Pay Raise 2021

[Rifleman62]

My grandson is owed $40,000 back pay as calculated by a accounting geek. His unit has screwed up his pay almost from day one. On deployment he received zero pay on various months. He CT'd to RegF recently and his pay is still FU.

 

[Blackadder1916]

Luxury…

Imagine having to pay taxes on 20 months of pension because team DND Pension screwed up , lost your file then sent the arrears payment conveniently to you in mid-January after they got back from Christmas leave…

Edit to explain: 20 months was 8 months of retirement year pension income thrown in with 12 months of next year full pension income. It wasn’t pretty and not a single bit of accountability from the Pension office.

Definitely not trying to defend the Pension Office (been there, f****ed over by them), but did anyone mention that the prior year amount could be treated as a QRLSP? It should have been automatic, the CRA form that is used is completed by the "payer", however "should" doesn't seem to be in the Pension Office dictionary.

The previous years tax returns won't be reassessed to account for the back payment, however it can be treated differently in the current year's return. From the form T1198 -

To the recipient: We will not reassess your returns for prior years to include this income. However, you can ask us to tax the parts for the prior years as if you received them in those years. You have to include the whole payment on the appropriate line of your return for the year. See the back of this form for details

What is a qualifying retroactive lump-sum payment (QRLSP)? A QRLSP is a lump-sum payment paid to an individual (other than a trust) in a year that relates to one or more prior eligible taxation years throughout which the individual was a resident of Canada. To be a qualifying amount, the payment must have been paid after 1994 from one of the following sources:
• income from an office or employment received under:
. . .
• benefits from a superannuation or pension plan (other than non-periodic benefits such as lump-sum withdrawals)
• spousal, common-law partner, or taxable child support payments
• benefits from a wage-loss replacement plan
• Canadian Forces members' and veterans' income replacement benefits

 

[Good2Golf]

Definitely not trying to defend the Pension Office (been there, f****ed over by them), but did anyone mention that the prior year amount could be treated as a QRLSP? It should have been automatic, the CRA form that is used is completed by the "payer", however "should" doesn't seem to be in the Pension Office dictionary.

The previous years tax returns won't be reassessed to account for the back payment, however it can be treated differently in the current year's return. From the form T1198 -

Pursued that with CRA, actually, BA, but it turned out that the Pension Office laziness/ineptitude went far enough to screw me because they integrated the backpay into the first monthly payment, so there was no separate qualifying QRLSP to which a T1198 couple be applied.

 

[Messerschmitt]

Definitely not trying to defend the Pension Office (been there, f****ed over by them), but did anyone mention that the prior year amount could be treated as a QRLSP? It should have been automatic, the CRA form that is used is completed by the "payer", however "should" doesn't seem to be in the Pension Office dictionary.

The previous years tax returns won't be reassessed to account for the back payment, however it can be treated differently in the current year's return. From the form T1198 -

Is this done through the OR? And I'm confused by "won't be reassessed" but "treated differently". So what exactly changes? Will the taxable income be less for 2021 and account for 2018-2020 back pay? Isn't this a "reassessment" though?

And if I pursue this, I cannot file my taxes using a tax program in 2021 as per the form?

 

[SupersonicMax]

Is this done through the OR? And I'm confused by "won't be reassessed" but "treated differently". So what exactly changes? Will the taxable income be less for 2021 and account for 2018-2020 back pay? Isn't this a "reassessment" though?

And if I pursue this, I cannot file my taxes using a tax program in 2021 as per the form?

That’s for pensions, not backpay. Backpay will be taxed in the year it has been received.

 

[Messerschmitt]

That’s for pensions, not backpay. Backpay will be taxed in the year it has been received.

Convenient for the state in terms of taxes...

Guess I'll have to use up some of my RRSP to pull myself down under the 26% tax.