November 13, 2014

CRA Makes Changes to Taxable Disability Plan Payments

When an employer pays any portion of the premium for short- or long-term disability coverage, the benefit upon claim is considered taxable income to the employee. Currently employees with taxable disability benefits can opt to have the insurance company withhold a specific amount or percentage from their benefit payment for taxes. Alternatively, they may choose to pay the taxes when they file their annual income tax return.

Effective January 1st, 2015, the Canada Revenue Agency will require that plans be taxed at the source using payroll tax tables and basic personal exemption amounts. This means that employees who are in receipt of taxable disability payments and do not currently have the tax deducted by the insurance company, may see a reduction in their monthly net benefit payment.

Quebec employees have always had the provincial tax deducted before payment was issued. They will now also have the federal tax deducted in the same way.

No action is required on your part. The insurance companies will advise claim recipients impacted by this change and will make the necessary adjustments to the claims payment.

This change only applies to disability plans with taxable benefit payments. If your disability plan is not taxable, nothing changes.

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GMS Quiz Corner

May 1, 2016

Question

What is the next number in the series?

3   6   18   21   63   ??

Answer

66

Congratulations to Igor Nikolajev – this month’s Quiz Wiz!

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