Canada Dental Benefit: What employers need to know about changes to T4/T4A reporting
Canada Dental Benefit: What employers need to know about changes to T4/T4A reporting
Starting in 2023, the Canada Revenue Agency will request information from employers on dental coverage provided to their employees to help confirm eligibility for the Canada Dental Benefit.
Employers must indicate whether the employee or any of their family members were eligible for dental care insurance or dental services coverage of any kind on December 31, 2023, when filing the 2023 T4.
Similar requirements apply to payers required to issue T4A slips.
The Canada Dental Benefit aims to provide financial support for children’s dental care. It applies to families with children under 12 and an annual household income of less than $90,000.
To be eligible, parents must attest that their children did not have access to a private dental plan. Children covered by a private insurance plan, such as employee benefits, are not eligible for the Canada Dental Benefit.
To help administer this program, the Canada Revenue Agency will request information from employers on dental coverage provided to their employees. This reporting begins with the 2023 calendar year. This information is necessary to confirm whether applicants are eligible for the new dental care plan.
What does this mean for your business?
T4 reporting
When filing the 2023 T4, employers must indicate whether the employee or any of their family members were eligible to access dental care insurance or dental services coverage of any kind on December 31, 2023.
For both T4s and T4As (discussed below):
This reporting is not on an employee’s family situation or what coverage an employee enrolled in. It is on the level of coverage the employee was offered and could have benefitted from on December 31 of that calendar year.
Employers must disclose this information on new Box 45, indicating what category of coverage the employee had access to.
The categories are as follows:
| Code | Access |
|---|---|
| 1 | Not eligible to access any dental care insurance or coverage of dental services of any kind |
| 2 | Payee only |
| 3 | Payee, spouse, and dependent children |
| 4 | Payee and their spouse |
| 5 | Payee and their dependent children |
To reduce the burden on employers for 2023 only, employers need not complete Box 45 if Code 1 applies to the employee (i.e., they had no access to coverage of any kind).
This is strictly an administrative policy. It applies only if the employer has made all reasonable efforts to meet the reporting requirements. Employers that file T4 slips for calendar 2023 before January 1, 2024, do not have to file amended slips to report the code after this date.
T4A reporting
Similar requirements apply to payers required to issue T4A slips. These identify other sources of income, such as self-employed commissions, pensions, and annuities.
Payers that report an amount in Box 16 for an individual (pension or superannuation payments) must also complete the new Box 15. This is to indicate whether the recipient or family members had access to dental services plans or coverage. The categories are the same as those for T4 reporting.
If there is no amount to report in Box 16, then reporting is optional for Box 15.
Contact your payroll service provider with any questions or concerns about these new reporting obligations.
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