Pandemic Health Protocols

For the immediate future, we will be continuing to maintain the health protocols that we started following in the Spring of 2020. That is, face masks are to be used for in-person pick up or drop off, with the mask covering both the nose and the chin. Any in-person meetings will have to take place outdoors, as we do not have appropriate ventilation inside the office.

Clients may make use of various electronic service options. All of these offer comparable service to in-person appointments without any risk of infection from contagious diseases. If there are counter-indications for your particular needs (such as a requirement for a physical signature,) we also offer additional alternative delivery mechanisms and are happy to recommend those options. Please feel free to discuss with us about your needs and concerns.

In Mid-October 2021, when we complete moving into our new office, we will evaluate if the protocols require further revision.

Advanced Tax Returns

For clients who have prepaid for a 2021 Advanced Tax Return (included in the Tax Reduction Plan), the initial release of the 2021 planner was just issued.

Clients who have prepaid for a 2021 Advanced Tax Return may now start gathering their records at this time. However, the accuracy is limited as not all legislative changes are known at this time. It remain possible that Federal or Provincial Budgets will change some rules.

In general, I recommend waiting for obtaining your Advanced Tax Return until later in the fall. By default, should you not already have obtained this service by the end of October (or when the Federal Government issues its budget, whichever is first,) you will receive a reminder email at that time.

CRA now requiring Two Factor Authentication

The CRA is now requiring taxpayers to use Two Factor Authentication (2FA) in order to log into their computer systems.

The version of 2FA that the CRA uses is based on SMS or VoiceCall to a known phone number. That is, they will either text or call you with the access code. If you try to access the account too many times without successfully logging into the account, your account will be locked.

Clients are advised to ensure that their phone number is kept up to date at the CRA as I do not transmit phone numbers to the CRA when I file the tax return.

(Be advised that the 2FA that the CRA is using can be hacked by SIM swapping as well as when you lose your cell phone. Caution is advised.)

My employer is saying that I don’t need the T2200S

I have now heard from a few clients about their employer saying that I don’t need the T2200S to claim my home office expenses. Is that correct?

There are a couple of points that I would like to make about employers telling their employees that they don’t need the T2200S.

One, the employers do not have the right to instruct their employees on how they are to file the tax return. If they do, they are over-reaching their authority as an employer. No employer has the right to instruct their employees what they are to do outside of work, unless that behaviour reflects badly on the employer. Equally, by doing so, the employer is opening themselves up to being sued by their employees for providing bad advice if the method that the employer wants the employees to use isn’t to the advantage of the employee.

Would you be willing to commit fraud because your employer instructs you to do so?

Two, the CRA requires that you provide the T2200S later, if they then demand the T2200S from the employer to prove that you can claim the deduction. All that they have said that you don’t need the T2200S at the time of filing. They said nothing about requiring it later. They can ask for it up to six years after they issued the Notice of Assessment.

Finally, the CRA has privately indicated to tax preparers that we are required to ask for the T2200S before we file the tax return. Otherwise, they will charge us!

So I recommend that all employees ask their employer for the T2200S automatically if they were moved to working from home due to COVID-19 on or after March 15, 2020.

Phoenix T4 Slip Error

I just noticed this error on a government T4 slip. This is for T4 slips for employees posted overseas. The primary worker who may be affected are members of the Diplomatic Corp. Individuals working in private industry such as the Oil Sector may also be affected.

Background

The definition for province codes for T4 slips may be found by checking this following web page. If you check the instructions for Box 10 – Province of Employment, the government has standardized all the codes.

These codes reflect the same two character provincial abbreviations used by Canada. The only two exceptions are:

  • US – for employment in the US, and
  • ZZ – for other, meaning that the employee worked in a country other than Canada or the United States, or if the employee worked in Canada beyond the limits of a province or territory (for example, on an offshore oil rig).

Problem

Phoenix has used the code EX instead of the authorized codes.

All government workers who work outside of Canada (principally the diplomatic corp,) will probably have their T4 slips registered at the Canada Revenue Agency with this wrong code in box 10. As a result, any person who downloads these tax slips will likely have a problem with importing the tax slip into their tax return, if you use tax software.