Pay: Statements, Backpay, Benefits, Deductions (Taxes, T4), Deployed ect... [MERGED]

[Bruce Monkhouse]

Sorry, this is still not making sense to me....

Payroll just sends money to the Govt., everything else is based on what paperwork you send........

 

[KatFleming]

Ok, simply put ( as I used to be reserve pay clerk )

Military members fill out TD1 forms
most forget to update them when their situation changes ie. get married/divorced, have children, wives lose/gain employment, children turn 18 or move out etc.

My husband filled one out when he joined the military and it stated he had 2 dependent and 1 child.
For some reason, the military has him down as single, no dependents for tax purposes.
He has been overpaying his federal tax by close to $200 a month for 3 years.
At tax time, we claim married, 2 children. We get next to nothing back every year and have not received an HST check nor have our child benefits been anything to write home about. We assumed this was normal.
This year we received a letter from the CRA stating that he was being audited. We had claimed that he had lived in one province, I in another. I lived in Ontario and he in NB due to parental leave and courses. We did not live together for 11 months.
They sent paperwork asking us for proof of marriage and to fill out paperwork for our children. We had to prove both children were his! We wend everything in and then we receive a phone call from CRA. They state that DND has husband down as single no dependents for 3 years. They even have us go online with them and follow pages upon pages of gov sites and fill out things and print them off to show how things SHOULD reflect. We had to take them in to pay office. Things are slowly working out.

It is a HUGE mess to say the least. All this mess because of one little mistake. We had a screw up like this back around 2008-09 when I was posted in Borden. The military ended up paying the member and dealing the the CRA themselves for payment. None of my business, but things change on a daily basis, so I was just looking for input.

 

[captloadie]

I would love for a current RMS clerk to chime in on this and answer one question for me: What does my marital status and number of dependants have to do with the taxes taken from a members pay? I have been married and had three kids since I joined, and not once did I notice my taxes deducted from pay change, unless a pay increase was involved.

However, the OP must realize that the little mistake sounds like it was was magnified because some documents weren't properly submitted by herself or her spouse. CRA doesn't find out about your family situation from an employer, they find out about it from you.

Are these children from a different marriage? Is child support or alimony somehow involved? These would be the only times that I know of that the CF would get involved when dealing with how pay, garnished wages, and taxes etc.

 

[dapaterson]

TD1 Forms are online at: http://www.cra-arc.gc.ca/formspubs/frms/td1-eng.html

You can reduce taxes withheld at source by declaring that you have children; note that only one spouse can claim children.  If you provide a TD1 to your pay office you can get your taxes adjusted.  It will mean a smaller refund.


In this case, if I understand:  Until now, the CF has been withholding taxes based on your husband beign single.  Normally, he would get back excess tax paid when he files his return, but because you and he were filing with different provinces CRA called things into question.

I am not an admin god, but I think you need to confirm where your husband should have been filing taxes for times he was away on course.  It may be that although he was living at CFB Tisdale, Saskatchewan while on course (for example), his residence was really Bracebridge, Ontario for income tax purposes.

SISIP financial services offers services and support to CF members at no cost; it may be worthwhile to talk to them about your situation.

 

[KatFleming]

Thanks

My husband has always been the one to claim our children and all extras. We have been dealing with SISIP for about a year now, with RRSP's etc. Even our rep was a little disturbed by this info. I am just glad that it is overpayment by him, instead of not paying enough. I have seen how that can hurt families

 

[armyvern]

Thanks

My husband has always been the one to claim our children and all extras. We have been dealing with SISIP for about a year now, with RRSP's etc. Even our rep was a little disturbed by this info. I am just glad that it is overpayment by him, instead of not paying enough. I have seen how that can hurt families

That, then, may be exactly your issue.

Both my Service spouse and I pay taxes from our pay as "single" as this ensures that we will owe nothing at tax time. We file our taxes as "married" each and every year - have claimed childcare etc ... we have NEVER had a problem as one has absolutely nothing to do with the other.

Who does your taxes for you? CRA is very clear that the spouse with the lesser income (even if that income is zero) must be the one who claims dependent and their write-offs for childcare, sport activities etc. Check out the income tax guide as an example. Line 214 to be exact. Here is a link to T778 (Childcare Deductions), the only exceptions to "lesser income must claim deductions for dependents" occurs if you fall into either Part C or D of the form.

As you stated you were ResF, I will assume that you actually earn less than your spouse, yet he is the one claiming the write-offs (by your post above); Yep, that will cause an audit and the owing of some monies ... especially if you don't fall into category C or D of the form (medically incapable of caring for them [suspect not if you are ResF] or enrolled as a fulltime/part time student at a recognized educational institution). If that's the case, be thankful they are only looking for their money back and not levying a charge of income tax fraud.

Either way, it has nothing to do with the CF or the pay office as CRA doesn't care whether your employer deducts you as single or married --- only that, at the end of the year, they get what they are owed based upon your actual marital status and your claims/deductions being filed as per regulation.

 

[KatFleming]

Just for clarification, I not my husband is the breadwinner lol
I have made more than he,l even being ResB, and have since we began our relationship. I held 2 jobs for 11 years and have only been a non active member for 2 years now

 

[George Wallace]

Just for clarification, I not my husband is the breadwinner lol
I have made more than he,l even being ResB, and have since we began our relationship. I held 2 jobs for 11 years and have only been a non active member for 2 years now

No matter if he is or you are, the facts do not change.  I am surprised that you claim to have been a Reserve Fin Clerk and this is not common knowledge to you. 

 

[bridges]

I am surprised that you claim to have been a Reserve Fin Clerk and this is not common knowledge to you.

:facepalm:  I was a Fin Clk and then Log O(Fin) for 19 years and hadn't heard of the issue the OP raised, nor that the lower-income spouse must be the one to claim such deductions.  Financial administration is a wide-ranging field even just within DND, let alone the GoC as a whole.  The OP came for advice, and got it - let's leave it at that. 

 

[DAA]

I would love for a current RMS clerk to chime in on this and answer one question for me: What does my marital status and number of dependants have to do with the taxes taken from a members pay? I have been married and had three kids since I joined, and not once did I notice my taxes deducted from pay change, unless a pay increase was involved.

ding ding......The CF, as your employer, is obligated to deduct taxes at source (ie; directly from your pay) and remit these to CRA.  The amount that is deducted monthly is based on your system status (ie; the Tax Status in CCPS).  A single member would by default pay the most as they have little by way of Tax Credits to claim when filing personal tax returns.  By providing source documents to your supporting Pay Office/OR, you can have your Federal and Provincial Tax details updated which in turn can either reduce the amount of taxes at source or increase them. (eg; by adding your spouse and or children, you will pay "less" than a single member).

Adding dependants to your Tax Status is a default function completed by your Orderly Room (if they remember to do this) when you report getting married or have a child.  You are NOT obligated to change this and can continue to pay taxes as a "single member", in which case when you file your annual Tax Return and claim the "spousal" and or "dependant" amounts, you will receive a "refund" from CRA.  Some people choose to leave theirs as single and some choose to add their dependants.  Most other changes require completion of a TD1 or an Annual Letter from CRA.

If your spouse is paying as a "single member" and then claiming the appropriate deductions at tax time (ie; you and the children), then he should be getting money back.  Have your spouse tell his supporting Orderly Room that he would like to see the "Tax Menu" on his Pay Account.  This info can be seen on the "F5" screen or at system code "FZQEEE (View Tax Summary)".  They can also do a "Simulated Tax Change" to see what the impact is.

At the end of the day, the CF merely deducts tax at source and then it is your responsibility to file a Tax Return with CRA.  Tax rates vary from province to province and if your OUTCAN, your paying based on your last province of residence prior to leaving Canada.  The tax rates DO NOT CHANGE for TD and shouldn't change for Attach Posting either.

On a side note, Res F Fin Clks work with a totally different system than that of the Reg F counterparts.

 

[RLD]

This year we received a letter from the CRA stating that he was being audited. We had claimed that he had lived in one province, I in another. I lived in Ontario and he in NB due to parental leave and courses. We did not live together for 11 months.

I suspect this situation has little to do with DND deductions but comes down to satisfying CRA on several issues including Residency (provincial), Marital Status and Child Custody. The fact that you and your spouse/common law partner filed in different provinces probably tripped a flag with the CRA computer and they decided to investigate the situation. This is not unusual and doesn't necessarily mean anything was wrong but CRA usually gives taxpayers a short period (30 days) to satisfy them regarding their questions and if the taxpayer doesn't they will reverse any credits/deductions claimed and send out a bill. I have seen this a number of times in the reverse situation i.e. a single/seperated/divorced parent claiming the amount for an eligible dependant having to prove that there is no common law partner or spouse.

Regarding Residency: Provincial tax rates and credits vary quite significantly and could significantly impact your taxes if CRA determines your residency for tax purposes differently that you and your spouse/common law partner. If your spouse/partner was away on TD or attach posting then CRA would likely still consider him/her to still be resident in the same province as you even if he/she was away on 31 Dec. On the other hand if he was posted and the family remained behind you could probably claim different provinces.  CRA looks at things like did he/she maintain a seperate residence (e.g. rent an apartment) and move most of his belongings or just take a few belongings and live on base. Did he/she get a driver's licence in the new province etc? If they consider that he/she was in NB for employment but still had his primary residential ties in ONT they may require him to file in ONT.

Regarding Marital Status: Since you are residing seperately CRA may ask for proof of marital status. If you are married then it should be pretty easy. If you are common law it might be a little more difficult. Did you file an RC65 (change of marital status) with CRA when you were married/bacame common law? If not that may be the problem. Filing an RC 65 now should help but they may ask for some supporting documentation e.g. a letter from someone in authority (e.g. Commanding Officer, a lawyer - mother friend etc won't cut it) who has knowledge of your marital situation. If this is what they are questioning find out from them what they consider proof.

Regarding Child Custody: Again CRA may ask for proof  that the children are eligible for the credits being claimed. If they are you and your partner's by blood then a birth certificate should suffice. If there is another parent in the picture CRA may ask for proof that the other parent is not going to claim any credits for the child, i.e. a letter from the other parent stating they are not claiming the child. If the children live with you they may be questioning why your spouse/partner is claiming the children. Tax regulations state that if the child resides with only one parent then only that parent can claim the child but I am pretty sure that is only intended for seperated/divorced situations. If you are married common law then if you claimed them and weren't able to use the credits yourself you would be able to transfer them to your spouse/partner so the net benefit to the family is exactly the same. You indicate you did not live together for 11 months. I assume this was due to the employment situation and not due to a breakdown in the relationship. If there was a relationship breakdown and you claimed an amount for an eligible dependant then your spose/partner could not claim the child who was claimed as the eligible dependant. The other thing to watch for with children is child care. Only the lower income spouse/partner can claim (with a couple exceptions).

As others have pointed out this doesn't seem to have much to do with DND deductions at source although changing provinces can make for a big tax surprise if you move from a lower tax province to a higher tax province and don't factor it into your withholdings at source. The fact that your spouse/partner was claiming as single with his employer may have added to the alarm bells at CRA but it is not a conclusive fact in making any tax determination - many people do this with the intention of getting a nice refund. It seems like an issue to be sorted out with CRA and I would recommend getting in writing from CRA exactly what they are questioning and what proof you have to provide to satisfy them. If you still aren't clear and are talking a significant sum of money you might want to talk to a tax professional such as H&R Block or Liberty Tax. If you go this route be sure to explain the situation and ask for a senior tax professional who has experience in dealing with the CRA on these types of issues.

Hope this is helpful.

 

[armyvern]

...

Regarding Residency: Provincial tax rates and credits vary quite significantly and could significantly impact your taxes if CRA determines your residency for tax purposes differently that you and your spouse/common law partner. If your spouse/partner was away on TD or attach posting then CRA would likely still consider him/her to still be resident in the same province as you even if he/she was away on 31 Dec. On the other hand if he was posted and the family remained behind you could probably claim different provinces.  CRA looks at things like did he/she maintain a seperate residence (e.g. rent an apartment) and move most of his belongings or just take a few belongings and live on base. Did he/she get a driver's licence in the new province etc? If they consider that he/she was in NB for employment but still had his primary residential ties in ONT they may require him to file in ONT.

...

To be clear on the yellow bit (my highlight), CRA is clear that if a military member is posted/TDd/Attach Posted away and leaves family behind (IR, course, unaccompanied etc), then the military member is considered to be a resident of the province where the family (DF&E) is located on 31 December and must file taxes as such.

Member's on IR must file their taxes based upon where their family is located, not where they are located. Those IR guys are not paying "rent" at their location, rather the taxpayer is covering that for them; same as if they were in shacks while on course, TD, deployed on 31 Dec etc.

 

[RLD]

Agree ArmyVern. I was not as clear as I should have been. The point I was making is CRA does not just use location on 31 Dec to determine residency but also looks at residential ties. Location of dependants is a big one that is hard to top and in the situation described CRA would almost certainly determine that the province of residence for both is ONT since the family was in ONT. I was trying to make the point that there are other factors that can enter into the determination although none of these factors is disclosed in the info provided. On a positive note the ONT tax rates are generally lower than NB so it may be beneficial for both to claim ONT.

 

[PiperDown]

On my monthly pay statement I do not have a monetary deduction for provincial income tax.  This isn't something new, I have had a 0.00 amount entered in the provincial tax block on my pay statement for at least 5 years.

But, according to the CRA wrbsite there is a tax rate for provinces.  I file my taxes each year, and indicate my province of employment.


Any fin people care to explain ? 

 

[Char1991]

On my monthly pay statement I do not have a monetary deduction for provincial income tax.  This isn't something new, I have had a 0.00 amount entered in the provincial tax block on my pay statement for at least 5 years.

But, according to the CRA wrbsite there is a tax rate for provinces.  I file my taxes each year, and indicate my province of employment.


Any fin people care to explain ?

There are three types of taxes in Canada; HST, GST, and PST.

HST is a combined provincial and federal tax rate.  Where as GST and PST are charged each in other provinces, except Albert with just GST.

Here's a link that shows what each province taxes

Basically, unless you are in a PST using province, you'll only ever pay HST which is called Federal tax on your pay slip.

Hope this helps. 

Edit: I'm talking sales tax.  Going back to bed before I post other crap.

 

[SeaKingTacco]

Nice try, Charl- but no.

In most provinces, the Feds collect the provincial income tax on behalf of the province and remit it to that province. It is built into the federal tax deduction box as combined amount. So, your provincial tax box on your pay statement remains empty.

The only province that I am aware of where that is not the case, is Quebec.

 

[klacquement]

There are three types of taxes in Canada; HST, GST, and PST.

HST is a combined provincial and federal tax rate.  Where as GST and PST are charged each in other provinces, except Albert with just GST.

Here's a link that shows what each province taxes

Basically, unless you are in a PST using province, you'll only ever pay HST which is called Federal tax on your pay slip.

Hope this helps. 

Note that HST, GST, and PST are sales taxes.  PiperDown is referring to income taxes.  The rates depend on the province that he lives in.  I don't know why there would be nothing deducted though.  Where are you living, Piper?

 

[PiperDown]

Ontario.

I can't be sure what my deduction was ( if any ) when I was in MB 5 years ago.  ( I would have to check my pay statement archives which are locked away in another location )

 

[SeaKingTacco]

I'm recently from MB and I am reasonable certain that there was no provincial tax shown on my pay statement.

Are you, perhaps, getting this confused with your T4 slip, which will show how much provincial tax that you paid?

 

[DAA]

Your Monthly Pay Statement will only show Fed Tax.  Just the way it is done.  But rest assured, a portion of what you see, does go to your respective province.  The pay system takes into account your "province of employment" and adjusts itself accordingly.  Even the RPSR (Res F) Pay Statements do not show provincial tax, so I would not be worried about it.