Tax deduction, CPP and EI discrepancy notice (PD4R)
Tax deduction, CPP and EI discrepancy notice (PD4R)
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What is a PD4R notice
A PD4R notice is issued to you when there is a difference between the total remittances made in the year and the total of the reported amounts on the T4 type slips, such as the T4 and T4A.
- If you remitted more than the amounts reported on the slips, you will have a credit balance on your payroll account. A credit balance is not automatically transferred to the current year or refunded to you because you may have made an error on the T4 slips that requires amending. You must explain the credit balance by responding to the PD4R notice before the balance can be transferred or refunded.
- If you remitted less than the amounts reported on the slips, you will have a debit balance on your payroll account. A balance due remittance voucher is included with the PD4R notice in this situation.
When is a PD4R issued
Any of the following issues may result in a PD4R being issued:
Remittance errors
Remittance errors can occur when:
- There are missing remittances or extra remittances
- Incorrect amounts are remitted
If you remitted more than the required amount for the year, a refund or a transfer can be requested when responding to the notice. The CRA will review the account to determine if you are entitled to the credit. If you are entitled, the transaction will be shown on your next statement.
If you remitted less than the required amount for the year, you must make a payment as soon as possible. Penalties and interest may apply.
Learn more: How to remit (pay).
Information return errors
Information return errors can occur when:
- There are missing slips or extra slips
- Incorrect amounts are reported
You must correct a discrepancy caused by an information return error by submitting amended slips. You can include the amended slips when responding to the PD4R.
Learn more: Amend, cancel, add, or replace slips and summaries
PD27 – Temporary Wage Subsidy Self-Identification Form For Employers
The following situations may be related to a PD4R notice. However, a discrepancy resulting from a Temporary Wage Subsidy Self-Identification (TWS) claim may not be only limited to these situations:
- You claimed the TWS but never completed Form PD27.
- TWS request ongoing due to missing information on a previously submitted Form PD27.
- Filed Form PD27 has not been processed yet.
- TWS amount claimed is not included on Line 82 of the T4 Summary. As a result, a PD4R notice will be issued. You must reply to the PD4R notice and request that the credit balance be either refunded or transferred to the current year.
Learn more: 10% Temporary Wage Subsidy for Employers.
Responding to a PD4R notice
You must respond to the PD4R notice and provide an explanation, even if a request has been made to correct the discrepancy.
The response can be sent using:
- My Business Account or Represent a Client
- By mail to the address provided on the PD4R
What if you do not respond
If you do not respond to the PD4R notice, the Canada Revenue Agency will issue a notice of assessment (PD7D) when there is a debit balance.
Once a PD7D has been issued, you must follow the instructions on the PD7D.
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