T4 Box 94 95 Setup Overview

T4 Box 94 95 Setup Overview

GOAL: To provide a wholistic overview of how to set up Box 94 and 95 as Deduction Codes and apply them in T4 Entity Maintenance, alongside a list of considerations for this. 

PAYROLL > BOARD > DEDUCTION CODES > NEW

**Create BOX94 Code**

PAYROLL > BOARD > DEDUCTION CODES > NEW

**Create BOX95 Code**

Note: Board may choose to enter any meaningful Deduction Code for the naming of Box 94 and 95, for the simplicity of this overview article we have chosen; ‘BOX94’ and ‘BOX95’. 

PAYROLL > BOARD > DEDUCTION CODES MAINTENANCE

**Setup BOX94 Deduction Code**

PAYROLL > BOARD > DEDUCTION CODES MAINTENANCE

**Setup BOX95 Deduction Code**

PAYROLL > YEAR END > T4 ENTITY MAINTENANCE > NEW > BOX94 + BOX95

**Create T4 Entity Record for BOX94**

Box 94 and 95 Considerations:

94: Any RPP contributions on tax-exempt employment income.  The only way to do RPP contributions on tax-exempt income is:

1. If 100% of the income was tax exempt, then the entire pension contributions would fit this box.
2. If only a portionof the income was tax exempt, then either: 
   1. Most clients do this for these reasons: 
      1. OMERS specifically requires a breakdown of non-taxable RPP contributions vs. taxable RPP contributions.
      2. Retro & other payments make income fluctuate during the year so you can't usually just say "this '%' of income was non-taxable this year" in the "Portion" column of T4 Entity Maintenance
      3. Steps: set up a non-taxable earning code & non-taxable deduction code to act as the pension deduction (ex. OMERSNTX for OMERS non-taxable) > reduce the regular income by using a negative recurring payment > pay the EE the non-taxable income via another recurring payment in a non-taxable earning code > override the main pension code (ex. OMERS/TPP) to reduce the pension by the non-taxable contributions amount > override the custom deduction code (ex. OMERSNTX) for the non-taxable pension contrib. amount.
   2. OR you could apply a Portion lower than 1.0 to the T4 Entity Maintenance mapping if it was perfectly consistent the entire calendar year (ex. if exactly 50% of the OMERS deduction was on non-taxable income then you could do that.
   3. Third option: Do a YTD adj. to remove the amount you need from OMERS and put it into a custom code for Box 94 & 95.  Clients would have already had to break out the non-taxable RPP contributions for OMERS reporting, so option 1 is more logical during the pay, or option 3 is more logical if they didn't already do this during the pay.