The Canada Revenue Agency (CRA) is requiring all eligible businesses, partnerships, non-profits, charities and sole proprietors with a payroll account to complete and submit Form PD27 (10% Temporary Wage Subsidy (TWS) Self-identification Form for Employers) indicating how they have applied the 10% TWS. This applies if:
- Remittances were already reduced;
- Remittances are intended to be reduced at year-end; or
- The Canada Emergency Wage Subsidy (CEWS) was claimed in the year and, as a result, need to confirm on Form PD27 the amount of the TWS you are taking advantage of (refer to Line F of your CEWS application).
Form PD27 Due Before Filing of T4s
CRA has indicated that the PD27 must be processed by them before the TWS credits claimed by the employer will be posted to the source deduction account. Consequently, the PD27 needs to be filed before the T4s are filed as it informs CRA of the discrepancy between the remitted amounts during the year and the tax deductions reported on the T4s. Failure to do so may trigger a Pensionable and Insurable Earnings Review (PIER) by CRA.
Part D of Form PD27 requires the employer to provide details of the calculated wage subsidy, and also provides a box for written comments to provide further details not included in the calculations. CRA will use this form to verify the TWS claimed as well as reconcile to the CEWS claimed, if applicable. Eligible employers who only claimed the CEWS are still required to file Form PD27, indicating in the comment box the lower percentage claimed.
Claiming the TWS
If you have not yet reduced your remittances with the TWS, you can still calculate and apply for the subsidy using the Form PD27. Employers should indicate in the Additional Comments section of the Form how they would like to apply the subsidy. The three options are:
- Reduce the income tax portion of their future 2020 remittances, up to the total eligible TWS amount;
- Request that the CRA pay the total eligible TWS amount to them; or
- Request that the CRA transfer the total eligible TWS amount to the next year’s account (the CRA will do this after it has processed the next year’s T4 information return).
Completing Form PD27
For each pay period identified on the form, the employer will need to provide the following information:
- Gross remuneration per pay period
- Income tax deducted
- CPP contribution (both employer and employee portions)
- EI premiums (both employer and employee portion)
- Wage subsidy claimed in dollars
- Wage subsidy claimed as a percentage
- An explanation as to which remittance(s) was reduced. If the full TWS has not been claimed an explanation of how the employer intends to reduce subsequent remittances, seek a refund, or state its intention to file only under the CEWS program.
The self-identification form can be submitted online, by mail or fax. Online submissions are filed through CRA My Business Account. For more information on Form PD27 or assistance with completing and filing the Form, please contact your trusted Welch advisor.