Tax Implication Letter for 2021
As the tax season is again upon us, the CFPA would like to remind you of the tax implications of the Association paying for a member’s Basic Life Insurance from your dues. According to tax regulations, the gross amount of dues paid for the year (Box 44 of your T4 from your employer), must be reduced by the amount that has been remitted by the Association on your behalf for the Basic Life insurance premiums ($6.60 per month for January through December 2021). Therefore, when you file your tax return for 2021, you must deduct $79.20 from the amount in Box 44 of your T4 slip and this net amount should be reported to Revenue Canada on line 212 on your tax return.
It is important to do this so that any benefits remain tax-free. As long as the individual was paying for the premiums out of their after-tax income, should a claim be paid, all insurance income will then be paid without being subject to tax.
In addition to this deduction, you may be able to claim certain home office expenses. You will find more information here: Home office expenses for employees - Canada.ca
We would also like to remind you that all insurance-related documents are now available online at www.cfpa-apfc.ca in the member section. If you are unsure of your password or have any questions or concerns regarding this correspondence, please do not hesitate to contact Sean Yim, our Office Manager, at (613) 230-5476.