Quote:
Originally Posted by belsarius
Yup for sure there is a benefit, I am just running into pushback about if we report it or if we can push that responsibility to the employee. The answer I got was "the last controller worked at EY and she said it was fine to make them sign a letter that they take responsibility for reporting the benefit", but I just don't think this is correct. Unfortunately all of my accounting training is reporting and management side and I haven't touched tax implications in years.
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No. Strictly speaking the onus is upon the employer to report the income on the T4 as a taxable benefit.
Making the employee sign some letter is swell and all, but the employer is going to want to write that loan off and there has to be a corresponding item for it, you cant just trust that the employee is going to do it.
By the employee defaulting on an employer loan it has transitioned from a 'loan' to 'employment income' or a form of bonus, the employer has to record it as such.