Mandatory Self Reporting for the 10% Temporary Wage Subsidy (TWS) due Before the Filing of T4s
The Canada Revenue Agency (CRA) is requiring all eligible businesses, partnerships, non-profits, charities and sole proprietors with a payroll account to file an election indicating how they have applied the 10% TWS. The PD27 10% Temporary Wage Subsidy Self-Identification Form for Employers (PD27) should be filed before the filing of the T4s. CRA has indicated the PD27 must be processed by them before the TWS credits claimed by the employer will be posted to your source deduction account. If the PD27 form is not filed before the T4s there will be a difference reported and it will result in a Pensionable and Insurable Earnings Review (PIER).
Who must file Form PD27
CRA has confirmed employers who are eligible for the 10% Temporary Wage Subsidy are required to complete and file a self-identification form demonstrating their eligibility for the program. Eligible employers who do not wish to claim any TWS and only claim the CEWS or who wish to claim a lower percentage are still required to file the PD27 form indicating the lower percentage claimed. It will be important for employers who are also claiming a Canada Emergency Wage Subsidy (CEWS) to indicate the lower percentage claimed, if applicable, as failing to do so may result in the entire 10% being credited and a corresponding reduction or recovery of their CEWS claim.
Haven’t claimed the TWS but want to?
If you did not reduce your remittances during the March 18 to June 19, 2020 eligibility period, you can still take advantage of the TWS. In this case, you can still calculate and report the eligible TWS amount and choose one of three ways to apply the subsidy. You can:
- reduce the income tax portion of your future 2020 remittances, up to the total eligible TWS amount (1,375 per employee, up to $25,000 per employer)
- request that the CRA pay the total eligible TWS amount to you
- request that the CRA transfer the total eligible TWS amount to the next year’s account (the CRA will do this after it has processed the next year’s T4 information return).
You should state how you want to apply the eligible TWS amount on your Form PD27 under Additional Comments.
Completing Form PD27
For each pay period, you will need to provide:
- Gross remuneration per pay period;
- Income tax deducted;
- CPP contribution (both employer and employee portions);
- EI premiums (both employer and employee portion);
- Wage subsidy claimed in dollars;
- Wage subsidy claimed as a percentage;
- An explanation as to which remittance(s) was reduced. If the full TWS has not been claimed an explanation of how the employer intends to reduce subsequent remittances, seek a refund, or state its intention to file only under the CEWS program.
The form can be submitted either through the payroll section of the My Business Account or by completing form PD27 and mailing it to your National Verification and Collections Centre (addresses are listed on the PD27 form).
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