by Peggy
(Alberta, Canada)
Oops! I have an EI overpayment to CRA
Hi. I have a big problem that I need help with ASAP.
I use Simply Accounting (now Sage 50 - Canadian Edition). I'm a bookkeeper working from home. I completed books for my client (a corporation with Sep 30, 2011 fiscal year-end) in April, 2012 (s/he was late getting things to me) and sent it all to the accountant for completion of corporate taxes and a T4.
During 2011, the shareholder was doing their own payroll, but had messed it all up. S/he was not remitting on time and had various other issues which included deducting and remitting E.I. I sorted it out based on the cheques issued and the remittances made; then posted all the payroll.
I asked the accountant to review my work and issue the T4 (because this was my first time with payroll and I wanted the accountant to check it). The accountant said they would file the T4 but DID NOT.
Now several months have gone by and yesterday I received a call from CRA asking me for the T4 and the T4 Summary because the accountant says their office does not issue T4s.
I printed the T4, but there is a problem. The shareholder deducted E.I. during that year and paid the employee (EE) and employer's (ER) portion (1.4 of EE) to CRA.
When the client realized that EI should not have been deducted, CRA was contacted. CRA advised deduct the EI payments (EE + ER = z) from their next remittance, which was done on December 16, 2011.
Below is my entry for the remittance paid to CRA:
CPP Payable (Acct 2185) xxxx DR
Fed Tax Payable (Acct 2190) yyyy DR
EI Payable (Acct 2180) zzzz CR
Acct Payable (Acct 2100) x+y-z CR
The T4 Summary shows that the shareholder owes the EI (amount z) and box 18 on the T4 shows the EE amount of EI paid.
What adjustments do I need to make in Simply so this amount does not show up on the T4 and the T4 Summary is correct? Can I date the entry 2011 without messing up things in my current year? Or should I manually do a T4 and T4 Summary and make the Simply Accounting adjustments required in the current date?
If I do it manually, I'm not sure what to do with the EE amount of EI paid in box 18 and I still need to know what adjustments to make in Simply Accounting. The good news is that the client did not have any payroll in 2012 and took draws instead.
Thanks for your help.
Comments for Annual T4 Summary Reconciliation
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