New Employer Tax Guidelines: Canadian Dental Care Plan
Our Benefits & Group Insurance partner, Major Group, provides guidelines for employers when generating T4 and T4A slips for their employees this year.
The major implications of the recent legislative change to the Canadian Dental Care Plan, coming into effect in 2024. Designed to facilitate access to dental care and ease the financial burden, this program brings significant changes, particularly with regard to employer tax reporting. Explore the key points below to understand how this could affect your company and its obligations.
Eligibility and Dental Coverage
This plan offers dental coverage to uninsured individuals with an adjusted family net income of less than $ 90,000. It is important to note that those who already have dental insurance coverage are not eligible.
Declaration for Employers
Employers must specify eligibility for employer-sponsored dental insurance on T4 slips for active and non-active members as of December 31 of the taxation year.
New Requirements for T4 and T4A Slips
Beginning with the 2023 tax year, T4 and T4A issuers must report whether a beneficiary or family member had dental coverage as of December 31, due to current or former employment.
Changes to T4 and T4A slips
Specific boxes have been added to meet these new requirements, notably box 45 for T4 and box 015 for T4A.
Eligibility codes
Codes 1 to 5 define eligibility for employer-sponsored dental coverage, each with a specific meaning. It is imperative to enter the code corresponding to the maximum dental coverage offered by the employer, whether or not the employee has subscribed to it.
- Code 1: No dental insurance or coverage.
- Code 2: Beneficiary only.
- Code 3: Beneficiary, spouse and dependent children.
- Code 4: Beneficiary and spouse only.
- Code 5: Beneficiary and dependent children only.
Compliance and Penalties
It is crucial to complete this information correctly, as failure to do so may result in financial penalties. T4 and T4A slips must be submitted with this information, otherwise they may be rejected by the Canada Revenue Agency.
About Major Group
Major Group is an employee benefits administrator who serves tens of thousands of employees and their families through hundreds of corporate groups to constantly redefine the world of employee benefits.
If you'd like a quote for your company benefits options, or would just like a second opinion, reach out to Romano Klomp, Life & Disability Insurance Specialist at romanok@josslin.com or 1-888-567-7546 ext. 162.