CEWS is claimable on an accrual basis or on a cash basis when calculating revenue changes when applying for CEWS.

Regardless of which method is used for calculating changes in revenue, the requirements for T4 reporting are the same.

New to the T4, put in place in 2020 are four other information codes, numbers 57 to 60, that reflect the four reporting periods for CEWS, from March 15 through to September 26, and include:

Slide 21 (Implications from Covid-19 Measures - TWS)

There are four essential elements to report if you have taken advantage of the 10% Temporary Wage Subsidy:

Slide 22 (Working from home – the home workspace -T2200/T2200S)

As announced in December 2020, employees who worked from home more than 50% of the time over a period of a least four consecutive weeks in 2020 due to COVID-19 are eligible to claim the home office expenses deduction for 2020.

The use of a shorter qualifying period ensures that more employees can claim the deduction than would otherwise have been possible under longstanding practice.

The temporary flat rate method allows eligible employees to claim a deduction of

$2 for each day they worked at home in that period, plus any other days they worked from home in 2020 due to COVID-19 up to a maximum of $400, where certain conditions are met.

Under this method, employees do not have to get Form T2200 or Form T2200S,

completed and signed by their employer.

To simplify the process for employees choosing the detailed method, the CRA launched, in December 2020, simplified forms, Form T2200S and Form T777S,

and a calculator designed specifically to assist with the calculation of eligible home office expenses.

Slide 23 (Filing procedures)

To file information returns with the CRA, one must submit on or before the last day of February, save for T5018s, by electronic means, especially if you have over 50 slips, or on paper, through the mail or a CRA office mailbox.

Slide 24 (Forms and slips)

We'll take a look now at the T4 family of slips as well as a few others.

Slide 25 (Forms and slips – T4)

On the T4 slip, note box 54 (Employer's account number), box 12 (social insurance number of the employee).

Then, at the bottom, there are six other information boxes, where you can find the new codes 57-60.

Slide 26 (Forms and slips – T4A)

For the T4A, note that the Payer's program account number is box 61, and the recipient's program account number is box 13.

Some of the payments made that fall under T4A reporting include:

You must fill out the T4A if payments exceeded $500 to a recipient, and/or you deducted income taxes from any payment.

Send a copy of each T4A slip along with the completed T4A summary to the CRA at the end of each calendar year, and send a completed income tax return to the CRA based on your chosen fiscal period.

Slide 27 (Forms and slips – T4RSP)

You must file a T4RSP using Canadian dollars as currency and ensure the following is reported:

The amounts entered in boxes 16 to 24 are gross amounts before tax deducted.

Note Box 30 for income tax deducted.

Slide 28 (Forms and slips – T4RIF)

Similar to the T4RSP, for the T4RIF. Note:

Slide 29 (Forms and slips - T4RIF (con't)

The amounts here from box 16 to 24 are gross amounts, before any tax deducted.

In box 28, note income tax deducted.

Slide 30 (Forms and slips - T4-NR)

In the T4-NR, a non resident corporation that had a taxable capital gain or disposed of taxable Canadian property does not have to file a return if the disposition meets all the following criteria:

Slide 31 (Forms and slips – T5018)

If your income mainly comes from construction and you've paid subcontractors, you must fill out T5018.

You may file on December 31 or at the end of your fiscal year end.

Note the recipient's program account number and social insurance number is box 24.

The payer's program account number has no box number.

Slide 32 (Forms and slips – T2200/T2200S)

For the T2200 or T2200S, note that the employer must complete and sign this declaration of conditions of employment form, which should be kept by the employee as a record.

This form provides the basis for expense claims that may be made by the employee.

Slide 33 (Forms and slips - PD27)

For the PD27, the amounts to be claimed on other accounts, noted by the multiple payroll check box in part C, and the amount claimed on the account being reported in this form will add up to the total amount of all accounts.

A separate PD27 must be filled out for each payroll account.

Slide 34 (Forms and slips - PD27 (con't)

In Part D, report up to 12 pay periods.

Slide 35 (Forms and slips - PD27 (con't)

Use the additional comments box to note:

Slide 36 (TD1)

Regarding TD1 forms, employers should note of employee TD1s, including accurate:

Slide 37 (Forms – TD1)

Remember that the TD1 is filled out by the employee and sent to the employer, who uses it as a record to determine deductions.

This form becomes part of your records.

Slide 38 (Employers and GST/HST)

A few notes regarding GST/HST year ends.

Those charging and/or collecting GST/HST must file year end information, even if they have no business transactions or tax to remit for the filing period.

For corporate tax and GST/HST, the year end is the end of the fiscal period for the business. That could be the calendar year or any other period.

Slide 39 (Business and GST/HST)

For year-end GST/HST filing, businesses with GST/HST accounts, who file annually, have two options:

If the year end is December 31, then they must file by April 30 of the following year.

If the year end is different, then they must file within three months after the fiscal year end.

Slide 40 (GST/HST - Year end elections)

There are two elections for the GST/HST year end:

Slide 41 (Recap of pertinent information)

Today, we covered these issues relating to year ends:

We defined year end and noted filing dates and the reason for year ends.

We saw who had to file year end information.

We discussed remitting and year end requirements, as well as responsibilities for filing.

We looked at keeping records and preparing for year end filing.

We had a look at some of the most used forms and slips.

Lastly, we noted some GST/HST.

Slide 42 (Thank You!)

Tax administration is as complex as life itself. If the content today doesn't quite

fit your situation, please:

We've come to the end of our webinar.

Thanks for joining me today. I hope it's been helpful. Stay tuned for more webinars

in the coming months!

Good bye.

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