CRA indicates that constructive receipt does not accelerate T4 reporting obligations

A retired employee, who had a right to receive a bonus payment (a restricted share unit) in 2017 and in 2018, died in 2017 which, under the terms of the plan, resulted in all entitlements becoming payable immediately. However, the employer did not make the payment to the deceased’s estate until 2018, when it became aware of the death. CRA stated:

The T4 prepared by the employer would reflect the year of payment, which in your example occurred in 2018 and the amounts received by the estate should be reported on the final return of the deceased in 2017, the year of death.

You might wonder why there was constructive receipt in 2017 under s. 5(1) but not constructive payment in 2017 under Reg. 200. CRA did not comment on this but presumably had in mind source deductions under Reg. 102, which generally are made only on (actual) payments.

Neal Armstrong. Summaries of 26 June 2018 External T.I. 2018-0746971E5 under Reg. 200(1) and s. 5(1).