It’s tax time, and I’ve been getting lots of questions from doctors about their T4A slips.
Each year the British Columbia Medical Association (BCMA) issues T4A slips to physicians who have participated in the benefit programs administered by the BCMA.
These benefit programs include:
- Continuing Medical Education (CME) Benefit
- Canadian Medical Protective Association (CMPA) Rebate
- Physician’s Disability Insurance (PDI)
- Parental Leave Program (PLP)
- Contributory Professional Retirement Savings Plan (CPRSP)
The T4A will show an amount in Box 28 – Other Income which you must report in your personal income tax return. The reverse side of the T4A has a breakdown of the amounts reported for each program that you participated in.
The T4A slip can be reported in two ways.
Generally, items reported in Box 28 are reported on Line 130 – Other Income in your personal income tax return. This is appropriate if your medical income is being reported in your corporation and you are not reporting self employment income on your tax return.
If you are unincorporated, you will be reporting your medical income on Form T2125 – Statement of Business or Professional Activities. You can include the amount of the T4A in your gross professional fees earned.
The advantage of reporting the T4A as professional income is that it qualifies as earned income for the calculation of your RRSP deduction limit. Items reported on Line 130 of the tax return have no impact on your RRSP deduction calculation.
The downside is that you will probably receive a telephone call from the Canada Revenue Agency (CRA) asking why you didn’t report the T4A, and you will then need to provide proof that the T4A amount was included in your professional income. CRA matches all information slips with tax returns to ensure that all amounts have been reported. By entering the amount on Line 130, it is obvious to CRA that you have reported the amount.
Some practitioners report the income on Line 104 – Other Employment Income in an attempt to treat it as earned income for the RRSP deduction limit calculation. CRA has been reclassifying these amounts to Line 130 during its slip matching process.
It is very important that you report the T4A on your income tax return or provide it to your accountant when they are preparing your income tax return. The penalties for not reporting a slip are very severe.
If you fail to report income in a tax return for a given year and have also also failed to report income in a tax return for any of the three preceding years, a penalty of 20% of the amount of income not reported in the current year will be imposed. It is your responsibility to report this income, even if you did not know you were going to have a T4A slip. If you are using an accountant who does not deal with many doctors, they also may be unaware that you will have to report this benefit.
If you have not received your T4A, you can download it from your BCMA account. You will not receive a T4A if you didn’t participate in any of the programs, or the benefits were paid to your corporation.
One final thing to be aware of is double counting income. I have many clients that simply give me the total of the deposits their bank account as their professional income. Often this total includes deposits received from the BCMA for CMPA, CME and PLP (cash is not received for the CPRSP and PDI benefits.) If the T4A is reported and the deposits are not reviewed, it is possible that income will be overstated by the cash benefits received. An accountant not familiar with physicians will not be aware of this potential problem.
Please feel free to leave a comment or contact me directly if you have any questions.
Hi John, thanks so much for your post. I’m a new grad and have income from 3 sources: Locum Fees for services, Ministry of Health Billings and Fees for Uninsured Health Related Services (much less than $30,000 so not GST/HST worthy). On my return, do I report the sum of all of these as my gross professional fees and then also report the individuals amounts under the respective categories of “Fees for Services” (T4A box 048 from the physician I’m covering for) and “Other Income” (where I will list income from the ministry of health billings and fees for uninsured health related services)? Just want to make sure I’m not double reporting. Thanks very much! – FS
All 3 categories of income are part of your gross professional fees reported on the T2125. You will be double counting the income if you also record it as other income, etc. If you are using tax preparation software, most programs have the option to add the amount in T4A box 48 to the T2125. None should be reported as other income on the tax return (unless you also get a T4A listing it as Box 28 -other income), as it is all self-employment income.
I am an optometrist with a corporation and an associate who is also incorporated. Do I need to issue a t4A to the associate? His accountant is asking for one. I’ve never received one in the past when I was an associate.
Hi Liam. Currently, you do not need to prepare a T4A slip for your associate. CRA changed the design of the T4A several years ago to introduce Box 048 for reporting “fees for service” which would include associate fees, locums, etc. However, as per the current CRA T4A guide RC4157, the CRA is not currently assessing penalties for failures relating to the completion of Box 048.
I don’t currently prepare T4A slips for any of my medical, dental or optometrist clients with associates, but I expect that will change in the future. I think it is only a matter of time until CRA enforces the completion of Box 048. Fortunately, that time has not yet come.
I have a professional income in the movie industry. Last year made ~ 35K and CRA registered me for HST. I was wondering if the T4A I got this year includes HST or is it specific to my professional income, pre-tax? I did not keep track of my pay stub and do not know if all the payments add up to the T4A? And I have other union deduction.
Long story shot, is HST allowed to be part of T4A?
The T4A amount should be before GST/HST.
CRA would have set you up for HST because you exceeded the small supplier threshold of $30,000.
The question is, were you being paid HST in 2012? Did the company you were working for know that you had to be charging HST? If not, you will need to invoice them for the HST so that you can remit to the government with your 2012 HST return.
I want to fill up other income on T4A slip, but I can’t find the box. Could you please tell me which one is the box 28?
There are only a few prenumbered boxes on the T4A slips – you fill in the empty boxes with the numbers you need. Additional information is available on the CRA website.
sorry for my typing. big fingers on a small phone. good thing i’m not a surgeon!
it’s nice to see that someone knows what they are doing. i’ll probably comm see you next year, but it’s too late for me this year. i already got nailed for the missing bcma slip last year, nobody checked except the tax department, and i realized i forgot it again when i picked up my tax return from the accountant this year. i though bcma mails them, but i had to downlaod it.