How to correct errors in T4 tax slip

"The burden of proof is often on the taxpayer to demonstrate an error in the CRA assessment/reassessment." - The CRA.

During 2023, CPAs across Canada were canvassed to pose the top questions they have for the CRA. One of them was about issued on T4s and other T-Slips:

CPAs have indicated that they are seeing situations where CRA assessors and even Appeals Officers are basing decisions on issued T-Slips without considering the possibility that the issuer made errors in their preparation. In a recent Federal Court decision (https://www.canlii.org/en/ca/fct/doc/2023/2023fc548/2023fc548.html), the failure to consider the possibility that a slip was erroneous was cited in determining that CRA had made an unreasonable decision, resulting in granting Judicial Review. Members indicated that they have also seen situations where T4RSP and T4RIF slips for deemed dispositions on death are mistakenly issued to beneficiaries or executors who remain very much alive. What messaging does the CRA provide to its agents regarding challenges to the accuracy of such reporting slips? While the ideal resolution would be an amendment by the issuer, not all issuers are prepared to undertake such amendments.

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The CRA's response

The Canada Revenue Agency (CRA) understands mistakes may be made when T-slips are prepared. As stated in the recent Federal Court decision (https://www.canlii.org/en/ca/fct/doc/2023/2023fc548/2023fc548.html), it is not the CRA's duty to determine there was an error on a T-slip. The onus is on the taxpayer, who knows their individual situation, to review their T-slips and to take corrective action, as discussed below, if they discover an error.

If you discover an error

As it relates to payroll, if a taxpayer believes that an error has been made with respect to their employment slip or believes that the issuer has failed to file the required information return, the employee should first contact the filer/issuer to attempt to discuss and resolve the issue.

If the employee is still unable to resolve the situation, they have the option of filing an employee complaint. Once received, the CRA will investigate and take action to resolve the situation. If there is sufficient evidence to support the employee complaint, the CRA will take the necessary steps to have the errors corrected. In instances where the filer believes that they have made a reporting or filling error, they must submit an amendment to correct the error.

Taxpayer responsibilities

When an information slip is issued, it is sent to the taxpayer and CRA. It is part of the taxpayer responsibilities to verify the validity and the accuracy of the information slip, and if the taxpayer notices an error on the slip, it is expected that the taxpayer will contact the issuer and ask for an amended slip. The CRA cannot validate the accuracy of a slip since the relevant information to do so is retained by the issuer and the taxpayer.

If your employer does not want to correct your T4

The issuer must have a valid reason to deny a correction request from the taxpayer. When denied without valid reason, the taxpayer can inform CRA by filing an employee complaint with the employer accounts and services section. The validity of the information slip is a shared responsibility between the issuer of the slip and the taxpayer. CRA only matches the information on the slips and the income tax return from both parties and when it doesn’t, it requires information from the issuer, the taxpayer or both. In other words, CRA become involves when the CRA notices a discrepancy or when they are notified that the issuer doesn’t comply.

Where a taxpayer believes that an error has been made and is unaware of the process to follow to resolve the issue, they should consult the CRA website, or contact the Business enquiries or Individual enquiries line based on the circumstances of the error.