T4A Recieved for 2019 after CPPd approval last year

CPP Disability
1

I received CPPD last spring with a large retro payment over 20k for to my predisability income and length of time back to 2017.

I repaid the insurer the overpayment. Now I have this T4A looking to apply over 33kin income into the last taxation year. Is there a way to soften this? I’m freaked thinking I’m going to be paying 1000s for 2019 AND lose my medical compassion pricing as it’s over 25k

Anywhere you can direct me would be really appreciated. Plus, I need to know how to get taxes taken off my CPP-D so I don’t run into taxes owed on coming years.

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When you submit a tax return you’ll have to include the entire amount in the year you received it. In this case 2019. Attach all the forms on retroactive payment and yearly breakdown that you received from Service Canada when you submit your taxes!!! So CRA knows this amount is from retro pay. CRA will then apply some amounts to previous years or leave it in the current year. They will do what’s beneficial for you so you don’t pay much tax on it. Also you could’ve put some of retro pay into your RRSP in 2019. That would’ve reduced the tax amount.

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I think you can do this online now.
My https://www.canada.ca/en/employment-social-development/services/my-account.html
If not, call them.

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As always, Elaine says it best! I would just add that this a well known issue within Revenue Canada so just make sure you point it out to them and they will spread it over proper taxation years.

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Thank you so much David!

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Also if you hired a lawyer you can subtract lawyer fees as an expense on your tax return. It will reduce your total taxable income.

Make sure you submit all the forms and receipts that you received from Service Canada with your tax return!!! CRA will adjust everything for you.

If you have questions you can always call CRA. They are always very helpful.

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Just wanted to add. For the CPPD lump sump payment you cannot submit the tax return online. You can prepare it using a software and print it out. Then it has to be sent by mail along with the letters from Service Canada to your nearest CRA office.

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Yes! Not all people or even lawyers know this. When we do this for clients we prepare a declaration sworn by the lawyer that attaches the legal fee invoice (marked paid) and certifies the facts that show the lump sum settlement meets Revenue Canada’s requirements to allow legal fees to be claimed as an expense.

Without the declaration from the lawyer you may run into problems proving the invoice is real or that your situation meets the requirements for writing off legal fees.