Employee paid benefits premium

T1
1

My client pays benefit premiums through their employer plan.

On their T4 nothing entered by their employer in box 85. (read on the CRA site - use of box 85 is optional)

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits-allowances/private-health-services-plan-premiums.html

I entered their premiums in box 85 of the T4 form, however, I see no impact on the client refund.

Can anyone elaborate?

2

Better to enter on the medical sheet and it will only impact if it is more than 3% of their net income on line 236.

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3

Most likely you have not exceed the 3% threshold for medical expenses to be an eligible claim.
Check the Medical sheet.

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Also, you are possibly asking for serious trouble to come pouring down on your head by inventing your own fictitious entries into the T4 screen reporting which do not appear on the Employers actual issued reported T4… :frowning:

If you have some supporting documentation for the amount that the taxpayer paid as premiums to a PHSP, then the medical expense screen in the place to report it. Alternatively, the taxpayer can request the employer to issue and amended T4, if applicable.

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@joe.justjoe1 Thanks

6

Most employers don’t like amending a T4 just to include the medical premiums paid.

I usually ask my clients for the last pay stub for the period ending on December 31st.

If the medical premiums paid is not clearly marked, then I provide them with an email requesting that the employer confirm in writing the employee amounts paid for each of the following:-

  1. supplementary medical insurance premiums paid by employee as a deduction from net pay

  2. dental insurance premiums paid by employee as a deduction from net pay

  3. health spending account premiums paid by employee as a deduction from net pay

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits-allowances/private-health-services-plan-premiums.html

Also we ask the employer to list any taxable benefits included for medical expenses paid as a cash or non-cash payroll item.

https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4130/employers-guide-taxable-benefits-allowances.html#P1334_178946

This folio is currently unavailable while under review.

https://www.canada.ca/en/revenue-agency/services/tax/technical-information/income-tax/income-tax-folios-index/series-2-employers-employees/series-2-employers-employees-folio-3-employment-benefits/income-tax-folio-s2-f3-c2-benefits-allowances-received-employment.html

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Even though the folio is currently unavailable, you can use the Internet Archive Wayback Machine: https://web.archive.org/web/20140101000000*/cra.gc.ca to look at a copy from a short while back. This site has archive copies of .CRA’s site that go back to March 2004.

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Fantastic! Thank you. :grinning:

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Thanks for all the feedback!