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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues: Year of reporting retroactive wage settlement under an arbitration award
Position: Year of receipt
Reasons: Section 5 requires that all wages and salary be reported in year of receipt
XXXXXXXXXX 2003-001823
June 10, 2003
Dear XXXXXXXXXX:
Re: Technical Interpretation Request: Arbitration award
This is in reply to your letter of May 8, 2003 regarding the above-noted subject.
Under the terms of an arbitration award, your company was required to reimburse an employee for wages earned in the year 2001. The award was paid to the employee in 2003.
You asked whether it was necessary to adjust the employee's 2001 T4 or include the payment in the employee's 2003 T4.
Under section 5 of the Income Tax Act, all salary, wages and other remuneration received by an employee in the year are subject to income tax (and the employer must make the necessary payroll withholdings). Since the amount was paid to the employee in 2003, T4 reporting by the employer will be for 2003 and no retroactive adjustment to the 2001 T4 is necessary.
Yours truly,
John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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