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T4A moratorium officially lifted, CRA reports
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Yes, throwing a net for something else but at the same time being required to process data to ensure proper reporting to alleviate some of the fraud that 3PL business models have facilitated/propagated. I know I'm likely unfairly painting with a too broad brush here, but until all of the stakeholders in the transportation industry acknowledge their part in facilitating fraud and noncompliance and are committed to objectively doing their part- we'll stay stuck in this spiral.
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I am very confident that the federal government intervention with these T4A will put an end to the drivers inc scheme........... Please insert sarcarsm wherever you feel necessary
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Does anyone know if the CRA website has been updated to accept and to handle, the flood of T4As that will appear if everyone complies before Feb 26, 2026? It is one thing to prepare them and even forward them to your supplier, but when we last checked, there was no where to upload them to CRA……making them useless.
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I don't think it will put an end to any scheme. But the journey of a thousand miles begins with a single step.
Just a heads up, and do your own due diligence but we understand that you only send the T4A to carriers that are CCPC (Canadian Controlled Private Corporations.) Carries like Transforce that are publicly traded do not fall under this definition.
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Part of the value added services that brokers provide,??
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I dont think carriers know or understand how thos works, we had one request from Maritime Ontario
Did anyone get a notice from CRA?
A T4A slip in the trucking industry generally indicates income earned as an independent contractor or owner-operator (often in Box 048 for "fees for services") rather than a salaried employee. You must report this income on your tax return, usually on Form T2125, to deduct business expenses and pay income tax.
I think the point that people are missing is this is suppose to be a T4 for YOUR employees and a T4A for YOUR owner operators. They want you to supply T4A to anyone that works directly for you over 50 percent of the time so they can figure out who is using the Driver Inc moto. If you hire my company we invoice you so what is the T4A for? My drivers work for me and I supply the T4's to the CRA. I spoke with CRA about this and they confirmed. If your a Broker and you have no drivers or owner operators you dont issue a T4 or T4A to anyone.
Rather than me posting again - scroll up to Jim L's post from yesterday with the latest update. It clearly states that brokers do have to issue T4A's.
Like many other's on this forum, we too spent way to long on the phone with the CRA.
Compliance requirements for the trucking industry - Canada.ca
Tax obligations for businesses operating in the trucking industry
The website that @hockey posted spells it all out and is direct from CRA. Ask your tax or payroll accountant to confirm this.
The CTA and other stakeholders pleaded with the government of Canada to remove the moratorium on the issuance of T4A's to crack down on the non compliancy in the trucking industry. The government complied and this is what they came up with.
Yes, everyone who is considered to be in the trucking industry (definition in the link) will need to have a payroll account and send a T4As to CCPC companies for payments over 500. This means brokers sending one to their carriers as well as carriers having to send a T4A to their owner operators and sub contracted transportation providers (DRIVER INC).
The expectation is that CRA may audit and will take the T4A that was issued from BROKER to Carrier, or Carrier to subcontracted employee, and identify if the total invoices reported match between the two. It will be one more tool for CRA to look for inconsistencies.
The CTA and other stakeholders pleaded with the government of Canada to remove the moratorium on the issuance of T4A's to crack down on the non compliancy in the trucking industry. The government complied and this is what they came up with.
Yes, everyone who is considered to be in the trucking industry (definition in the link) will need to have a payroll account and send a T4As to CCPC companies for payments over 500. This means brokers sending one to their carriers as well as carriers having to send a T4A to their owner operators and sub contracted transportation providers (DRIVER INC).
The expectation is that CRA may audit and will take the T4A that was issued from BROKER to Carrier, or Carrier to subcontracted employee, and identify if the total invoices reported match between the two. It will be one more tool for CRA to look for inconsistencies.
The onus lies with the company who issues the T4A. They are the ones who would face the fines and penalties if they do not issue the T4A.
Although companies are supposed to put their business/HST number on their invoices, we have found only about 25% actually do. You can always ask them for their business number or look it up on a registry which can be tedious to say the least.
QuickBooks is also finicky with how you need to enter a company's business number, email address and other information in order to generate mass T4A emails or mailings and T4A summary reports for CRA.
Although companies are supposed to put their business/HST number on their invoices, we have found only about 25% actually do. You can always ask them for their business number or look it up on a registry which can be tedious to say the least.
QuickBooks is also finicky with how you need to enter a company's business number, email address and other information in order to generate mass T4A emails or mailings and T4A summary reports for CRA.
This example from the CRA website explains it the best...Compliance requirements for the trucking industry - Canada.ca
Tax obligations for businesses operating in the trucking industrywww.canada.ca
Note: This example outlines the use of an intermediary (broker). Intermediaries are primarily engaged in arranging and coordinating the transportation and storage of goods between a shipper and a carrier without themselves providing actual transportation and storage services.
LMN Carrier Brokerage Ltd., a freight brokerage that earns 90% of its income arranging freight transportation via truck transportation, is contracted by XYZ Furniture Co., a company whose primary business activity is furniture production, to arrange and coordinate the delivery of freight from Vancouver to Calgary. XYZ Furniture Co. pays $2,500 to LMN Carrier Brokerage Ltd. for its services. LMN Carrier Brokerage Ltd. in turn contracts Haulage Inc., a CCPC that earns most of its income from trucking activities, to make the delivery via truck for a payment of $2,100.
In the case of XYZ Furniture Co.:
- The lift of the moratorium on assessing penalties for failure to report fees for service in the trucking industry does not apply because XYZ Furniture Co.’s primary business activity is furniture production, not trucking activities.
- Under the Income Tax Act, XYZ Furniture Co. is still required to report the fees it paid to LMN Carrier Brokerage Ltd. in box 048 of the T4A slip, even though its primary source of income is not from trucking activities, and it must provide the completed T4A slip to LMN Carrier Brokerage Ltd. by the last day of February of the following calendar year to which the slip applies.
- XYZ Furniture Co. must also include this amount when it completes its T4A summary. It must send both the completed T4A slip and the T4A summary to the CRA by the last day of February of the following calendar year.
- Because both LMN Carrier Brokerage Ltd. and Haulage Inc.’s primary sources of income are from trucking activities and the payment made to Haulage Inc. exceeds $500 in the calendar year, LMN Carrier Brokerage Ltd. must complete a T4A slip and report $2,100 in box 048, Fees for services.
- LMN Carrier Brokerage Ltd. must provide the completed T4A slip to Haulage Inc. by the last day of February of the following calendar year to which the slip applies and must include this amount in its T4A summary.
- LMN Carrier Brokerage Ltd. must send both the completed T4A slip and the T4A summary to the CRA by the last day of February of the following calendar year.
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How ironic, to put it mildly, that the largest purchasers of transportation services are not obligated to comply with this requirement at all.. The large, multi national shippers, especially the ones who are primarily price driven, spend far more every year on transportation than most brokers. As a result, they are far more likely to be the ones enabling some carriers to employ the Driver Inc model. Including freight brokers in this widely cast net, is a waste of government time and money, to say nothing of the additional expense incurred by freight brokers. Carriers are the ones employing this Driver Inc model to reduce their bottom line. How in heavens name, will forcing my firm and other brokers to report their payables to CRA ever eliminate this problem? If freight brokers must comply, why not every other purchaser of transportation services? This is entirely a carrier specific problem, encouraged and supported by a number of companies, that should be addressed by carriers.
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