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SmallBiz Employee Benefits – Income Tax Box 85

By January 17, 2020 No Comments

As we slide into tax-season, it is important for you SmallBiz Owners out there to remember that if you make contributions to a private health services plan (such as medical or dental plans) for employees, there is no taxable benefit to the employees.

Having said that, if you are sharing the Health and Dental premiums with your employees, then remember that “Employee-paid premiums to a private health services plan are considered qualifying medical expenses and can be claimed by the employee on their income tax and benefit return.”

Include the amount that the employee paid on a T4 slip in the “Other information” area under code 85. The use of code 85 is optional. If you do not enter code 85, we may ask the employee to provide supporting documents.

Use the T4A slip to report these amounts for former employees or retired employees. Enter the amount under code 135, “Recipient-paid premiums for private health services plans,” in the “Other information” area at the bottom of the T4A slip.

For more information on private health services plans, go to the CRA website.

Hope this helps.

Jay Sharkey

Located in Cambridge, ON Sharkey Group Insurance  provides independent Employee Benefits advice & counsel for Small Businesses across Ontario.