Box O – Benefits Paid Under a Wage Loss Replacement Plan (Code: RN)

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If you are an insurer, enter in box O of the RL-1 slip (see courtesy translation RL-1-T) the amount of the wage loss replacement benefits that you paid during the year, provided the following conditions are met:

  • You paid the benefits under a wage loss replacement plan (health insurance, accident insurance, disability insurance or income insurance) further to the full or partial loss of the beneficiary's employment income.
  • The beneficiary's employer contributed to the insurance plan.

Do not deduct from the amount to be included in box O the contributions paid by the employer and the employee.

The contribution that the employer paid under a wage loss replacement plan (that is, the employer's share of the contributions) does not constitute a taxable benefit for the employee. Consequently, it should not be entered on the RL-1 slip.

Important

If you are not an insurer and you paid amounts to one of your employees because of the full or partial loss of the employee's employment income, these amounts are generally considered employment income.

However, such amounts are considered wage loss replacement benefits if the plan is based on insurance principles, that is, if the funds are accumulated, usually in the hands of a trustee or in a trust account, and they are sufficient to guarantee the payment of potential claims.

For more information, consult the current version of interpretation bulletin IMP. 43-1 on the Publications du Québec website, or contact us.

As a rule, amounts paid by a third party under an administrative services only (ASO) contract that is not based on insurance principles are deemed to be employment income.

Repayment of wage loss replacement benefits

If, pursuant to an arrangement, an employee or a former employee repays you wage loss replacement benefits in the year they were received, enter:

  • in box O, the wage loss replacement benefits paid during the year (including the wage loss replacement benefits repaid in the year);
  • in a blank box, “O-4,” followed by the amount of the repayment of wage loss replacement benefits (the employee can claim a deduction for this amount in his or her income tax return);
  • in box B, the total Québec Pension Plan (QPP) contributions withheld at source during the year (including the QPP contributions withheld from the wage loss replacement benefits repaid in the year);
  • in box E, the total Québec income tax withheld at source during the year (including the income tax withheld on the wage loss replacement benefits repaid in the year);
  • in box G, the pensionable salary or wages under the QPP for the year (including the wage loss replacement benefits repaid in the year);
  • in box H, the total Québec parental insurance plan (QPIP) premiums withheld at source during the year (including the QPIP premiums withheld from the wage loss replacement benefits repaid in the year);
  • in box I, the eligible salary or wages under the QPIP for the year (including the wage loss replacement benefits repaid in the year).

If the employee or former employee repays you wage loss replacement benefits in a different year than they were received, you must enter “O-4” in a blank box, followed by the amount of the repayment of the wage loss replacement benefits. This way the employee will be able to claim a deduction in his or her income tax return. You are not required to file an amended RL-1 slip for the year the wage loss replacement benefits were received. In addition, you cannot request a refund for an overpayment of employer contributions.

For information about wage loss replacement benefits repaid after a decision by the Commission des normes, de l'équité, de la santé et de la sécurité du travail (CNESST), see RL-1 Slip  – Indemnities Further to an Industrial Accident (CNESST).

Retroactive pay

If, during the year, you make a retroactive payment to an employee and a portion of the payment applies to previous years, you must give the employee a statement indicating the total amount that applies to previous years, the years concerned and the amount that applies to each year. The employee can use the statement to request an income tax adjustment when filing his or her income tax return.

Top-up disability payments

Enter in box O (code RN) any top-up disability payments that you made to an employee, if you contributed to a group insurance plan.

If you made top-up disability payments to an employee during the year and the employee repays you those amounts in the same year, enter in box O the net amount of the payments (that is, minus the repayment). If you made the top-up disability payments in a previous year, you must provide the employee with a written statement indicating the amount the employee repaid in the year, so that the employee can claim a deduction in his or her income tax return.

Source of income

You must indicate the source of this income by entering code RN in the box marked “Code (case O)” of the RL-1 slip.

For more information on the codes to enter in the box marked “Code (case O),” consult RL-1 Slip – Box Marked “Code (case O)”.

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