I’d appreciate your guidance on a T4A Box 48 reporting situation.
My client works as a receptionist at a medical clinic and was previously treated as an employee. The employer later moved her to a “contractor” arrangement (issuing a T4A) .
My client received the T4A with income reported in Box 48 (fees for services). However, the individual works as a receptionist at a medical clinic, with duties that appear consistent with an employee-type role rather than an independent contractor arrangement. She is not registered as a business and formally registered as a business or sole proprietorship.
-Shall we continue to report her income in box 48 and fill T2125B despite she is not registered as a business or sole proprietorship? if yes 2125B/P is used, would claiming any expenses (e.g., home office or vehicle) be appropriate in this case? she works 3 days from home, and 2 days from the clinic.
-OR we report her annual income (paid monthly) in T4A box 028 or (line 13000) as other income and we don’t claim any expenses?
”I’d appreciate your guidance on a T4A Box 48 reporting situation.
My client works as a receptionist at a medical clinic and was previously treated as an employee. The employer later moved her to a “contractor” arrangement (issuing a T4A) .
My client received the T4A with income reported in Box 48 (fees for services). However, the individual works as a receptionist at a medical clinic, with duties that appear consistent with an employee-type role rather than an independent contractor arrangement. She is not registered as a business and formally registered as a business or sole proprietorship.
-Shall we continue to report her income in box 48 and fill T2125B despite she is not registered as a business or sole proprietorship? if yes 2125B/P is used, would claiming any expenses (e.g., home office or vehicle) be appropriate in this case? she works 3 days from home, and 2 days from the clinic.
-OR we report her annual income (paid monthly) in T4A box 028 or (line 13000) as other income and we don’t claim any expenses?”
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Private (especially one-sided) name-labelling does not trump tax law or employment law, so there is a problem.
No CPP/EI withheld - she may owe both portions
Since you say she was employed, and then terminated as an employee, she has a few options:
She could apply for EI
Service Canada may review status - Can trigger a ruling that she was actually an employee
Request a CRA ruling - File Form CPT1 with the Canada Revenue Agency:
CRA will officially determine employee vs contractor
Employment standards complaint - Through the provincial authority (Employment Standards Branch): claim unpaid vacation pay, stat holidays, termination pay; they assess true employment status
Civil action - Sue for wrongful dismissal / unpaid entitlements
Courts often reject “contractor” labels if facts don’t support them
Before tax filing, she needs to request this (CPT1):