T4 season is in full swing and that means some long days (and nights) for bookkeepers and accountants. If you’re scrambling to get everything done by the deadline, we’ve put together some helpful last-minute tips for filing T4s to get you to the finish line.
What is a T4?
Let’s start with the basics. The T4 tax form, which is also known as the Statement of Remuneration Paid, is a form that employees need to file their taxes. This valuable form reveals how much an employee earned during the year, and how much was withheld and remitted to the Canada Revenue Agency (CRA) on the employee’s behalf.
Generally speaking, most taxable income, benefits, allowances, deductions, and pension plan contributions are included on the T4. For more specific information on the boxes included on the form, you can consult the CRA’s Employers' Guide – Filing the T4 Slip and Summary.
When are T4s due?
T4s must be filed with the CRA no later than February 28 (or February 29 if it's a leap year). However, if you are filing with a payroll platform, the date may be earlier. For example, if you are using Knit, the last day to request Knit to file T4s on your behalf is Monday, Feb 25, 2019.
The failure to distribute T4 slips on time can come with a hefty fine. This fine is based on the number of T4s you file late and can range from a minimum of $100 to a maximum of $7,500.
Tips for Filing T4s:
1) Double-Check Employee Information
Before you even begin to file a T4, double check to make sure that you have correctly entered the employee’s name, address, and Social Insurance Number (SIN). This is important because an incorrect SIN can affect an employee’s Canada Pension Plan or Quebec Pension Plan benefits. If you’re unable to obtain an employee’s SIN, be sure to document that you made a reasonable effort to get it.
2) Follow The CRA Guidelines Carefully
When it comes to T4s, the CRA can be a bit picky. Be sure to follow the CRA’s exact guidelines when filling out your T4 slips, including:
● Report all amounts you paid during the year in dollars and cents (except pension adjustment amounts, which are reported in dollars only).
● Report all amounts in Canadian dollars (even if the employee was paid in a different currency).
● Do not use the dollar sign ($).
● Do not enter hyphens or dashes between numbers.
● Do not show negative dollar amounts on slips.
● If you do not have to enter an amount in a box, simply leave the box blank (do not enter “nil” or N/A).
3) Make Sure Your T4 Summaries Match
The CRA requires you to fill out a separate T4 Summary for each of your payroll program accounts. It is important to make sure that the totals you report on your T4 Summary agree with the totals you report on your T4 slips. Any errors or omissions can lead to unnecessary processing delays.
4) Keep Copies on Hand
The CRA’s Web Form is a free and secure way to file your returns electronically. If you’re filing your return electronically, you do not need to send the CRA a paper copy of the slips or summary, but you should also keep a copy for your own records.
If you are filing on paper, you must keep the information from the T4 slips and the T4 Summary or a copy of these forms for your files.
5) Correct Any Errors
Even when you triple check your T4s, sometimes mistakes slip through the cracks. If you notice that you made an error on a T4 slip, you will have to prepare an amended slip to correct the information—unless the error is just the employee’s address, in which case you do not need to file an amended T4 slip
To amend a T4 slip electronically, only change the incorrect information and retain all of the remaining information that was originally submitted. Use summary report type code “A” and slip report type code “A.” To cancel a slip electronically, do not change any information that was contained on the original slip. Use summary report type code “A” and slip report type code “C.”
If you need to amend or cancel a paper return, clearly identify the slips as amended or cancelled slips by writing “AMENDED” or “CANCELLED” at the top of each slip. Remember, the CRA may contact you about why these amendments or cancellations were made.
While we would never go so far as to call T4 season fun, if you keep these last-minute tips for filing T4s in mind you can certainly make the process a little bit easier. Of course, you can always skip the filing entirely and have Knit do it on your behalf.