T4 and RL-1 Production for property managers

The production of T4 and RL-1 forms is among the many tasks for which property managers are responsible at the end of the year.

This is a legal obligation to declare income and withholdings for employees.

We provide further details and the necessary resources to assist you in the process of producing T4 and RL-1 forms.

Understanding T4 and RL-1 in Property Management

In Quebec, the T4 and RL-1 forms are mandatory tax documents used to report wages.

The T4 is intended for the Canada Revenue Agency. It summarizes employees’ income and tax withholdings, including payments to subcontractors in certain cases. For managers, this means ensuring an accurate declaration of income and expenses related to the workforce.

The RL-1, on the other hand, is required by the provincial government. It also summarizes employees’ income and tax withholdings. However, since the federal and provincial governments have different definitions of taxable income, the amounts reported on the two forms may differ.

Information to be Declared

The information to be declared on the T4 and RL-1 forms is similar:

  • Employment income: The T4 form must report the total employment income before deductions, including salaries, tips, bonuses, vacation pay, commissions, and other types of compensation.
  • Taxable benefits and allowances: All taxable benefits or allowances provided by the employer must be included.
  • Retirement allowances: This includes pensions, salaries in lieu of Notice of Termination of Employment, severance benefits, and other payments.
  • Contributions to the Canada Pension Plan (CPP): Amounts deducted for CPP or Quebec Pension Plan (QPP) contributions must be reported.
  • Employment Insurance (EI) premiums: Deducted EI premiums must also be included in the T4.
  • Income tax : The total income tax withheld on payments during the fiscal year.
  • Other remuneration: Any other type of remuneration, including payments from an income replacement plan in case of salary loss, must be declared.

Deadline for Form Submission

Managers must submit the T4 before February 28 and the RL-1 before the last day of February.

You must meet these deadlines to avoid penalties. Diligent management of these documents ensures not only compliance with legal obligations, but also transparency and efficiency in property management.

Tips for the T4 Form Production

Here are some essential elements for an efficient and tax-compliant production:

  • Gather all necessary information, including income and tax withholdings for each employee and subcontractor.
  • Ensure that the entered data is accurate to avoid tax errors.
  • Submit T4 forms before the deadline: February 28.

Find out if you need to produce T4 forms by checking the information provided by the Government of Canada: Employer’s Guide on how to produce the T4.

Frequently Asked Questions Regarding T4 Production

You should fill out a T4 form if you are an employer (resident or non-resident) and have paid your employees employment income, commissions, taxable allowances and benefits, fishing income, or any other compensation.

Income such as salary, tips, bonuses, vacation pay, employment commissions, gross earnings, and any other compensation paid to employees during the year.

As an employer, you are required to automatically deduct income tax each time you pay your employees. You must provide T4 forms to all employees for the previous year by the end of February.

T4 and T4A forms must be distributed and filed no later than the last day of February following the calendar year to which they apply. Employers may face penalties for late submission, which could reach up to $7,500.

Tips for RL-1 Form Production

The RL-1 is required by the provincial government.

  • Ensure that all income and deductions are accurately reported.
  • Follow provincial tax guidelines to avoid any error or omission.
  • The RL-1 must be submitted before the last day of February. Good planning and early verification are crucial to meet this deadline.

Feel free to visit the Revenu Quebec website to determine if you have to file an RL-1 slip.

Frequently Asked Questions for RL-1 Production

Employers must file a RL-1 if they have paid salaries, gratuities, tips, fees, scholarships, or commissions as an employer or payer.

The RL-1 must be completed to report wages or salaries and any other compensation paid to a current, past, or future employee, as well as taxable benefits granted to an individual as a shareholder or member of a partnership.

Errors to Avoid

During the preparation of T4 and RL-1 forms, some common errors can occur

To avoid them:

  • Input errors: Thoroughly check the numbers and information to prevent any inaccuracies.
  • Declarations omission: Ensure all rental income and other relevant transactions are included.
  • Lack of awareness of deadlines: Adhere to deadlines (T4 before February 28, RL-1 before the last day of February) to avoid penalties.

Real Estate Management Software for Tax Form Production

Our software assists you in your year-end tax season preparation and allows you to be more efficient in producing various statements required by government authorities, such as T4, RL-1 and RL-31 slips.

Our software suite undergoes an annual government certification process regarding the production of employment tax statements like RL-1, T4, and T4A. Your Hopem software will allow you to generate an XML file that can be transmitted to the government.

To discover how we can help optimize your property management, contact us now.