Frequently ask question: reimbursement for tax advice
Employees who had pay issues related to the Phoenix pay system and who required assistance from an accountant or another qualified tax professional (such as a firm or individual who is in the normal business of providing income tax advisory services or tax preparation services) may seek up to $200 (taxes included) in reimbursement for tax advice for each of their 2016, 2017, 2018, or 2019 income taxes.
1. What Phoenix pay issues are eligible for reimbursement of tax advice?
You may be eligible for reimbursement if:
- you were overpaid in the 2016, 2017, 2018, 2019 calendar years
- you were underpaid in the 2016, 2017, 2018, 2019 calendar years
- you received incorrect tax slips for 2016, 2017, 2018, 2019 taxation years
2. What types of services are considered as "tax advice"?
For the purposes of submitting a claim, the following are considered tax advice:
- tax advice provided by a qualified professional to help an individual understand the impact of overpayments or underpayments as they relate to their 2016, 2017, 2018, or 2019 income taxes
- preparation of an individual's 2016, 2017, 2018, or 2019 income tax returns in cases where the individual's income tax situation has been affected by pay issues related to the Phoenix pay system
- comparison of an individual's 2016, 2017, 2018, or 2019 tax slips against income amounts actually received by the individual
3. What types of services are excluded from claims for reimbursement of tax advice?
Costs for tax advice related to an employee's small business activities or investment activities are not eligible for reimbursement.
Pay reconciliation (verifying salary owed vs. actually received) services are not eligible for reimbursement. An external consultant does not have access to detailed pay records, the pay system and in-depth knowledge of collective agreements and human resource directives. An external consultant is also unable to make any actual changes to the employee's pay record and/or to effect any other pay adjustments.
In the event that an invoice for tax advice includes services rendered for an employee and their spouse (who is not a public servant who has been affected by Phoenix), the reimbursable amount will be half of the invoice total unless a detailed breakdown of the work performed for each individual is provided (for a maximum of $200 taxes included). In the event that the employee and their spouse are both public servants who have been affected by Phoenix, please refer to this question.
4. How do I make a claim for reimbursement of tax advice?
We have a specific form for claims for reimbursement of tax advice.
To make a claim now:
- Download and complete the claim form for reimbursement of tax advice
- Submit your claim form, along with supporting documentation, to your Departmental Claim Officer
5. Is supporting documentation required to submit a claim?
Claim forms must be accompanied by a receipt from an accredited professional accountant or from a firm or individual who is in the normal business of providing income tax advisory services or tax preparation services.
6. I had Phoenix pay issues and required the services of a qualified tax professional, but the expense for these services exceeds $200. Can I be reimbursed for a higher amount?
Claims that exceed $200 (including taxes) will be referred to the TBS Claims Office and considered on a case-by-case basis. You may be asked to provide additional information to substantiate a claim that exceeds $200.
7. Is the reimbursement of tax advice a taxable benefit?
No. The Canada Revenue Agency has confirmed that reimbursements made because of the employer's error are not considered as a taxable benefit or as income. You will not receive a tax slip for amounts reimbursed for tax advice, and you do not need to report the amount of reimbursement in your income tax return.
8. I used a tax software program or an online tax filing service instead of consulting a qualified tax professional. Can I be reimbursed for the cost of this tax software or online tax service?
No. The intent of this process is that employees who are uncertain about the impacts of Phoenix pay issues have the opportunity to seek professional advice regarding their income tax situation. Tax software and online services are unable to provide this advice, so the cost of such software or online services is not eligible for reimbursement.
9. My spouse and I file our income taxes jointly. Can I submit a claim for tax advisory services for my spouse's income taxes as well?
This claims process is limited to reimbursing employees of the Government of Canada. Spouses of employees are not eligible for the reimbursement of tax advisory services unless they are also a federal government employee that had Phoenix pay issues.
Where a spouse is also a federal government employee who has also had a pay issue with the Phoenix pay system, he or she should submit a claim separately for a proportional share of the tax advisory services provided.
10. I have already filed my income taxes, but I am uncertain about the potential current and future income tax impacts of the pay issues I had with the Phoenix pay system. Can I still seek advice from an accountant or a qualified tax professional?
Yes. Provided that you meet the eligibility criteria, you can submit a claim even after you submitted your income tax return.
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