Late T4

My client’s son works for a small small plumbing company that never files their T4s on time. The last couple of years they came an entire year late! I do this kid’s return as a courtesy to my long standing client. The first time this happened I advised the client to wait. He was a student at the time and expecting a refund and I didn’t want to guess how much CPP, EI and Tax was withheld. That worked out fine. Then last year I gave my client the same advice. Because he was no longer a student I thought the small salary would trigger the Canada Worker’s Benefit. The kid had no idea how much he made and I didn’t want him to get a huge refund and then have to pay it all back. Well it turns out that advice backfired on me and the kid actually owed. As a courtesy to my client, I covered the late filing and interest fees because it was my advice to wait.

Now we are in year 3 of him working for this company and he also has a second job. How should I handle this? I know that in these situations we are supposed to estimate and include a letter with the return explaining what we have done.

Can I still Efile if I write a letter and attach it to the return? Should I put the “estimate” on a T4 slip or “other employment income”? And should I include the payroll taxes in my estimates? In the past I have not charged for this kid’s tax return. I will of course start charging but what is the appropriate amount? This has been a huge headache!

Yikes! Does he at least keep his paystubs? He could calculate the T4 amounts from those, if he did. His last paystub from Dec 2023 should have the YTD info in it, so you could use that. You’ll need all of the information! Honestly, I’d do exactly what the CRA requires, including sending the letter, just in case.

This. No point in a letter (to me), nobody will see it. Just amend as soon as either matching comes to you or you get the actual T4.

(And if he doesn’t get pay stubs it will be interesting to see what happens if he is ever terminated.)

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The computer will not read the letter and no one else will look at it. Everything is computerized - from your computer to theirs. I agree - there is no point to the letter.

Thank you for your replies. NOPE-no pay stub! Not sure how this business is surviving. Apparently he left the company part way through the year so hopefully this is the last time I have to deal with them.

So I will put the estimate on a T4 slip but I am thinking to leave the tax withheld and CPP blank. It will result in him paying a little more tax now and then potentially getting a refund when the T4 comes.