March 26, 2019
It has come to our attention that the tax slips mailed to former employees and retirees by the Monitor reported the entire distribution received in late 2018 as taxable. Specifically the amounts are reported in box 67, which is used for retiring allowances and is taxable unless it is transferred into a locked in retirement account by the employer. We have been in discussions with the Monitor and the Canada Revenue Agency (“CRA”) has been contacted to provide clarification and to resolve the inconsistency with the advice provided at the time the distribution was made.
As you may recall, in November 2018, we reported that distributions for claims based on the termination of life insurance benefits and housing reimbursements were not considered taxable and no withholdings were taken for these distributions. The Monitor paid against these distributions first, therefore if your claim for life insurance and/or housing reimbursement was greater than your overall distribution, no amount was taxable and no amounts were withheld for tax purposes.
All other claims in respect of amounts owing to you were considered taxable.
We are preparing a mailing to affected members in anticipation of a solution from the CRA and ask that members wait to file their taxes until we have further information, which we expect within the week.
If you have already filed your taxes we will provide instructions on the next steps once we have a response from the CRA.
Please continue to check back as we will provide an update as soon as we have more information.