Cra lump sum payment for 5 year back pay

Hi everyone,

I am also frustrated with cra. I was told by my accountant that my cpp disability that covered 4 years back pay could be placed according to the payment for each year.
Partial payment 2012
full year 2013
full year 2014
full year 2015

full year 2016

but then cra said I could not do this, but my accountant is standing by her work and it could be done. cra wants to take full amount in one tax season which will mean I owe 12000.00 my husband and I cannot afford this since I had no income from 2012 to 2016 and the monies went to debt. please someone tell me what I need to do or if my accountant is right or cra is right or do I need to hire a lawyer

Joanne does a great explanation on this post

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Hello Allyoops
I was in the very same situation and had the same concerns, however, CRA does not tax twice so they need to be informed and there is a area on your taxes that will inform them or call them. I have a tax person that looks after that for me. Because I already paid taxes like you I did not have to pay again.
But I do understand your concerns. Good luck going forward!

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Did CRA tell you that?

I think you can use the form that CPP sent you and apply each amount by the year they mentioned. If you had no income on those years then you’ll probably pay no tax.

I would call CRA if I was you.

I did and yes that is what they told me. I did not have any income

my accountant told me she would look into it. I am tired of the one that least can afford cra and taxes are the ones that they pick on. I hope my accountant can take care of it but if not. should I be speaking to a lawyer

I would call CRA again and ask to talk to a specialist. My guess is you talked to a customer service rep who is not quite familiar with CPP-D payments.

Other thing you can do is to submit your taxes the way your accountant proposed. You’ll see what the response from CRA will be. It should be reviewed by a CRA specialist who knows how it works.

i will give this message to my accountant

\thank you

I just called CRA as I am going to receive CPPD lump sum soon.

They told me to submit all the amounts in the year it was received. Then CRA will review it and adjust the amount to the previous years with the less income so you don’t have to pay much tax. For that to work you have to submit tax returns for previous years not including your CPPD lump sum. They asked NOT to do it ourselves. Just put the whole amount in the year received.

For example, I will submit the whole amount with my tax return for the year 2018. But the payments are for 2016, 2017 and 2018. CRA will see which years I had less income and will adjust the amount to those years. They will calculate it so it will be beneficial for me and I’ll pay less tax.