Due to the Covid-19 pandemic, employment income reporting on 2020 T4 slips will be a bit different in 2020. To validate Covid-19 benefits claimed by taxpayers, the Canada Revenue Agency (CRA) is turning to employers for help.
When to File 2020 T4 Slips
As a reminder, the T4 slip must be completed if you withheld payroll deductions such as Canada Pension Plan, Employment Insurance, Provincial Parental Insurance Plan, or income tax from an employee’s pay. Any employee paid more than $500 during the year will also require a T4 slip.
Employment income is reported during the year it was paid, not when it was accrued. For example, if your payroll cut off is December 26, 2020, but the pay cheque is dated January 4, 2021, this income will be reported on a 2021 T4 slip, not the 2020 T4 slip.
New Information Codes
For the 2020 T4s, in addition to the employment income reported in Box 14, you are required to report the following codes:
- 57: Employment Income March 15 to May 9
- 58: Employment Income May 10 to July 4
- 59: Employment Income July 5 to August 29
- 60: Employment Income August 30 to September 26
These codes are to be used in addition to Box 14 (Employment Income) and Code 71 (Indian Exempt Income Employment), not instead of Box 14 and Code 71. Total employment income is still to be reported in Box 14.
The additional step is reporting employment income paid during the benefit periods relating to the Covid-19 pandemic. These amounts are to reflect when the employment income was paid, not when it was accrued.
For example, if your employee worked from April 26 – May 9, 2020 but their pay cheque was dated May 11, you would use Code 58 for this amount. If the employee did not earn wages during any of the above periods, it’s not necessary to record zero for each code. Doing so may make things more clear to the CRA. There is no reason you can’t include the zeroes.
The deadline to file your 2020 T4 slips with the CRA is March 1, 2021. Late filing penalties are administered by the CRA if your T4 slips are not filed by the deadline. Penalties vary based on the number of employees and the number of days you are late filing.