As you work on your calendar year-end for 2020, you’re likely to come across the requirement to complete a Form PD27. If you’re getting confused with how to fill out the sections, don’t worry. We’ve gathered as much information as we could to help you complete it.
But first, some context — the 10% Temporary Wage Subsidy for employers in a nutshell.
In response to the pandemic, the Canadian government introduced the 10% Temporary Wage Subsidy (TWS) as a source of financial relief for small business owners.
Through the TWS, eligible employers could reduce their federal and provincial tax remittance by 10% of their gross remuneration paid during the claim period of March 18 to June 19, 2020. The maximum that can be claimed is $1,375 for each employee, up to $25,000 per employer.
Since the TWS is considered to be income, all small business owners who’ve benefited from the program must include it in their year-end reporting. Even if you’re retroactively applying for the subsidies but haven’t received it yet, it still needs to be accrued for in the period that it falls within.
What is Form PD27 and who needs to submit one?
If you took advantage of the Temporary Wage Subsidy, you’ll need to fill out Form PD27 10% Temporary Wage Subsidy Self-Identification Form for Employers to self-report your eligibility for the program. This form lets CRA properly document the reduction in remittances on your payroll program account and reduces your potential of receiving a discrepancy notice at the end of the year.
Form PD27 is a three-page form with five parts:
Parts A and B — This is where you provide information to identify your business.
Part C — This section must be completed if you have more than one payroll account number (RP) and have claimed (or intend to claim) the TWS on more than one of these accounts.
Part D — This is where you enter your TWS claim amounts. (We’ll do a deeper dive in the next section.)
Part E — This is where the employer or an authorized officer of the company must provide their signature to certify and attest that the information provided in the report is valid.
You need to complete and submit Form PD27 if:
You are eligible for TWS and
You already reduced your remittances.
You intend to reduced your remittances (the PD27 will help calculate your eligible TWS amount)
You claimed the Canada Emergency Wage Subsidy (CEWS) and, need to confirm the amount of the TWS you are taking advantage of in relation to CEWS.
If you weren’t eligible for TWS:
Form PD27 will be used to reconcile the subsidy on your payroll program (RP) account(s). For the full article, click here.