6 July 2017 Ministerial Correspondence 2017-0698801M4 - Phoenix - Extending T1 filing deadline

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: Whether T1 filing deadline should be extended for employees impacted by Phoenix pay system errors?

Position: No. CRA has other measures to assist affected employees.

Reasons: see response

July 6, 2017

XXXXXXXXXX

Dear XXXXXXXXXX:

Thank you for your correspondence about the income tax concerns of your constituents affected by Phoenix pay system errors. I also received a copy of the correspondence you sent on the same matter to the Right Honourable Justin Trudeau, Prime Minister of Canada. I appreciate your understanding regarding the delay of this response.

I understand the concern of Government of Canada employees about how errors in the Phoenix pay system may affect their 2016 income tax and benefit return. Officials of the Canada Revenue Agency (CRA) tell me that Ms. Nerill Thomas-Wilkinson, an income tax rulings manager in the Legislative Policy and Regulatory Affairs Branch, spoke with XXXXXXXXXX of your constituency office on April 21, 2017. They discussed what the CRA has done to help affected employees understand how Phoenix payroll system errors may impact their income taxes.

The CRA has worked with other government departments to prepare frequently asked questions to explain the tax implications of Phoenix pay system errors and to prepare a decision tree to help affected employees file their 2016 return. This information is available at canada.ca/taxes-phoenix. The CRA has also established a dedicated telephone helpline at 1-888-556-5083 to help affected employees with their income tax questions.

All taxpayers, including those affected by Phoenix pay system errors, were encouraged to file their 2016 return by May 1, 2017, using their most recent T4 slip, to help avoid potential penalties or interruptions to the payment of applicable benefits and credits, such as the Canada child benefit.

Filing a return also allows the CRA to expedite reassessment when it receives the amended T4 slip from the employer. Once the CRA reassesses the return, it will recalculate the refund or taxes owing and any government benefits and credits. If the recalculated benefits are higher than what an employee had been receiving, the difference will be automatically paid to the employee.

The CRA recognizes that some employees may owe taxes on filing because of Phoenix pay system errors, such as overpayments for which they have not received an amended T4 slip. While these employees are waiting for their employer to issue amended T4 slips with their correct 2016 earnings, they can call the CRA’s debt management centre at 1-888-863-8657 to discuss any taxes owing.

I understand employers are working diligently to correct and issue amended T4 slips. Employees who need corrections to their T4 slip or who have questions are encouraged to call the Public Services and Procurement Canada call centre at 1-855-686-4729 if they are or were being paid by a department served by the Public Service Pay Centre in Miramichi. If the employee’s department is not served by the Public Service Pay Centre, they should contact their compensation advisor.

Employees can also submit a claim for reimbursement for out-of-pocket expenses they paid as a direct result of Phoenix pay system errors that caused incomplete or inaccurate pay. Information about the Phoenix claims process is available at canada.ca/en/treasury-board-secretariat/services/pay/submit-claim-pocket-expenses-phoenix.html.

Thank you for writing. I trust my comments will help you respond to your constituents.

Sincerely,

The Honourable Diane Lebouthillier

Nerill Thomas-Wilkinson
905-721-5187
2017-069880