2009 T-4 Income Tax and CPP Remittance
In the course of preparing the 2009 financial statements for your business, you will recall that it was necessary to declare management salaries in addition to any salaries or wages you may have paid to arm's-length employees. All remuneration drawn from your business that is considered salary or wages is subject to withholdings of tax, CPP (unless you are already receiving CPP benefits), and EI (for arm's length employees). This remuneration must be reported on a T-4 information slip, and submitted to the Canada Revenue Agency (CRA) on time.
The filing deadline for 2009 T-4s is Monday, March 1, 2010, and there can be significant penalties for late filing.
For those clients with fiscal periods that end in the latter portion of the year, it is possible that your 2009 financial statements are not yet completed. Regardless, you likely will have had payroll activity in the past, and will have made at least some payments into an "RP" remittance account at CRA for 2009.
You will likely have received advice from us concerning the recommended minimum remittance of tax that should have gone into that 'RP' account, monthly, for yourself and family members.
The accumulating deposit in the 'RP' account will have been confirmed with you regularly on "PD7(A)" forms, mailed to you by CRA.
We are asking you to send us, or otherwise confirm, the balance showing on the final PD7(A) form for calendar 2009. This form will, in most cases, be mailed to you some time after January 15, 2010. That is because the final remittance deadline for payrolls paid in the month of December, 2009 is January 15, 2010 (or January 10th, if your organization has been classified as an "accelerated remitter").
The amount showing on that final PD7(A) will be incorporated into the 2009 T-4 slips for the entire business, and will include arm's-length employees.
If you have remitted only a nominal amount into the 'RP' account for your personal taxes, we trust you will have paid tax instalments in another way (usually, by instalments to your personal social insurance number account). Please be aware that the CRA will assess interest on the difference between the amount that they expected to receive as minimum instalments (relating to the prior years' personal declared income), and what was actually paid. If you are concerned about possible exposure to interest charges, please contact us.
Please also note that, unless indications are to the contrary, we will assume that you are liable for Canada Pension Plan contributions. Persons who are drawing CPP, however, do not have to pay into the plan. CPP can be drawn as early as the month following the month in which you turn 60, or can be deferred until age 70. We may not be aware that you have started your CPP pension, so please notify us, if applicable.
For Lohn Caulder LLP to prepare your 2009 T-4s, we will require your information by no later than the end of January, 2010.
New this year, we expect that the majority of T4s will be submitted electronically to the CRA - which is a faster, easier, and more efficient way of submitting your data. Also - e-filing may perhaps be the only way we can meet the deadline, what with anticipated courier delays caused by Olympic Games traffic tie-ups (anticipated to be particularly acute around our office building).
Mr. Alan Tam of our office is in charge of T4s - please contact him if you have any questions. Alan's email is atam@lohncaulder.com, and his direct dial telephone is 604-408-3099.
Thanks in advance for your assistance and co-operation.
Lohn Caulder LLP
3rd Floor - 1500 West Georgia St.
Vancouver BC V6G 2Z6
Telephone: (604) 687-5444
Fax: (604) 688-7228
Email: info@lohncaulder.com
Web: www.lohncaulder.com
The information in this newsletter is intended to be for general information only, and is not intended for use or reliance by anyone with respect to any specific transaction or situation.