Canadian Tax Forms (T4, T4A, RL-1)

• I. Pre-Requisites of Creating Tax Forms 
  • What version number of Clarity should I be using? 
  • What is a business number? How can I verify what my business number is? Where can I edit my business number? 
  • How can I look at previous years' T4s? 
• II. Creating T4s, T4As, and RL-1s 
  • How many tax forms do I need to produce? 
  • Do I need to create tax forms for each payroll group? Do I need to create tax forms for each business number? 
  • I have an employee who didn't have income throughout the year, but still made contributions that was tracked outside of Clarity. How do I create a T4 for this employee? 
  • Can I create T4s in Clarity and also create additional T4s outside of Clarity? Do I have to upload both to the CRA? 
  • I am unable to create a tax form for an employee, even though I've already double-checked the tax form box assignments and have historical data for the employee. What's going on? 
• III. Editing T4, T4A, and RL-1 Slips and Summaries 
  • Is there a way that I can temporarily change the names of my employees to their legal names for the tax forms without changing their given names on the paystubs? 
  • I have more than six additional boxes to add into my tax form, but Clarity is only allowing six. How can I add additional boxes? 
  • Why are the amounts not going into the right boxes? Why are the amounts too low/high? 
  • How can I reconcile my tax forms? 
• IV. Printing and Emailing T4s, T4As, and RL-1s
  • Boxes 24 and 26 on my T4s appear, but why don't they get printed?
  • Why is my pension adjustment not printing on the supplementaries/slips? 
  • Why is there missing data in my T4 Summary when I try to print it? 
  • I can see my tax forms when editing the supplementaries and summaries, but I cannot see them under the 'Print' option. 
  • Can I email tax forms to terminated employees? 
  • How can I ensure that my RL-1s will print perfectly? 
  • How can I use the blank T4/T4A copies from the CRA website to print out my T4s and T4As? 
• V. Submitting T4s, T4As, and RL-1s to the Government 
  • Can I send my tax forms to the government by mail instead of electronically filing them? 
  • I got an error message when trying to create my XML file. What happened? 
  • I got an error message when trying to upload my XML file to the government website. What happened?
    
    
    

I. Pre-Requisites of Creating Tax Forms

What version number of Clarity should I be using?

We always recommend having the latest version of Clarity, no matter what you are doing. To confirm the version you are using, look at the bottom-left corner of Clarity. You can verify if you are using the latest version by logging into our customer portal at https://customer.paymatesoftware.com/ and see if there is a download available for a later version. 

What is a business number? How can I verify what my business number is? Where can I edit my business number?

"RCT number", "RP number", "Pension number", "EI group", "EI number", and "business number" all mean the same thing. A typical business number is 15 characters long and looks like this: 123456789RP0001.

If you want to confirm or change your business number, navigate to Configuration > Company > Company Edit > Canadian Taxation tab. The EI groups are on the top-left corner of the window. You can modify your number or add a new one (if this applies to you) by clicking the "Add EI Group" button. 

How can I look at previous years' T4s?

You can log into previous years to look at previous T4s. When you're selecting your company (or you can go to File > Select Company), select the previous year and log in. 

II. Creating T4s, T4As, and RL-1s

How many tax forms do I need to produce?

You must create tax forms for each employee, for each business number that your company has. For example, if you have two business numbers, you must create tax forms twice. 

Do I need to create tax forms for each payroll group? Do I need to create tax forms for each business number? 

You only need to create separate tax forms for each business number. 

I have an employee who didn't have income throughout the year, but still made contributions that was tracked outside of Clarity. How do I create a T4 for this employee?

You can manually create a T4 for this employee, if the employee has already been added into Clarity. To manually create a T4, navigate to Forms > T4 > Edit Supplementaries and click the "+" button to add a T4. Select the correct employee and save it. If you need to create a manual T4, please do this at the end, after all your other T4s (automatic ones) are created and verified to be accurate. If you recreate the T4s at any time, the manual T4 will be erased. Be sure that your employee is active first! 

Can I create T4s in Clarity and also create additional T4s outside of Clarity? Do I have to upload both to the CRA?

Clarity will only generate T4s for employees who exist in Clarity and have historical data. If you have employees that you pay outside of Clarity, you must also create T4s for them manually. You can submit them under different submission numbers when you submit them. 

I am unable to create a tax form for an employee, even though I've already double-checked the tax form box assignments and have historical data for the employee. What's going on?

If you are unable to create a tax form for an employee, despite having historical data for them and they are active in the system, restore your current company data into a sandbox company in order to run an integrity check. Follow these steps: 

1. In your existing company, navigate to Utilities > Backup. 
2. Create a backup of your existing company. Make a note of where the backup is stored and what the backup file name is. 
3. Navigate to File > Select Company.
4. Click "Add" to add a new company. 
5. Enter "SANDBOX" as the company short name. 
6. Enter all the required information. 
7. When you return to the company selection screen, highlight "SANDBOX" and click "Restore". 
8. Select the backup file that you created in step #2 above. 
9. Log into "SANDBOX". 
10. Navigate to Utilities > Integrity Check. Ensure that there are no issues with the integrity check. 
11. Navigate to Reports > Payroll Reports > Employee History > Employee History Detail. Ensure that there is nothing out of the ordinary in this report. 

If you are still unable to create a tax form for the employee, you can also manually create a T4 for the employee. However, if you would not like to do so, please contact our support team at support@paymatesoftware.com with your-six digit customer ID and a brief description of your problem. Please note that this may be a special case and may require our team to remotely connect to your computer to resolve the issue, which is a billable service. 

III. Editing T4, T4A, and RL-1 Slips and Summaries

Is there a way that I can temporarily change the names of my employees to their legal names for the tax forms without changing their given names on the paystubs?

Definitely! You can manually change the employee's name to their legal name directly on their tax form. This will not affect the name that will appear on the paystubs. 

I have more than six additional boxes to add into my tax form, but Clarity is only allowing six. How can I add additional boxes? 

Each T4 for an employee only allows up to six additional boxes to be included. This means that if you have more than six, you will need to create a second T4 for the employee. 

Why are the amounts not going into the right boxes? Why are the amounts too low/high?

Each payroll category in Clarity has a particular tax form assignment. These form assignments dictate exactly which box on your tax forms that the associated figure will appear in. To verify and/or change your form assignments, navigate to Setup > Payroll Settings > Payroll Categories. Select a payroll category and go to the form assignments tab. You can changed the form assignment here if required. Each payroll category can only be assigned to one box on any given tax form at a time. If you have already created your tax forms,  you must re-create the tax form after you change a form assignment. Your tax forms will not automatically change. 

How can I reconcile my tax forms? 

Along with each supplementary/slip and summary, you can print an Audit Report to verify your figures. To balance your tax forms, please print the Employee Year-to-Date Journal and the Employee History Summary Journal (for the tax year). Both of these reports must match exactly and in turn, also match your summary and Audit Report. If they do not match, please verify: 

1. The date range when generating the Employee History Summary Journal is correct. This means from January 1st to December 31st of the tax year. 
2. The date parameters when generating the Employee History Summary Journal is correct. The date range should be based on the cheque or payment date, not the pay period end dates. If you are unsure, review which one you selected and generate a second report with the other selection to compare to the Employee Year-to-Date Journal and Audit Report. 
3. T4 includes money that was paid in that year only. For example, if at the end of the year, your pay period end date was December 30, 2019 but the employee was paid on January 2, 2020, the amount of that cheque is to go on your 2020 tax forms, not your 2019 tax forms. It does not matter when the money was earned - it is when the money was paid that the taxes and other deductions are charged. 
   
   

IV. Printing and Emailing T4s, T4As, and RL-1s

Boxes 24 and 26 on my T4s appear, but why don't they get printed?

According to the CRA guidelines, if the amount in box 24 is equal to or greater than the maximum insurable earnings, or if it is the same as the amount in box 14, then box 24 on the T4 must be left blank. Similarly, if the amount in box 26 is equal to or greater than the maximum pensionable earnings, or if it is the same as the amount in box 14, then box 26 on the T4 must be left blank. 

Why is my pension adjustment not printing on the supplementaries/slips?

Based on the CRA regulations, pension adjustment figures will be printed only when there is a pension number entered in the slips and that the adjustment amount is greater than zero. The CRA also stipulates that only the dollar amount should be printed and the cents portion will be excluded. If you have not entered a pension number in the slips, you must do so prior to printing them out. This can be done by navigating to Configuration > Company > Company Edit > Canadian Taxation tab. The pension number can be entered on the bottom-right side of the window. 

Why is there missing data in my T4 Summary when I try to print it?

The T4 summary does not print if you did not review the T4 summary prior to printing, so please be sure to go there to review, even if you are sure that all information there is correct. Additionally, please double-check your margin and printer settings to ensure that the fields did not move off the paper when printing. 

I can see my tax forms when editing the supplementaries and summaries, but I cannot see them under the 'Print' option.

Please ensure that you've selected the correct business number under the 'Print' option and that you've entered the correct submission number. To check your submission number, navigate to the supplementaries and you can find the submission number in the last column. 

Can I email tax forms to terminated employees?

Yes, you can! Please simply double-check the email address that you have on file for them and that they are allowed to receive their tax forms by email. You can then follow the rest of the process normally. Be sure that they have the password you've created for them so they can access their tax forms! 

How can I ensure that my RL-1s will print perfectly?

For the best quality of your RL-1s when printing, your computer should have the Arial Narrow font installed. You can also print out test RL-1s before you mass-print them. This way, you will be able to adjust your margins as well as your printer settings accordingly until they're perfect. 

How can I use the blank T4/T4A copies from the CRA website to print out my T4s and T4As?

CRA has made downloadable copies of the T4s and T4A tax forms available on their website. These forms can be printed out and be used to print out your T4s and T4As that you've generated in Clarity. If you have trouble accessing the CRA website or accessing the forms on the CRA website, please contact the CRA directly. Please note that to follow the steps below, you will require Adobe Acrobat. 

1. In your web browser, open this website and choose your language: https://www.canada.ca/en/revenue-agency.html
2. Click on 'Forms and Publications'. 
3. Click on 'View and Download Forms'. 
4. Search for "T4" (Statement of Remuneration Paid (slip)) or "T4A" (Statement of Pension, Retirement, Annuity, and Other Income). 
5. Click on either "T4" or "T4A". 
6. Click on the PDF version of the file (NOT PDF fillable). This will display the form in PDF format. 
7. Download the forms and open it in Adobe Acrobat. 
8. Navigate to File > Print. This will display your printer settings. 
9. Find the section 'Copies and Adjustments' and deselect the setting for 'Shrink oversized pages to paper size'. Note: You must do this step! Otherwise, your forms will not be aligned correctly. 
10. Select the number of copies you'd like to make. 
11. Click "OK". The forms will now print. 
12. You can load these printed forms into your printer and return to Clarity to print out your T4s and T4As. 
    
    

V. Submitting T4s, T4As, and RL-1s to the Government

Can I send my tax forms to the government by mail instead of electronically filing them?

Beginning January 2022, all employers with five or more (5+) employees must file their T4s and T4As electronically. Please ensure that you do not meet this criteria before mailing your T4s and T4As to the CRA. 

I got an error message when trying to create my XML file. What happened?

If you received an error message when trying to create your submission file, Clarity will tell you a brief description of the error message. For example, if it tells you that you have an invalid postal code, please double-check the postal code in your summaries or company information. Even if you have the correct characters for your postal code, please be sure that there is no space in the middle of your postal code. It should strictly be letters and numbers. You can refer to the CRA website for a breakdown of each block and their formatting in your tax forms. For example, your T4s: https://www.canada.ca/en/revenue-agency/services/e-services/filing-information-returns-electronically-t4-t5-other-types-returns-overview/upcoming-year-t619/t4.html

If you received any error messages that you cannot easily understand (e.g. "A dynamic link library (DLL) initialization routine failed, ProgID: "Msxml2.DOMDocument.4.0"", "XML validator returned an error. Please check the file and form data. Reason: not specified", or "Invalid class string, ProgID: "Msxml2.DOMDocument.4.0""), you may not have the latest XML core services from Microsoft. For these particular errors, please go to https://www.microsoft.com/en-ca/download/details.aspx?id=15697 to download and install the MSXML 4.0 Service Pack 3 (Microsoft XML Core Services) using their instructions. Once that is installed, restart Clarity and try to recreate your XML file. 

You may also receive XML validator error messages when trying to create your XML file. Each case is different, but the error code that is provided to you can be looked up on the CRA website: https://www.canada.ca/en/revenue-agency/services/e-services/filing-information-returns-electronically-t4-t5-other-types-returns-overview/upcoming-year-t619/t4.html For example, if this is the error message you receive: "XML validator returned an error. Please check the file and form data. Reason: Pattern constraint failed. The element 'itx_ddct_amt' has an invalid value according to its data type. (1308, 33)". In this case, copy the element "itx_ddct_amt" and search this code on the CRA website. You will find that this particular error means that there is a negative amount in income tax. You will need to verify with the CRA if negative values are permitted in this box of the tax form. 

I got an error message when trying to upload my XML file to the government website. What happened?

If your error message indicates that your eFiling was aborted, it is because either the T619 Transmittal Record (for T4s and T4As) or the RL-1 Transmittal Record (for RL-1s) was not created.

To create your transmittal records for T4s and T4as:

1. Navigate to Forms > T4 or T4A > Magnetic Media Filing
2. Select the correct business number.
3. Enter the correct transmitter number. If you're not sure what your transmitter number is, you can enter "MM999999".  
4. Enter the remaining information as required, such as the file path and submission number. 
5. Click "Next →". 
6. Select the report type code. If you're unsure what report type code to select, contact the CRA. 
7. Complete the remaining information as required, such as transmitter name and type. 
8. Click "Next →".
9. Complete the remaining information as required, such as address. 
10. Click "Next →". 
11. Complete the remaining information as required, such as contact name. 
12. Click "Next →". 
13. Review your summaries and supplementaries and  click "Create submission file". 

To create your transmittal records for RL-1s: 

1. Navigate to Forms > RL-1 > Magnetic Media Filing.
2. Enter the correct transmitter number. 
3. Enter the remaining information as required, such as the file path and submission number. 
4. Click "Next →". 
5. Select the report type code. If you're unsure what report type code to select, contact Revenu Québec. 
6. Complete the remaining information as required, such as transmitter name and type. 
7. Click "Next →".
8. Complete the remaining information as required, such as address. 
9. Click "Next →". 
10. Complete the remaining information as required, such as contact person details. 
11. Click "Next →". 
12. Review your summaries and supplementaries and  click "Create submission file".