New T4 2020 reporting requirements

Effective for the 2020 T4 reporting of employee income, the Canada Revenue Agency (CRA) now requires additional reporting that applies to all employers, regardless of whether a business has applied for any of the COVID-19 related federal government relief/recovery programs. This will assist the CRA in validating payments received by employers and their employees under the Canada Emergency Wage Subsidy (CEWS), the Canada Emergency Response Benefit (CERB) and the Canada Emergency Student Benefit (CESB).

New T4 information codes

In addition to reporting the gross employment income paid to an employee on Box 14 or code 71¹ of the T4, the CRA has introduced four new T4 codes to report gross employment income and retroactive payments:

• Code 57: Employment income – March 15 to May 9
• Code 58: Employment income – May 10 to July 4
• Code 59: Employment income – July 5 to August 29
• Code 60: Employment income – August 30 to September 26

Each code above represents a time period for which the employee was paid employment income. The date the employment income is paid determines which code to use. For example, if the employee worked from April 25 to May 8, 2020 and was paid on May 14, the amount paid would be included for Code 58, covering the period of May 10 to July 4.

Other potential reporting requirements

As a result of the 10% Temporary Wage Subsidy (TWS), employers may need to also complete Form PD27, 10% Temporary Wage Subsidy Self-Identification Form for Employers. The CRA will use this form to reconcile the amount of payroll remittances during the relevant pay periods that fall within the TWS periods (March 18 to June 19, 2020) to the payroll remittance amounts reported on the T4 summary. Employers who are eligible for the TWS are required to complete and submit form PD27 if:

• You already reduced your remittances,
• You intend to reduce your remittances, or
• You claimed CEWS and, as a result, need to confirm the amount of the TWS you are electing to claim (even if you claimed zero TWS)

It is important to complete the required Form PD27 prior to submitting the T4 summary, so the CRA will have the proper information.