CRA can't seem to understand how to apply a lump sum LTD retro payment to previous years?!

CRA is making me insane…when I filed my 2018 return, I included the form and request for a special tax calculation, to apply amounts from my LTD retro lump sum payment to the previous years they were meant to be received in. A small amount of the retro payment was for early 2018, but the majority was for the 2 preceding years (nicely itemized by my insurer as to how much should be applied to which tax year.)

On my initial assessment, CRA did an adjustment for my CPPD lump sum retro payment automatically (a much smaller amount, which had been approved some time after my LTD was finally approved and paid out.) But they did not do the adjustment for the LTD lump sum, and therefore put it all on the 2018 year, creating a significant debt.

The CPPD retro amount was paid directly to me, as when I had applied for it, I had been denied my initial LTD application and therefore couldn’t list them on the form to have it sent to them straight from CPPD. Not sure if this matters for this issue, just clarifying.

I have requested 3 more times for an adjustment. I do not owe, nor can I afford, the CRA debt. Finally a reassessment was done, in progress for the better part of a month, and then I get a letter stating that no adjustment was needed, as it was done at the initial time of assessment. NO IT F*CKING WAS NOT. The small CPPD amount was properly allocated, they did NOTHING with the insurance company payout!

Am I missing something completely? Or are they being deliberately obtuse? I have zero issue paying a debt that I owe, but they are incorrect in what my true income has been. It is showing my income at almost double what it should have been. It could not have been made more clear on the request for adjustment form. Just wondering if anyone has had this problem?

It’s hard to say without seeing your tax return. Their should be some kind of explanation to that. CRA usually does all the adjustments correctly. Never had problems with them. They are quite professional.

If I have questions about my taxes I always call CRA. They connect me with somebody who specializes in a particular field. I called them so many times and they always took time to explain me everything in detail.

If I were you I would call CRA and talk to their tax specialist (not the person who is on the phone). And I would ask them to explain everything in detail on why they decided to leave the LTD lump sum in the year 2018. Believe me they will.

This is their contact number 1(800)959-8281