April is fast approaching and that means that tax season is nearly upon us. For employers who currently offer an employee benefits program, there are some important things to remember when filing with the Canada Revenue Agency.
- Employer-paid premiums for Life, Dependent Life, and Critical illness are taxable benefits and need to be included on your T4 as income.
- Employer-paid premiums for LTD and STD are not taxable benefits to the employee but the benefit paid to the employee will be taxable. If an employee pays the LTD and STD premium the benefit is non-taxable.
- Health and Dental premiums are non-taxable whether they are employer or employee paid. Health and dental benefits are also a non-taxable benefit to employees.
- Insurance premiums paid to a private health plan qualify as a deduction under the Medical Expense Tax Credit. You may claim the amount you paid for yourself or a family member but cannot include any amount paid for by your employer. To be eligible total medical expenses for yourself or family must exceed 3% of your net income.
Remember that it is important to keep salary information up to date to ensure that employees are receiving the proper volumes of coverage for salary-based benefits like Life/AD&D, LTD and STD. Take this time to review your records and ensure that salary information is current for 2020.
If you require more information on taxable or non-taxable benefits, do not hesitate to call your Western Financial Group Insurance Solutions at 1-800-665-8990.
