ARCHIVED CD 2004-003

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February 18, 2004

SUBJECT: Issuance of an Amended T4 or of a Relevé 1 Relating to a Workers'Compensation Board or the "Commission de la santé et de la sécurité du travail du Québec" Award Where the Amount of the Award is Disputed by the Employee

1. PURPOSE

1.1 The purpose of this directive is to advise Treasury Board departments and separate employers (Crown corporations and agencies) paid through the Regional Pay System (RPS) of the procedure to follow when there is a dispute concerning the amounts reported on an employee's Statement of Remuneration Paid (T4) or "Revenu d'emploi et revenus divers" (Relevé 1) for Workers'Compensation Board (WCB) or the "Commission de la santé et de la sécurité du travail du Québec" (CSST) awards.

1.2 In this text, use of the masculine is generic and applies to both men and women.

2. CANCELLATION

2.1 This directive supersedes Compensation Directive 2001-012 dated May 24, 2001.

3. BACKGROUND

3.1 Treasury Board published an information notice entitled "Injury on Duty Leave Amendment of T-4 and Relevé-1" dated February 18, 2011, which detailed the process to follow to obtain an amended T4 or Relevé 1. The notice is available on-line at the following Web site address:

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

4. POLICY

4.1 Effective January 2003, departmental corporate compensation managers became responsible to contact the WCB and the CSST to clarify any situations as described in Section 5.1 herein. Compensation managers are also responsible to provide authorization to Public Works and Government Services Canada (PWGSC) to produce the employee's amended T4 and/or Relevé 1 because of incorrect WCB or CSST amounts having been reported or not reported at all.

4.2 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 was made in the year approved by the WCB .

As an example, on November 1, 2002, an employee starts an injury on duty leave. His claim was approved on March 15, 2003, and he returned to duty on April 8, 2003. The money you continued to pay him while on injury on duty leave is reported on the T4 as employment income in the year he received the money. That is to say, all income (includes regular salary and injury on duty payments) paid to the employee in the year 2002 will be reflected as employment income on the employee's 2002 T4 up to and including the month of December 2002. Similarly, all income (includes regular salary and injury on duty payments) received by the employee in 2003 commencing January 1, 2003, will also be reflected as employment income on the employee's 2003 T4. The WCB award for the period of November 1, 2002, to April 7, 2003, will be reflected on the employee's 2003 T4 only in accordance with the Federal tax reporting requirements relative to the date the WCB claim was approved.

The amount of the reward will be reported in Box 77 on the employee's T4.

4.3 In the case of the Commission de la santé et sécurité au travail (CSST) awards (deemed value of lost wages), the " ministère du Revenu du Québec " regulation requires the employer to report the amount of the award as if the payment was made in the year in which the benefits are applicable, regardless of when the CSST decision is rendered.

Using the same scenario in Section 4.2 above, the employment income is reported in the year received; however the total employment income is reduced by the amount of the CSST benefit for the particular taxation year regardless of what date the CSST claim was approved. That is to say, the employee's 2002 Relevé 1 will reflect the income (includes regular salary and injury on duty payments) that was paid to him from January 1, 2002, up to and including the month of December 2002, less the CSST benefit relative to the period of November 1, 2002, to December 31, 2002. For the year 2003, the employee's Relevé 1 will reflect the income (regular salary and injury on duty payments) that was paid to him from January 1, 2003, up to and including the month of December 2003, less the CSST benefit relative to the period of January 1, 2003, to April 7, 2003, inclusive. This manner of reporting is in accordance with the " ministère du Revenu du Québec " that is relative to the date the CSST benefits were paid.

As stated above, the employee's total employment income, Box A on the Relevé 1, will be reduced by the amount of the CSST award. In addition, the Relevé 1 will reflect a footnote reporting the amount of the CSST award.

5. PROCEDURES/INSTRUCTIONS

Client Responsibilities:

5.1 As per Treasury Board (TB)'s information notice mentioned in Section 3.1 herein, compensation managers should contact the appropriate provincial WCB or the CSST (by e-mail or by letter) to obtain the correct amount to report on the T4 and the Relevé 1 for the following situations:

1. when the amount of the WCB or of the CSST benefits reported on the original or amended T4 and Relevé 1 is different from the amount of benefits the employee claims should have been reported; and
2. when no amount was submitted to PWGSC for processing.

5.2 Once the confirmation in writing is obtained from the WCB or the CSST, compensation managers should send a letter to the pay office authorizing the pay office to amend the T4 and/or the Relevé 1. This letter should include the employee's name, department, paylist, Personal Record Identifier (PRI), the amounts to be reported and the applicable taxation year to which the amounts relate.

For WCB claims, the client will be required to provide the award amount as described in Section 4.2.

For CSST claims, the client will be required to provide the award amounts as described in both sections 4.2 and 4.3 herein for each employee. This means the client must provide the total amount of the award as described in Section 4.2 for the production of the T4 and the breakdown of the award by taxation year as described in Section 4.3 for the production of the Relevé 1.

Pay Office Responsibilities:

5.3 Upon receipt of the client's written confirmation of the WCB or CSST awards, the pay office will update Field 747 (Workers'Compensation Gross Pay). This update will automatically issue a system generated amended T4 and Relevé 1.

5.4 Until such time as the RPS is programmed to correctly report the CSST award (where the approved award spans over multiple taxation years) on the Relevé 1, the system will issue a Relevé 1 that will be incorrect.

5.5 For purposes of issuing the amended Relevé 1, pay offices will be required to manually prepare an amended Relevé 1 for each applicable taxation year. This is accomplished by performing the following calculation using the Master Employee Record fields of the taxation year involved:

1. 1. Determine the total employment income by adding the amounts in Fields 700 (Year To Date (YTD) Gross Pay), 718 (Additional Taxable Benefits), 736 (Housing Benefit), 751 (Quebec Health Taxable Benefits), 752 (Quebec Public Service Management Insurance Plan (PSMIP) Taxable Benefit) and subtracting Fields 753 (Quebec PSMIP Life Taxable Benefit) and 744 (Indian Status Income Quebec);
2. 2. Subtract the amount of the deemed CSST award for the particular taxation year provided by the client;
3. 3. Report the remainder in Box A of the Relevé 1.

In addition, the pay office must reflect the following footnote followed by the amount of the CSST award:

WCB/CSST $_________

6. INQUIRIES

6.1 Any inquiries on the information contained in this document should be addressed to your PWGSC Compensation Services Office.

Original Signed by
R. Jolicoeur

R. Jolicoeur
Director General
Compensation Sector
Accounting, Banking and Compensation

Référence(s) : CJA3490-1