Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Can the employment income received as executrix in 2012 be split for tax purposes to reflect the fact that work was performed commencing in 2011?
Position: No.
Reasons: The ITA is clear that employment income is brought into income in the year of receipt.
XXXXXXXXXX 2013-047534
Phillip Kohnen, CMA
(613) 946-4189
January 21, 2013
Dear XXXXXXXXXX:
Re: Reporting of Executrix Fee on T4
This is in reply to your letter of January 8, 2013 in which you requested a technical interpretation with respect to whether your fee as executrix of an estate received XXXXXXXXXX, 2012 and reported on a 2012 T4 Statement of Remuneration Paid, could be divided for tax purposes. It is noted in your submission that your work as executrix commenced in XXXXXXXXXX 2011, and that you performed significant work in the 2011 calendar year.
Under the Income Tax Act (the "Act") fees earned by a taxpayer for acting in the capacity of an executrix that are not earned in the course of carrying on a business are considered to be income from an office or employment pursuant to paragraph 6(1)(c). Accordingly, such fees are reported on a T4 Statement of Remuneration Paid and are included in the recipient's income in the year of receipt, pursuant to subsection 5(1) of the Act.
As is noted on page 8 of the 2012 Employers' Guide Filing the T4 Slip and Summary, "You have to report income on a T4 slip for the year during which it was paid, regardless of when the services are performed or rendered."
To summarize, the Act does not provide any discretion to divide the amount reported on your 2012 T4 in respect of the executrix fees received in 2012, regardless of the fact that your work commenced in the 2011 calendar year.
Please find enclosed the Proof of Death Certificate which was submitted with your letter.
Yours truly,
Phillip Kohnen
For Director
Financial Industries and Trusts Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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