Taxable Benefits now Include Accidental Death, Dismemberment and Critical Illness

Taxable benefits in 2013 include accidental death and dismemberment and critical illness.

Following the announcement of the federal government on March 29, 2012, employer-paid premiums for Accidental Death and Dismemberment (AD&D) and for Critical Illness (CI) insurance will become taxable benefits to employees across Canada. Premiums paid after March 29th, 2012 will be used to assess the taxable benefit consequences for employees/members as of January 1st, 2013.

Presumably, if taxable benefits are not being attributed to employees/members monthly, we would suspect that a taxable premium would be charged to a member for benefit premiums paid on their behalf from April 1, 2012 to December 31, 2012.  According to the document, the benefits would have to be in place and active as of January 1, 2013.

Employer-paid premiums for private health services plans (including health, drug and dental plans) will not be affected and will continue to be non-taxable benefits for federal income tax purposes. Please note that in Quebec, employer-paid premiums for such plans will remain non-taxable benefits for federal income tax purposes, but taxable at the provincial level.

For information on how this affects employers have a look at this post from our archives.

For over 20 years, Chris Pryce of Human Capital Benefits has been advising employers on all aspects of managing employee benefits programs and related products. If you have any questions, you can contact Chris at 416.924.8280 or by email at chrispryce@www.humancapitalbenefits.com   

2018-04-17T15:55:46+00:00