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Employers — Don't Miss Important CPP and EI Deadlines

Employers — Don't Miss Important CPP and EI Deadlines

Employers have until December 31 to file refund applications for CPP and EI overpayments

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Eligible employers who have overpaid CPP contributions in 2014, or have overpaid EI premiums in 2015, must file a refund application by December 31, 2018 to reclaim these amounts. Employers generally have four years to file refund applications for overpaid CPP contributions, and three years to apply for a refund for overpaid EI premiums.

Some employers may have overpaid contributions where they remitted amounts related to certain payments and benefits that are excluded from the calculations of CPP contributions and EI premiums, or amounts that exceed the maximum insurable earnings or pensionable earnings.

Background
In general, employers that have overpaid amounts related to the current year should adjust their payroll records, and not include these amounts in the refund application for overpayments of CPP and EI. For overpayments related to prior calendar years, a taxpayer can file a refund application to the CRA within the following time frame:

  • CPP contributions - No later than four years from the end of the year in which the overpayment occurred
  • EI premiums - No later than three years from the end of the year in which the overpayment occurred
  • Overpayments refundable due to a CRA or court decision - No later than 30 days after the decision is communicated to the employer or the employee.

Employers should only include their own portion of overpaid EI premiums or CPP contributions in a refund application (and not the employees' portion). In certain circumstances where an employee has also overpaid EI premiums or CPP contributions, the employer may have to issue an amended T4 to the employee for the applicable taxation years. Where the employer issues an amended T4, the employee will then have to adjust their previously filed tax returns based on the revised T4, which will then trigger a refund of the overpaid EI premiums or CPP contributions.

For more information, contact your KPMG adviser.

Information is current to November 13, 2018. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500
 

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