Ok so the situation I am currently in is as follows
Mid year 2020, I got approved for CPP Disability and I am already on the Provincial Disability benefits. I received a call from CPP-D once the decision was made. The person that called me covered the basics and adivsed me that CPP-D is taxable BUT, he stated that he had ALREADY issued the lump sum back pay to Provincial Disability WITHOUT any taxes being deducted.
Currently, after a prelim write up on my taxes, I NOW OWE the government nearly $2000 in taxes due to this (2 1/2 years back pay = $24000), and i DO have the Disability Tax Credit which reduces it to $365 (something I STILL cant afford to pay on my current income). So far, I cant even get through to the CRA to see whats up (the ususal “we are too busy”… click) and I’m looking for better advise than “just pay it” that I’ve been getting so far. I feel that BECAUSE I was never given an option to be taxed that this is somehow not legal but, I’m no tax professional or legal expert. I’ve read thru other stories here and it seems like the CRA can split it up for each year but what do I need to provide for this to happen? Does the CRA already have this info? Like the per year breakdown in the official decision once I was approved? What form (if any) i should request to fill out etc etc…
Can anyone provide me with info on what to do here please? Thank you in advance as well
Sorry for not replying sooner.
I think you can get the taxes adjusted so the back pay is taxed in the years it should have been for.
You can also do a payment plan.
I think you need to talk someone at the cra.
I was approved for ccpd and they retro back 5 years of a lump sum payment of 50,000 taxable dollars that went directly to my ltd provider ,and I am on the hook for paying the tax on it.
Everything I’ve read states the maximum retro backpay is 12 months prior to application date plus however long it takes CPP-D to approve your application. Can someone clarify how some people are able to get multiple years of CPP-D retro backpay?
This is what my understanding is…11 months or even years.
Is CPPD retroactive?
What is the CPP disability retroactive benefit? The CPP disability retroactive benefit is a one-time payment you get shortly after you get CPP disability benefits. This payment represents several months (or even years) of past CPP disability payments that you were eligible for before your application was approved.
Maybe an initial denial that got backdated? Either way you should be able to get the payment split into different taxable years which will reduce the taxes for most people.
