Injury-on-Duty Leave Amendment of T4 and/or Relevé 1

Background

Under some provincial Workers’ Compensation Boards legislation, an employee on leave with pay, as a result of an injury on duty, is entitled to receive a tax credit equal to the amount the employee would have received had the provincial Workers’ Compensation Board paid the claimant directly.

Each provincial Workers’ Compensation Board is responsible for the issuance of a T5007 or a Relevé 5 (from Québec’s “Commission de la santé et sécurité au travail”) to the employee for income tax purposes. The provincial Workers’ Compensation Boards and the “Commission de la santé et sécurité au travail” also provide to the employer the value of the benefit (deemed value of lost wages) paid during the year for reporting purposes on the employee’s T4 and/or Relevé 1.

Public Works and Government Services Canada will report the amount in box 77 of the T4 slip. As per Revenu Québec guidelines, the benefit amount will reduce the employment income reported in box A of the Relevé 1, but will no longer be reported as a footnote on the Relevé 1.

Federal tax regulations require the employer to report income in the year it was paid. In the case of an employee on leave with pay because of an injury on duty, the award (deemed value of lost wages) is to be treated for income tax purposes as if the payment were made in the year approved by the provincial Workers’ Compensation Board. 

Each year Public Works and Government Services Canada (on behalf of the employer) receives provincial Workers’ Compensation Board data files. These files contain information on:

• Employees on leave with pay who received benefits (deemed value of lost wages) during the previous calendar year, and
• Employees whose claims were filed in a previous year and decisions were only rendered by the Workers’ Compensation Board in the current tax-filing year.

The amount reported for the latter case will include the deemed value of lost wages up to the date of the decision in the current tax­filing year and any other amount paid during the current tax-filing year. For example, the provincial Workers’ Compensation Board may render a decision in 2012 on a claim for an accident that occurred sometime prior to 2012. The value of the award covering the total period of absence will be reported on the 2012 T4.

The data file for employees covered by the “Commission de la santé et sécurité au travail” contains information on employees on leave with pay who received benefits (deemed value of lost wages) during the previous calendar years and reflects the calendar year in which the benefits are applicable. In the case of late decisions (decisions rendered in 2012 for leave that occurred prior to 2012), Revenu Québec requires that we report the benefit amount in box A-3 (Reimbursement of salary) of the Relevé 1 slip and not reduce the employment income reported in box A.

Process

At the beginning of each calendar year, Public Works and Government Services Canada, on behalf of the employer, obtains data files of the deemed value of lost wages received for an injury on duty from the following provincial boards:

Nova Scotia, Québec, Ontario, Manitoba, Saskatchewan, Alberta, and British Colombia.

The records on the data file are matched with the Public Works and Government Services Canada pay master file to identify in which pay office and pay list the employee belongs.

When the process is completed, a report is produced for all the matched records and contains the employee’s Personal Record Identifier, Pay Office, Paylist and the amount to be reported on the tax slips. Starting with the 2012 tax slips, the T4/Relevé 1 will be automatically updated with the amount of the Workers’ Compensation Board/“Commission de la santé et sécurité au travail” benefit and these reports will be sent to the appropriate pay offices for verification and reference. If  Public Works and Government Services Canada receives the data files after the annual production of the original T4/Relevé 1, the same process described above takes place, except that the Workers’ Compensation Board/“Commission de la santé et sécurité au travail” benefit will be reported on an amended T4/Relevé 1.

Requesting Amended T4 and/or Relevé 1

There are two situations where a department will have to investigate and take action. The first situation is where the amount of the provincial Workers’ Compensation Board benefits reported on the original or amended T4 or Relevé 1 is different from the amount of benefits the employee claims should have been reported. The second situation is where no amount was submitted to Public Works and Government Services Canada for processing. For both situations, the Corporate Compensation Manager should contact the appropriate provincial Workers’ Compensation Board to obtain the correct amount to report on the T4 or Relevé 1.

Attached you will find a list of provincial Workers’ Compensation Board contacts who should be able to answer your enquiries.

It is preferable to forward your enquiries through e-mail. The phone numbers of the provincial Workers’ Compensation Board or “Commission de la santé et sécurité au travail” contacts are provided so that you can follow-up on your enquiries.

Because of privacy concerns, you should not include the Social Insurance Number in your e-mail request. You should always use the provincial Workers’ Compensation Board or “Commission de la santé et sécurité au travail” claim number. This number appears on the T5007 or Relevé 5 issued by the provincial Workers’ Compensation Board or “Commission de la santé et sécurité au travail”.

If you do not have a copy of the employee’s T5007 or Relevé 5, you should obtain one from the employee. You should not use the amount reported on the employee’s T5007 or Relevé 5 because it may be different from the amount reported by the provincial Workers’ Compensation Board or “Commission de la santé et sécurité au travail” as lost wages while on leave with pay. The amount reported on the T5007 or Relevé 5 may include benefits paid directly from the provincial Workers’ Compensation Board or “Commission de la santé et sécurité au travail” to the employee.

The basic information in your e-mail should contain the name of the employee, the claim number, the year of the claim and the amount, if available. You should also provide your phone number in case the provincial Workers’ Compensation Board or “Commission de la santé et sécurité au travail” requires additional information. The provincial Workers’ Compensation Board or “Commission de la santé et sécurité au travail” will provide you with the amount of the deemed value of lost wages while on leave with pay and the calendar year in which the amount was approved (deemed to have been paid).

Once you have obtained the confirmation in writing from the provincial Workers’ Compensation Board or “Commission de la santé et sécurité au travail”, you should prepare a letter authorizing the pay office to amend the T4/Relevé 1 accordingly.