CDCP Tax Reporting Update – October 2023

To All Valued Benefit Plan Clients of Health Risk Services

Canadian Dental Care Plan update

In Budget 2023, the government revisited and further detailed plans to set up a permanent dental program, the Canadian Dental Care Plan (CDCP).

You can find the news release here, and full 2023 Canadian Federal Budget here.

 

About CDCP and eligibility:

Per Budget 2023, the CDCP will be available to uninsured Canadians with an annual family income of less than $90,000. For those eligible for CDCP who have a family income under $70,000, co-pays will not apply.

Canadians with access to dental coverage won’t be eligible for CDCP.

 

What this means for Employers:

  • report on a tax slip whether an employee, former employee, or spouse of a deceased employee was eligible, on December 31 of the reporting tax year to access dental insurance, or dental coverage of any kind, (for example, a Health Spending Account), due to current or former employment.

Please note, the codes below aren’t dependent on whether the employee has chosen the coverage or not. The code should reflect the coverage available to the employee based on their group plan.

This reporting obligation will be mandatory beginning with the 2023 tax-reporting cycle. It will continue to be required on an annual basis. New additions will include new tax slip box requirements for employers to fill out:

  • Box 45 (T4): Employer Offered Dental Benefits. This new box will be mandatory.
  • Box 015 (T4A): Payer Offered Dental Benefits. This new box will be mandatory if you report in Box 016, Pension or Superannuation. The box will otherwise be optional.

To complete the tax slip, employers will select from the 5 code options shown in the following chart.

Code

Description

1

No access to any dental care insurance, or coverage of dental services of any kind.

2

Access to any dental care insurance, or coverage of dental services of any kind for only the payee. *

3

Access to any dental care insurance, or coverage of dental services of any kind for payee, spouse, and dependents.

4

Access to any dental care insurance, or coverage of dental services of any kind for only the payee and their spouse.

5

Access to any dental care insurance, or coverage of dental services of any kind for only the payee and dependents

*In this instance, payee refers to the employee.

 

QUESTIONS?

Neither Health Risk Services or the Insurance Company your plan is currently provided by are capable of providing you with reports to assist you with this CRA process. Benefit Plan administration systems don’t capture all the information Employers need to create their tax slips. This is information that only Employers have about their employees. The key point is whether the employee has access to dental benefits. Not whether they have added the benefits to their plan. This is what needs to be reported on employee tax slips by their employer.

If you have questions regarding this new CDCP Tax Reporting obligation, we encourage you to direct them to the provider that helps you fill out your tax slips. For some employers, this may be your payroll company, accountant, or other provider.

 

From:

Your Partner in Providing Awesome Benefits to your Employees,

Health Risk Services Inc.

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