New T4/T4A Reporting Requirements for Canadian Employers - Canada Dental Benefit
For employers in Canada, the 2023 tax year introduces new requirements for T4 and T4A reporting that directly impact the Canadian Dental Care Plan.
These changes, effective immediately, are designed to enhance transparency and confirm employees' eligibility for dental coverage. The goal of the Canada Dental Benefit is to offer financial assistance for the dental care of children. This benefit applies to families with children under the age of 12 and an annual household income below $90,000.
To qualify, parents must confirm that their children did not have access to a private dental plan. Children covered by private insurance plans, such as employee benefits, do not qualify for the Canada Dental Benefit.
To manage this new program effectively, the Canada Revenue Agency (CRA) will ask employers for information about the dental coverage they offer to their employees. This reporting process started in the 2023 calendar year.
What implications does this have for your business?
Employers are now tasked with reporting additional information on T4 and T4A slips related to dental benefits. Specifically, new boxes have been added to these slips to capture details about employer-offered and payer-offered dental benefits.
T4 Reporting
One crucial aspect of the update requires employers to report whether an employee or any of their family members were eligible for dental coverage on December 31st of the taxation year to which the information return pertains. It's important to note that employers filing T4 slips for the calendar year 2023 before January 1st, 2024, are exempt from filing amended slips to include the updated information.
T4A Reporting
T4A slips are used to show additional income sources, like earnings from being self-employed, pensions, or annuities. If you issue T4A slips, and you have put an amount in Box 16 (which is for pension or superannuation payments), you also have to fill out the new Box 15. This tells whether the person getting the money or their family had access to dental services plans or coverage.
Failing to provide this information may lead to financial penalties, as the CRA has the authority to reject any T4 or T4A slip filed without this essential data. If you're unsure about any of this, you should get in touch with whoever handles your payroll. They can help with any questions or concerns you might have regarding these new reporting rules.
For further assistance and guidance, employers can also reach out to the CRA's Business Enquiries line at 1-800-959-5525.
Embracing change is essential for running a successful business. Ensure your business stays compliant and well-prepared for success. If you need help navigating these changes, consider reaching out to a knowledgeable accountant.