Box 85 and Box 14: A Comparative Analysis
When it comes to tax reporting, the terms "Box 85" and "Box 14" often spark curiosity among employees and employers alike. Both boxes appear on the T4 slip, a crucial document issued by employers to report employment income and deductions to the Canada Revenue Agency (CRA). But are they one and the same? Let's delve into the details to understand if Box 85 is included in Box 14.
Understanding Box 14 on the T4 Slip
Box 14 on the T4 slip is a catch-all box, used to report various types of income or deductions that don't fit into the other boxes. This could include things like employment benefits, taxable allowances and benefits, or income from a partnership. The CRA provides a list of codes to help employers identify the specific type of income or deduction reported in Box 14.
Common Codes Used in Box 14
- Code 10: Employment income - taxable allowance or benefit
- Code 12: Employment income - taxable benefits (e.g., personal use of a company vehicle)
- Code 28: Employment income - taxable allowances and benefits
What About Box 85?
Box 85, on the other hand, is a specific box used to report the amount of a taxable benefit an employee received from an employer-provided vehicle. This box was introduced in 2016 to simplify the reporting process for employers and employees. Prior to this, the taxable benefit from an employer-provided vehicle was typically reported using a code in Box 14.
How Box 85 Simplifies Tax Reporting
By having a dedicated box for employer-provided vehicles, Box 85 simplifies tax reporting in a few ways:
- It reduces the complexity of Box 14, making it easier for employees and the CRA to understand the information on the T4 slip.
- It allows employers to report the taxable benefit from an employer-provided vehicle using a single, clear value, rather than a code that requires interpretation.
- It aligns with the CRA's efforts to simplify tax reporting and reduce administrative burden for both employers and employees.
Is Box 85 Included in Box 14?
Now that we've discussed Box 85 and Box 14 separately, let's address the main question: is Box 85 included in Box 14? The short answer is no, they are not the same. Box 85 is a separate box on the T4 slip, used exclusively for reporting the taxable benefit from an employer-provided vehicle.
However, it's essential to note that if an employer provided a vehicle before 2016, the taxable benefit would have been reported using a code in Box 14. Therefore, you might still see Box 14 used for this purpose on older T4 slips. But since 2016, Box 85 has been the designated box for reporting employer-provided vehicles.
When to Use Box 14 Instead of Box 85
While Box 85 is typically used for employer-provided vehicles, there are a few exceptions where Box 14 might still be used:
- If the employer-provided vehicle is not used primarily for employment purposes, the taxable benefit may be reported using a code in Box 14.
- If the employer-provided vehicle is a zero-emission vehicle, the taxable benefit may be reported using a code in Box 14.
Final Thoughts
In conclusion, Box 85 and Box 14 serve different purposes on the T4 slip. While Box 14 is a catch-all box for various types of income and deductions, Box 85 is specifically used to report the taxable benefit from an employer-provided vehicle. Understanding the difference between these two boxes can help employees and employers accurately report and understand their tax information.
