Tag Archives: tax

Government rushing Phoenix damages payment without tax ruling

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Send a letter to Minister Jean-Yves Duclos and Minister Anita Anand that Phoenix damages shouldn’t be taxed.

The Liberal government has shamelessly chosen the 5th anniversary of the Phoenix pay system disaster to short-change thousands of PSAC members on their compensation for years of pay problems.

Even though PSAC is in the process of working with CRA to review the taxability of Phoenix damages, the federal government has confirmed that it intends to ignore these efforts and issue the up to $2,500 for our members, on March 3 – with taxes deducted. Treasury board provided no explanation for their actions.

“The government still has time to do the right thing,” said PSAC National President Chris Aylward.  “General damages should not be taxed, so we’re calling on key ministers to immediately intervene to fix this before payments are issued.”

The $2,500 settlement, even if taxed, is still greater than the five days of leave offered to PSAC members, but it represents a violation of the language we negotiated into the agreement. PSAC maintains that general damages paid to all employees for ‘stress, aggravation, pain and suffering’ and for the late implementation of collective agreements are non-taxable, as CRA has acknowledged other specific damages in the settlement should be treated.

“It’s a slap in the face to the tens of thousands of PSAC members who suffered years of pay problems, and then worked non-stop during this pandemic to deliver aid and benefits to millions of Canadians in crisis,” said PSAC National President Chris Aylward.

PSAC will pursue every legal route to secure the full compensation that our members are entitled to. This includes tax challenges that would retroactively see our members reimbursed should the payments be issued as planned on March 3, but our goal remains to avoid any time-consuming and complex tax disputes for our members.

“Phoenix short-changed PSAC members for years – the last thing they deserve is for the government to short-change them again,” added Aylward.

PSAC will continue to work to resolve this problem and updates will follow in the coming days.

The original version of this article was first posted on the PSAC website.

Get reimbursed for Phoenix-related tax issues

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As the tax filing deadline quickly approaches, we know that Phoenix has made tax season extra stressful for many public service workers. PSAC has long-secured measures to help alleviate some of the tax-related financial losses caused by Phoenix pay problems.

Frequently Asked Questions: 2018 Tax Implications of Phoenix payroll issues

Reimbursement for tax advice

Public service workers impacted by Phoenix can reach out to tax experts to help determine if there are errors on their T4s and determine whether there are tax implications for those errors. Members can be reimbursed for this tax advice up to $200 per year (taxes included).

To file a claim, complete this online form.

More information can be found at Claims for expenses and financial losses due to Phoenix: reimbursement for tax advice.

Claim for impacts to income taxes and government benefits

Those who have been impacted by Phoenix may also be facing financial loss due to the incorrect reporting of their salaries. Often this is due to:

  • overpayments put an individual into a higher tax bracket, causing them to owe more in income taxes, or
  • the increased income caused an individual to be ineligible, or eligible for less, government benefits and credits such as the Canada child benefit.

To find out if you are eligible to be reimbursed for these types of financial losses, go to Claims for expenses and financial losses due to Phoenix: Claim for impacts to income taxes and government benefits.

Claim out-of-pocket expenses

Anyone who has been financially impacted by Phoenix, tax-related or not, may also be eligible to claim out-of-pocket expenses. Out-of-pocket expenses include things like penalty fees, interest charges, or NSF (non-sufficient funds) charges.

Visit Additional Financial Expenses Incurred Because of Phoenix Pay System Errors to get more information and fill out the claim form.

The original version of this article was first posted on the PSAC website.

Phoenix and Tax Implications

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As tax season approaches, many PSAC members are concerned about the effects of Phoenix pay problems on their taxes.

If you have questions about the tax implications of an overpayment or underpayment, or about your T4, here are two useful links:

This article was originally published on the PSAC website.