17 May 2013 CLHIA Roundtable, 2013-0479111C6 - WLRP Reimbursement by Insurance Corp Due to Error -- summary under Paragraph 6(1)(a)

The correspondent wrote that, if an employee receives amounts under a wage replacement plan and the employer and insurer mistakenly believe the amounts not to be a taxable benefit, the employee may subsequently be reimbursed for income tax payable, accounting fees, interest and penalties. CRA stated that such reimbursement would generally be taxable pursuant to s. 6(1)(a) on the basis that income tax, interest and penalties are personal expenses. Whether reimbursement for accounting fees constitutes a taxable benefit was not clear from the correspondent's facts.