Retiring Allowance (Severance pay) should NOT be included in Box 14 (Employment Income) on the T4.
Currently in AccPac Retiring Allowance (Severance pay) is included in Box 14 (Employment Income), when it should only be reported in Code 66, 67, 68 or 69.
This is something that needs to be fixed before the end of 2011, as we have paid a Retiring Allowance (Severance pay) to one of our employees and the amount is showing up in Box 14 (Employment Income) and it shouldn't be. It is correctly showing up in Code 67.
As per the Canada Revenue Agency Employers' Guide Filing the T4 Slip and Summary, http://www.cra-arc.gc.ca/E/pub/tg/rc4120/rc4120-10e.pdf, page 14:
Code 66 – Eligible retiring allowances
Enter the amount of retiring allowances (also called
severance pay) that was paid in the year and is eligible for
transfer to an RPP or RRSP, even if not transferred. Do not
include this amount in box 14. For more information on
retiring allowances, see page 23.
Code 67 – Non-eligible retiring allowances
Enter the amount of retiring allowances (also called
severance pay) not eligible for transfer to an RPP or RRSP.
Do not include this amount in box 14. For more information
on retiring allowances, see page 23.
Code 68 – Status Indian (exempt income) – Eligible
retiring allowances
Enter the amount of retiring allowances (also called
severance pay) that was paid to a Status Indian in the year
and is eligible for transfer to an RPP or RRSP, even if not
transferred. Do not include this amount in box 14. For more
information on retiring allowances, see page 23.
Code 69 – Status Indian (exempt income) – Non-eligible
retiring allowances
Enter the amount of retiring allowances (also called
severance pay) that was paid to a Status Indian in the year
and is not eligible for transfer to an RPP or RRSP. Do not
include this amount in box 14. For more information on
retiring allowances, see page 23.
When can this fix be completed. I'd much rather have the AccPac system update correctly with the amount not showing up in Employment Income, Box 14, than have to issue an amended T4 that will have to be completed by hand manually after our T4s are submitted electronically to the Canada Revenue Agency.
by: Trevor S. | over a year ago | Payroll
Comments
This can be done by setting up the earning code to NOT be subject to INCTAX. Let's face it -- you have to enter tax manually anyway (if any is taken).