A retired employee, who had a right to receive a bonus payment (a restricted share unit) in 2017 and in 2018, died in 2017 which, under the terms of the plan, resulted in all entitlements becoming payable immediately. However, the employer did not make the payment to the deceased’s estate until 2018, when it became aware of the death. The correspondent noted that Guide 4011 provided that the T4 slip was to be prepared in the year the amounts were paid even if they were earned in a different taxation year. Was this correct? CRA stated:
The T4 prepared by the employer would reflect the year of payment, which in your example occurred in 2018 and the amounts received by the estate should be reported on the final return of the deceased in 2017, the year of death.