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Quiz: Closing a payroll account

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1 A business ceases to operate on 10 June. When is its T4 information return due? Within 60 days of the end of the calendar quarter The last day of February following the year, as usual Within 30 days of the day the business ends Within 30 days of the payroll account being closed

Answer key unconfirmed — rests on 4 unverified claims.

2 An employer is between contracts and expects no employees for several months. Should it close the payroll account? Yes, and reopen it with a new reference number when payroll resumes It makes no difference either way, since no remittances are due Yes — an account with no payroll must be closed Not necessarily — it may keep the account open and report that no remittance is due

Answer key unconfirmed — rests on 1 unverified claim.

3 A business is sold. How does the payroll position differ between an asset sale and a share sale? Both require the vendor to close its payroll account On a share sale the purchaser is a new employer; on an asset sale the employment continues On an asset sale the vendor's employment relationships generally end and the purchaser is a new employer; on a share sale the same corporation generally continues as the employer There is no difference; the purchaser continues the payroll either way

Answer key unconfirmed — rests on 1 unverified claim.

4 The business has ended and the payroll account is closed. How long must payroll records be kept? Generally six years from the end of the last tax year they relate to; closing the account does not shorten that Until the payroll account is closed Until the final information return is assessed Two years from the end of the business

Answer key unconfirmed — rests on 2 unverified claims.

5 Which of these survive the closing of a payroll account? Select all that apply.

Select all that apply.

The possibility of a pensionable and insurable earnings review on the final return The obligation to file nil remittances Liability for unremitted source deductions, including director's liability The other program accounts on the same business number, and the business number itself The record retention obligation

Answer key unconfirmed — rests on 3 unverified claims.

6 An employer asks whether it should send the record of employment to CRA with the final return. No — it is given to the employee, who files it themselves No — the record of employment is filed with Service Canada and is not a CRA obligation Yes — it accompanies the T4 information return Yes, but only where the employee is claiming EI

Answer key unconfirmed — rests on 1 unverified claim.

7 What needs care about the final pay run when a business closes mid-year? Nothing beyond the ordinary calculation Taxable benefits provided during the part-year must be included, since there is no later payroll to withhold on them; and vacation pay, severance and retiring allowances are not all treated the same way Only that the final pay must be issued before the account is closed Only that annual maximums must be prorated

Answer key unconfirmed — rests on 2 unverified claims.

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