Which years will they apply the lump sum tax payment too?

Hey everyone. I know there’s lots of threads on this. But I have a question that I can’t find the answer too.

So I finally got approved and got the lump sum. I’d like to not pay tax on it.

However. There’s a provincial program that I’m going to apply for that provides benefits based on income of previous years.

So, my question basically is when they retroactively apply the taxes, does anyone know if they spread it out over the years it was earned, just stick it in whatever year it fits in, or can I tell them.

Also, just confirming that I just have to call them to make this all happen as well.

Thanks for all the help you all provide.


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I suggest you call service Canada and discuss your issue. Look up form T1198 on the CRA website. In my case, I was able to distribute the lump sum and the disability tax credit was also useful in terms of the low income program access

I’m assuming you are referring to the CPP lump-sum payout you receive once you’ve been approved?

If so, then you just put the amounts received on your T4AP slip accordingly on your tax return. Because of the box # it is in for Lump-sum Payment on your T4AP slip, once cra receives the tax return it will be flagged because of the amount included from the box # on the T4AP slip. They will then apply the breakdown to the applicable tax years.
So bottom line, put it on your tax return and cra automatically takes care of the rest.