For all Canadian businesses that have employees on their payroll, the deadline to file your T4s is February 28th, The good news is that it has become much easier to do particulary if you are efiling. The Canada Revenue Agency (CRA) is encouraging businesses to file electronically (efile) the T4s and it should be noted thate-filing is mandatory for employers with more than 50 employees.
If you are planning to efile, ensure that you have received a letter from the CRA with your Identification number and Web Access Code. If you did not receive it or have inadvertantly discarded it (not that you would ever discard government documentation), then it might make sense to call and ask them to resend the info. If you are filing electronically, do not send them a paper copy of the slips or summary.
Before starting the process with Quickbooks, ensure all that your employees have all their personal info, employment and compensation info completed . If there is missing information you will have trouble generating the T4.
The process of filing your T4s is quite simple with Quickbooks, barring any errors in payroll item setup and requires the following steps:
- From the toolbar Select employees/payroll forms/Process T4s
- Ensure that you have checked the 2010 calendar year and select "Original" form (unless, of course, you are sending an amended form)
- Check all employees
- At the bottom of the screen select review. This will take you to the T4 forms. Carefully review each form for reasonableness. *You can make manual changs to the forms by double clicking on the box that needs to be changed. QB will give you the option to add amounts and a description. This can come in handy for taxable benefits like health insurance (Quebec) or car allowances.*
- Print employee copies. You should consider keeping a copy for your own files as it provides for quick reference when employees (inevitably) lose forms or if the CRA has questions etc.
- After printing, select the efile option. Quickbooks automatically generates an efile number and asks for a transmitter number. It is not necessary to input this at this juncture (00000 is fine). Fill out the rest of the form and click on send. Quickbooks generates an xml file and lets you know that it is sending to you the CRA website. It is important to carefullynote the location of the XML file , included in this message, as you will need to attach it when you are on the CRA site.
- You will be taken to the CRA website where you will be asked for your Id number and web access code. You will then have to attach the XML file.
- Once completed, the CRA will (hopefully) give you a success message. You should print and file this as it has the transmission details and will be important in the event of a problem.
If you are filing manually, in addition to preparing the T4 slips you will also have to prepare a summary. If you have not received a form from the government you can find it here
- Complete steps 1-5 per above.
- Print a CRA copy of the forms (you will have this option when you click on print)
- Go to Reports/Employees and payroll/T4 Summary, ensure that the dates are correct and print the form.
- Once you have entered your business number etc. copy the relevant fields to the summary form. *Please note that the amount of the remittances are not indicated on the T4 Summary (from QB). As such you will have to calculate this amount. You can find total remittances paid under Reports/Vendors and Payables/Vendor balance details. The amounts paid should be reflected under the Receiver General or Canada Revenue Agency. You can export this report to excel and isolate the amounts paid. Ensure that you have 12 remittances and keep in mind that remittances paid relate to the prior month. eg. remittance paid in January 2011 will relate to December and should be included in the total remittances.*
- Mail the form plus copies of the T4 slips to this address. If you have underpaid the balance due, enclose a cheque for the difference.
- Ensure that you keep a copy of the summary/slips in your year end T4 file for future reference.
T4 filings are a necessary evil, but a good accounting software can make this process simple. It also serves a verification process.
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For help preparing your T4s and RL-1s do not hesitate to contact us.
Ronika Khanna is Montreal based accounting professional who helps small businesses achieve their financial goals. To receive regular updates of articles pertaining to small business, accounting, tax and other topics of interest to business owners you can sign up here. You can also follow her on Facebook or Twitter