Here are the latest changes included in the 2021 Year-End Tax Update, Avanti Version 9.45.
You can apply this update anytime before running your 2020 year-end and processing your first pay of 2021, as the tax updates don’t apply until you’ve run your year-end. See Install the 2021 Avanti Tax Update for more details.
2021 CRA Tax Changes
9.45 includes changes for the CRA 113th tax update. To review the new rates and values visit 2021 Source Deductions, Rates, and Payroll Changes.
Some values will automatically update when you Initialize Employee Totals after installing 9.45.
For everything you need to know for a successful year-end, please refer to our Year-End Checklist.
New Federal/Provincial TD1 & 2020 Quebec TP-1015.3-V Values - You can update the employee TD1s and TP 1015.3V values to the indexed amount or zero. For more information, go to Initialize Employee Totals.
Canada/Quebec Pension Plan - If 2020 values were previously indicated these will automatically update to the 2021 values. Please review to ensure they are correct, go to Verifying CPP and QPP Rates for more information.
Employment Insurance & Quebec Parental Insurance Plan - You must update the Reduced EI Employer factor(s) yourself. Regular EI and QPIP automatically update to the 2021 values if the 2020 values were indicated. Go to Verify the New EI Rate and Update EI Reduced Rates for more information.
Worker’s Compensation Rates- You must update the maximum assessable earnings and rates for 2021 yourself. Go to Update WCB Rates and Maximum Assessable Earnings for more information.
Minimum Wage Changes - Recently, some provinces have increased their minimum wages. These will automatically update if the old minimum wage is indicated. Go to Minimum Wage Changes in 9.45 for more information on reviewing minimum wage.
Federal/Provincial Tax Rates and Annual Taxable Income Thresholds - The new tax rates will be used for pays with a payment date of January 1, 2021 or later.
Initialize Employee Totals - Basic Personal Amount
There are two maximums for the Basic Personal Amount on the Federal, Nova Scotia, and Yukon TD1s, based on the employee's annual salary.
During Initialize Employee Totals, this will be set to:
The new maximum based on your employee’s 2020 amount if you select Set employee Federal and Provincial 2020 tax factors to 2021 values during initialization.
The new maximum based on your settings, if you select Set employee Federal and Provincial 2020 tax factors to zero during initialization.
For more information, go to 2021 Basic Personal Amount for Federal, Nova Scotia and Yukon TD1s.
Changes To Tax Slip Boxes (Waiting for 9.45 changes)
T4 Tax Slip Changes
Codes 57 to 60 Added: Report income and non-cash taxable benefits during the federal COVID-19 response from March 15 to September 26, 2020. You must include these codes on your T4s, regardless of whether you participated in the programs. Go to T4 Changes for Federal COVID-19 Response for more information.
T4A Tax Slip Changes
Code 37 Added – Advanced life deferred annuity purchase
If the annuity payments are deferred until the end of the year the annuitant turns 85, enter code 37 for the T4A tax slip on the T-Slips tab of the code or enter the amount in box 37 in Modify Employee Tax Slip Data.
Code 200 Added – Provincial/Territorial COVID-19 financial assistance payments
To include certain amounts that a provincial or territorial government paid for COVID-19 assistance, enter code 200 for the T4A tax slip on the T-Slips tab of the code or enter the amount in box 200 in Modify Employee Tax Slip Data.
The source of RL-2 amounts will now be included when the transmitter file is created in Generate RL-2 XML Data. Previously, if the source was AUTRE, it didn't need to be included.
T4A-RCA and T2200 Not Available
At this time, the 2020 changes for some tax slips aren’t finalized. Once they are, we’ll let you know whether a new version of Avanti needs to be applied, and when the new version will be available.
Detailed Information on Creating Tax Slips
Here are some links to help you complete and file your 2020 tax slips:
For T4 information, go to RC4120- Employers’ Guide - Filing the T4 Slip and Summary.
For T4A information, go to RC4157- Deducting Income Tax on Pension and Other Income, and Filing the T4A Slip and Summary.
For RL-1 information, go to RL-1.g-v Guide for Filing the RL-1 Slip – Employment and Other Income.
For RL-2 information, go to RL-2.g-v Guide for Filing the RL-2 Slip – Retirement and Annuity Income.
For NR4 Slip information, go to T4061- NR4 – Non-Resident Tax Withholding, Remitting, and Reporting.
For T4A-RCA information, go to T4041- Retirement Compensation Arrangements Guide.
If you an On-Premise Client looking for more information on updating Avanti, please go to the Avanti Software Update Installation Guide.
Don’t want to manage your own updates? Please contact your client success manager; they can help guide you through any questions. If you are unsure who your client success manager is, Client Care is happy to help! You can reach us at Care@Avanti.ca.