ARCHIVED Services Pay Directive: 1992-086 (39)
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December 3, 1992
SUBJECT : Tuition Fees/Books - Membership Fees/Seminars -Mortgage - Interest Differential
1.1 The purpose of this directive is to provide information concerning the payment and reporting requirements of Tuition Fees/Books and Membership Fees/Seminars.
1.2 This directive also provides information relative to entitlement code 241 "Mortgage - Interest Differential" which is no longer a taxable payment.
2.1 This supersedes and cancels Services Pay Directive 1992-080 (35) dated November 19, 1992 entitled "Tuition Fees/Book - Membership Fees/Seminars".
3.1 Federal departments are requesting most payments through the Regional Pay System, however a number of entitlements paid to employees are still requested through the accounts payable system.
3.2 Two new entitlement codes have been established to reduce the issuance of separate remuneration from both systems for Income Tax purposes and to deduct the necessary statutory deductions when paying taxable payments.
3.3 A policy change with regards to the taxability of the Mortgage - Interest Differential payment requires manual intervention from Departments and the Paying Office.
4.1 Payments of Tuition Fees/Books and Membership Fees/Seminars are considered taxable when the Department pays these fees on behalf of an employee, or reimburses an employee in whole or in part for these fees that the employee has paid. The amount paid is income to the employee for the year in which the Department made the payment. These types of taxable payments should be requested through the Regional Pay System.
4.2 Payments are considered non-taxable when the course for which the fees are paid is undertaken on the Department's initiative and for the employer's benefit. Those types of non-taxable payments should still be requested through the Accounts Payable System.
4.3 Effective January 1st 1992, the payment of Mortgage - Interest Differential (241) is no longer a taxable benefit. As such, this payment must be requested through the accounts payable system.
5.1 Entitlement codes for taxable Tuition Fees and Books (239), and, taxable Membership Fees and Seminars (240) have been established for use by departments.
Entitlements (codes 239 and 240) are subject to Income Tax, Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) and Unemployment Insurance deductions.
Payments of these funds should be requested as a lump sum with a rate base "0". All payments requested through the Regional Pay System will automatically be included in the appropriate boxes, on the individual's T4.
5.2 Please note that non-taxable payments of Tuition Fees/Books and Membership Fees/Seminars, as noted in 4.2, will continue to be requested and paid through the Accounts Payable System.
5.3 For the 1992 Taxation year only, departments are requested to send a letter to their paying office, indicating the employee's name and the respective amounts that were paid in 1992 through the Regional Pay system under Mortgage - Interest Differential (code 241).
The paying office will then reduce the applicable amounts that were paid under code 241 from element 700 "Gross Pay & Allowances", element 706 or 707 "CPP or QPP Earnings", element 714 "UI Rebatable", element 724 "UI Earnings" and element 731 Mortgage - Interest Differential prior to the issuance of 1992 T4s.
Refunds of income tax, Canada or Quebec Pension Plan contributions and unemployment insurance premiums will not be made by Supply and Services Canada (SSC) paying offices. Revenue Canada - Taxation will issue the applicable refund when the employee files his/her year-end income tax return.
Effective November 11, 1992, departments will no longer be able to utilize code 241 "Mortgage - Interest Differential" within the Regional Pay System.
6.1 Any queries on the foregoing may be directed by telephone to Diane Perrier at 819-956-2058 or Jan Walker at 819-956-2063 of the Compensation Advisory Group.
Original Signed by
Government Operational Service
Reference: CJA 9006-24-7
- Date modified: