Dear Mr. Koyanagi,
I hope this finds you well.
As mentioned by Brittany, I am an attorney in Lavery's tax team and have examined the questions listed hereafter which you have sent us in a previous email to Brittany about your current practices regarding source deductions forms TD-1 and TP-1015.3-V (the "Forms"). Please find our answers below.
1) Is this mandatory? Do all employees have to fill these out?
Yes, filling the Forms is mandatory, although the obligation to do so lies upon the employees and not the employer. According to both the federal Income Tax Act, R.S.C., 1985, c. 1 (5th Supp.) (the "Federal Act") and the Qu�bec Taxation Act, CQLR c. I-3 (the "Qu�bec Act") and applicable regulations, all new employees must complete both Forms upon commencement of employment to determine their applicable source deduction rates. The Forms' purpose is for employees who are for diverse personal reasons (listed in the Forms) eligible to higher personal tax credits for the year to request that their employer reduce their applicable source deduction rates (since higher personal tax credits mean less taxes and, if properly requested through the forms, reduced source deductions). Even when no special situation is applicable to any employee, all employees must still fill and remit the Forms to their employers and usual source deduction rates will apply. New copies of the Forms must be filled by an employee within seven (7) days of a change in his situation which may increase or reduce his applicable personal tax credits.
2) Should we now include them in our hiring package for caregivers?
Yes. It is best practice to include the Forms in your hiring package going forward, since tax authorities' administrative policy considers that employers should make the Forms available to new employees.
3) If it is mandatory, do we need to go back and have existing?employees now fill them out?
If possible, yes. The legal obligation of filling the Forms relies on the employees, but administrative policy states that employers must keep copies of the Forms for all employees on file. However, as previously mentioned, the legal burden of filling the Forms rely on the employees whereas the legal burden to withhold and remit source deductions relies on the employer. Given that your internal or external payroll deduction service has always applied the usual source deduction rates applicable as per the federal and Qu�bec source deduction tables and has not reduced the source deductions of any employee without first obtaining justification for such a reduction through the Forms, your legal obligation as an employer regarding source deductions is duly fulfilled.
In the context where your organization has always applied the appropriate rates as per the source deductions tables (that is, without reducing source deductions for situations listed in the Forms), there should not be any issue since the employer's obligation to withhold and remit source deductions has been filled. It should be noted that no employee who has not filled the Forms may take action against an employer who has withheld and remitted too much source deductions. This is because 1. both the Federal Act and the Qu�bec Act prescribe that no action may be taken against a person a withholds an amount by virtue of these laws, such as employers withholding source deductions; and 2. the employee should normally get the amounts excessively withheld as a tax refunds.
Employees who have not filled the Forms are liable to penalties. In practice, however, these penalties are applied when an employee benefitting from a reduced rate of source deductions has not filled new Forms to inform his employer that the reduced rates are no longer applicable due to a change in his situation. When no reduced rates have been applied to an employee, there should not be an issue.
For the purposes of this email, we have worked under the assumption that, notwithstanding the present TD1/TP-1015.3-V issue, your obligation as an employer regarding source deductions have been duly filled. Should you believe that reduced source deduction rates have been applied or that your obligations as an employer regarding source deductions have not been filled, please inform us so, in order for us to properly assess risk and, if necessary, propose remedies.
Should you have any question regarding this email, please feel free to contact me.
Best regards,
ECL
ETIENNE C. LAPLANTE
TAX LAWYER, Lavery, de Billy L.L.P.
TELEPHONE : 514 877-2922
ECLAPLANTE@LAVERY.CA<mailto:ECLAPLANTE@LAVERY.CA>
[X]
LAVERY, DE BILLY, L.L.P. [X] LAWYERS
SUITE 4000, 1 PLACE VILLE MARIE, MONTREAL, QUEBEC H3B 4M4
TELEPHONE: 514 871-1522 FAX: 514 871-8977
lavery.ca<http://www.lavery.ca/>
[X]<http://www.linkedin.com/company/797440?trk=tyah> [X] <https://twitter.com/LaverydeBilly> [X] <https://www.facebook.com/LaverydeBilly>
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This email and its attachments are confidential and are for the sole use of the addressee.
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De : Carson Brittany <BCarson@lavery.ca>
Envoy� : 22 f�vrier 2022 15:02
� : Steve Koyanagi <skoyanagi@homecareassistance.com>
Cc : Timothy Thomas <tt@homecareassistance.com>; Parent Jessica <JParent@lavery.ca>; Laplante �tienne C. <eclaplante@lavery.ca>
Objet : RE: Source deduction forms
Hi Steve,
Yes, my colleague �tienne (copied here) was looking into this and will get back to you shortly.
Thanks!
Brittany
BRITTANY CARSON
ASSOCI�E | PARTNER
T�L�PHONE : 514 877-3027
BCARSON@LAVERY.CA<mailto:BCARSON@LAVERY.CA> [X] VCARD<http://lavery.ca/upload/vcard/brittany-carson-fr.vcf> [X] PROFIL<http://lavery.ca/avocats-parajuristes-notaires-lavery/profil/brittany-carson/>
[X]
LAVERY, DE BILLY, S.E.N.C.R.L. [X] AVOCATS
BUREAU 4000, 1, PLACE VILLE MARIE, MONTR�AL (QU�BEC) H3B 4M4
T�L�PHONE : 514 871-1522 T�L�COPIEUR : 514 871-8977
lavery.ca<http://www.lavery.ca/>
[X]<http://www.linkedin.com/company/797440?trk=tyah> [X] <https://twitter.com/LaverydeBilly> [X] <https://www.facebook.com/LaverydeBilly>
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Si vous avez re�u ce message par erreur, veuillez le supprimer sans d�lai et en aviser l'exp�diteur.
This email and its attachments are confidential and are for the sole use of the addressee.
If you received this message by mistake, please delete it immediately and notify the sender.
From: Steve Koyanagi <skoyanagi@homecareassistance.com<mailto:skoyanagi@homecareassistance.com>>
Sent: February 22, 2022 2:11 PM
To: Carson Brittany <BCarson@lavery.ca<mailto:BCarson@lavery.ca>>
Cc: Timothy Thomas <tt@homecareassistance.com<mailto:tt@homecareassistance.com>>; Parent Jessica <JParent@lavery.ca<mailto:JParent@lavery.ca>>
Subject: Re: Source deduction forms
Ce courriel provient d'un exp�diteur externe. Soyez vigilant avant d'ouvrir une pi�ce jointe ou de cliquer sur un lien.
Hi Brittany,
Hope you had a good weekend. Following up if you are able to get us in contact with the appropriate person at your firm. Thanks!
On Wed, Feb 16, 2022 at 11:42 AM Steve Koyanagi <skoyanagi@homecareassistance.com<mailto:skoyanagi@homecareassistance.com>> wrote:
Thanks, Brittany.
On Wed, Feb 16, 2022 at 11:12 AM Carson Brittany <BCarson@lavery.ca<mailto:BCarson@lavery.ca>> wrote:
Hi Steve,
I would recommend you speak with one of our tax specialists. I will put you in touch with the right person.
Thanks!
Brittany
BRITTANY CARSON
ASSOCI�E | PARTNER
T�L�PHONE : 514 877-3027
BCARSON@LAVERY.CA<mailto:BCARSON@LAVERY.CA> VCARD<http://lavery.ca/upload/vcard/brittany-carson-fr.vcf> PROFIL<http://lavery.ca/avocats-parajuristes-notaires-lavery/profil/brittany-carson/>
LAVERY, DE BILLY, S.E.N.C.R.L. AVOCATS
BUREAU 4000, 1, PLACE VILLE MARIE, MONTR�AL (QU�BEC) H3B 4M4
T�L�PHONE : 514 871-1522 T�L�COPIEUR : 514 871-8977
lavery.ca<http://www.lavery.ca/>
_____________________________________________________________ <http://www.linkedin.com/company/797440?trk=tyah>
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This email and its attachments are confidential and are for the sole use of the addressee.
If you received this message by mistake, please delete it immediately and notify the sender. <http://www.linkedin.com/company/797440?trk=tyah>
From: Steve Koyanagi <skoyanagi@homecareassistance.com>
Sent: February 16, 2022 2:10 PM
To: Carson Brittany <BCarson@lavery.ca>; Timothy Thomas <tt@homecareassistance.com>; Parent Jessica <JParent@lavery.ca>
Subject: Fwd: Source deduction forms<http://www.linkedin.com/company/797440?trk=tyah>
<http://www.linkedin.com/company/797440?trk=tyah>
Ce courriel provient d'un exp�diteur externe. Soyez vigilant avant d'ouvrir une pi�ce jointe ou de cliquer sur un lien. <http://www.linkedin.com/company/797440?trk=tyah>
<http://www.linkedin.com/company/797440?trk=tyah>
Hi Brittany/Jessica,<http://www.linkedin.com/company/797440?trk=tyah>
<http://www.linkedin.com/company/797440?trk=tyah>
Hope you've been well. Are you able to provide some guidance on potential risk with our current practices outlined below? Any insights you have would be appreciated.<http://www.linkedin.com/company/797440?trk=tyah>
From: Sandra Daoust <sdaoust@homecareassistance.com>
Date: Wed, Feb 16, 2022 at 10:04 AM
Subject: Source deduction forms
To: Timothy Thomas <tt@homecareassistance.com>
Cc: Joey Taylor <joey.taylor@homecareassistance.com><http://www.linkedin.com/company/797440?trk=tyah>
<http://www.linkedin.com/company/797440?trk=tyah>
Good morning Tim, <http://www.linkedin.com/company/797440?trk=tyah>
<http://www.linkedin.com/company/797440?trk=tyah>
As discussed this morning, it has come to my attention that new employees should be completing two forms upon being hired to determine their source deductions (TD-1 for Canada and TP-1015.3-V for Quebec). Currently our payroll system is set up to have statutory deductions removed at the base level. If any employee wants more, they advise us and we adjust accordingly. I did some digging, and the CRA says that everyone should be completing these forms when hired. We are not currently doing that. I have spoken to Joey as well and we are wondering:<http://www.linkedin.com/company/797440?trk=tyah>
<http://www.linkedin.com/company/797440?trk=tyah>
1) Is this mandatory? Do all employees have to fill these out?<http://www.linkedin.com/company/797440?trk=tyah>
<http://www.linkedin.com/company/797440?trk=tyah>
2) Should we now include them in our hiring package for caregivers?<http://www.linkedin.com/company/797440?trk=tyah>
<http://www.linkedin.com/company/797440?trk=tyah>
3) If it is mandatory, do we need to go back and have existing employees now fill them out?<http://www.linkedin.com/company/797440?trk=tyah>
<http://www.linkedin.com/company/797440?trk=tyah>
The forms will be very complicated for our caregivers to complete. The majority won't know what they are and what they are for.<http://www.linkedin.com/company/797440?trk=tyah>
<http://www.linkedin.com/company/797440?trk=tyah>
I would appreciate some guidance on this so that we can take the right steps.<http://www.linkedin.com/company/797440?trk=tyah>
Thanks.
Sandra
<http://www.linkedin.com/company/797440?trk=tyah>
[https://lh3.googleusercontent.com/nzOaGXYMKqBGVMfFp7fCoB4SM_uXoraz2cSreHCGJZyMF810XIFHrsYbYwDoOIkNbNRDTvOZpgvVwM2kW6weI9tEz_dKpqsHSd8ChDA392vnyaYzyHwyrcUQ67145XUA0JWjinXn] <http://www.linkedin.com/company/797440?trk=tyah>
Sandra Daoust [https://lh5.googleusercontent.com/DCPOkPP_IRGLEogePffwe493JjyIIN9LMQzJrbbivziEWWPznJCCwkn0C6B_hVqhfCwHXkYHEDDhEaA0ZyH461lQNUCWSs1rp9qmPt8kifPUR1Z_lwJ4kWP_yyHA4D016KOSsvEj] [https://lh6.googleusercontent.com/r000-KPncf9fABQgR7Ot4b6GoH9dBSAI9Hyiac8s54ZliYzhRd8LJG8FyEbv6x8tr_zHs9ZvnyOqoIH9UY0acHpi5f-lOpGKv0msJlPdwuNiknpvZgUIIrgN3cqYMmg5ThsN1IOx] [https://lh5.googleusercontent.com/fRSfq5cNWUVZcAWodSeEU52OlK80FFAWHA56vzlP8qsGE25aakvp2Yz-5lfEnT7LIZHUeJuR-QlfVyYdqdlda2kq9ikJ13H2UouEZtonW_pvZ-4b2444mPsFA1v-9m22gTTcYM4C] <http://www.linkedin.com/company/797440?trk=tyah>
Directrice des Op�rations<http://www.linkedin.com/company/797440?trk=tyah>
Operations Manager<http://www.linkedin.com/company/797440?trk=tyah>
Tel: 514.907.5065 | Fax: 514.221.4265<http://www.linkedin.com/company/797440?trk=tyah>
sdaoust@homecareassistance.com | Homecareassistancemontreal.ca<http://www.linkedin.com/company/797440?trk=tyah>
<http://www.linkedin.com/company/797440?trk=tyah>
<http://www.linkedin.com/company/797440?trk=tyah>
<http://www.linkedin.com/company/797440?trk=tyah>
Timothy Thomas
Head of Canada
Home Care Assistance
Office: 514-907-5065
Fax: 514-221-4265
4464 Ste Catherine West
Westmount, QC, H3Z1R7
HomeCareAssistanceMontreal.ca
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