Subject: Change in the manner in which members of the Canadian Air Traffic Control Association (CATCA) and the International Brotherhood of Electrical Workers (IBEW) bargaining agents will receive union dues information for income tax purposes
Date: December 5, 2014
1.1. The purpose of this compensation directive (CD) is to inform clients about the reporting of the union dues for members of CATCA and IBEW on the statements of remuneration effective January 2015.
2.1. CATCA and IBEW are the only two bargaining agents (BAs) still issuing a receipt for income tax purposes to their members for the union dues deducted on their pay in each calendar year.
2.2. CATCA and IBEW will issue, to their members, the last receipt for union dues deducted in the 2014 calendar year.
2.3. For all union dues deducted in 2015 and later, Public Works and Government Services Canada (PWGSC) will report the amount of union dues on the employee’s statements of remuneration. This will be reflected in the Union Dues Box 44 of the T4 and, when applicable, in Box F of the Relevé 1.
3.1. The Income Tax Act allows for union dues paid by an employee to a BA to be deducted in computing the employee’s taxable income as long as the employee has not been reimbursed or is not entitled to be reimbursed.
3.2. These union dues are either reported on a receipt issued by the BA or in the designated box of the statements of remuneration (T4 and Relevé 1).
4. Procedures and Instructions
4.1. Starting on January 1, 2015, the regional pay system (RPS) will update the Master Employee Record (MER) 717 for the transactions done with the existing union dues codes for members of CATCA and IBEW. When there is a value in MER 717, it is used by the RPS to record the union dues information on the employee’s statements of remuneration.
4.2. There is no change in procedures for compensation advisors who will continue to use the following codes:
- Deduction code 643 for current union dues
- Deduction code 5A5 for union dues arrears
- Deduction code 637 for current union dues
- Deduction code 946 for union dues arrears
4.3. As explained in CD 2012-006, when an employee becomes subject to a collective agreement and the union dues are not processed within the required time frame, or an insufficient amount was deducted, the compensation advisor is responsible to ensure that the difference in union dues is paid to the BA within 30 days of discovering that union dues are owed.
4.3.1. Recovery of union dues paid by the department on behalf of the member of CATCA or IBEW used to be done using the deduction code 540 (Debt to the Crown). This process was in place because these BAs were issuing receipts to their members to report the amount on their income tax returns and therefore, PWGSC could not use a code that automatically updated the union dues box on the statements of remuneration.
4.3.2. As of January 1, 2015, compensation advisors will recover the amount paid by the department to the BA on the employee’s behalf with the deduction code 5F3 "REC-Dues Remitted". The deduction taken with this code is credited back to the department and automatically updates the MER 717 to be reflected on the statements of remuneration.
4.3.3. The CD 2012-006 will be modified so that compensation advisors follow the same procedure with the deduction code 5F3 for the employees represented by CATCA and IBEW.
Refund of union dues with code 643 or 637 that are processed in the RPS as of January 1, 2015 must be done using effective dates in the current year. The true effective dates of the refund must be entered in the Free Form Text (FFT) field 72.
5. Personnel-Pay Input Manual (PPIM)
5.1. The PPIM will be updated to include the information contained in this directive.
6.1. Any inquiries on the information contained in this directive should be addressed to your Public Works and Government Services Canada (PWGSC) Compensation Services Office.
Information Notice to Employees
Change in the manner in which members of the Canadian Air Traffic Control Association (CATCA) and the International Brotherhood of Electrical Workers (IBEW) bargaining agents will receive union dues information for income tax purposes
The union dues deducted on your pay and sent to your bargaining agent every year are deductible for income tax purposes.
Currently, CATCA and IBEW provide their members with a receipt every year showing the total amount of the union dues deducted during the year. At the beginning of 2015, you will receive from your bargaining agent, your receipt for the union dues deducted in 2014.
Starting in 2015, Public Works and Government Services, who is the payroll administrator, will report the amount of union dues deducted directly on your statements of remuneration. The amount will be recorded in Box 44 of your T4 and in Box F of your Relevé 1, when applicable.
Accordingly in 2016, your statements of remuneration for the earnings of 2015 will be the first to include your union dues information. Your bargaining agent will at that time no longer provide you with a receipt for this purpose.
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