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Jack_Canada
Level 5

EI repayment treated as Tax Installment?

My client was getting EI for a couple of months in 2020 due to COVID. Altogether, he received $6,500.

 

In June, 2020 his employer decided to pay him his salary for those months and advised him to repay the money to the government. In June, 2020 he paid $6,500 to the CRA.

 

According to the CRA statement, his “Installment Payments for 2020” are $6,500. So, this repayment was NOT applied to his EI he received, but treated as tax installments.

In addition, for 2020 he received a T4E slip, showing, in box 14, $6,500.

 

It makes no sense: either the T4E should have not been issued, or there should be an offsetting entry in box 30.

 

Anybody has any ideas how to deal with this issue?

2 Comments
Sunny81
Level 2

EI repayment treated as Tax Installment?

Same problem with most of client who made repayment but repayment not shown in T4A or R4E as these are issued at total initial amount.  Their My Account with CRA show repayment as instalment.  How is everybody else dealing with it?

Jack_Canada
Level 5

EI repayment treated as Tax Installment?

Since my original post I’ve had couple of similar cases. One of my clients called the CRA and, after spending 2 hours on hold, spoke to a CRA employee. He was told not to enter the amount appearing on his T4E slip on his tax return. Although I did not agree with this advice, he insisted that I not report the amount on the T4E slip. As I expected, when his tax return was assessed, this amount was added back to his income.

 

Therefore, I advise my clients to report all the income, as it is reported on T4E or T4A slips, even if it’s incorrect. Once they get the Notice of Assessment, we’ll write to the CRA, explaining the situation and asking for an adjustment.