# Why do I have to pay Double Tax on my VTP Lumpsum payment?



## flds (May 5, 2013)

Received Salary + a VTP lumpsum payment of $ 6442 in Feb 13 (VTP RRSP), a tax deduction of $440 (6.83%) on the lumpsum payment, I receive $6002 (after tax) and invested this in RRSP 2013. 
On T4 slip Line 14, I see $6442 added to income. Looks like I will be taxed twice. I fall under the 30+% tax bracket.
The $440 deducted at source does not show up on my T4 slip, How & Where should I indicate on my return that $440 was deducted. How to prove to Revenue Canada about this deduction. 
Pl advise.

Thanks
FLDS


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## Eclectic12 (Oct 20, 2010)

What is a VTP lump sum payment? Is paid to you by your employer?

Assuming both are paid by your employer as employment income, your T4 box 14 should show the gross amount (i.e. $6442). The taxes withheld should be in box 22. Usually there are also deductions for CPP in box 16 (or QPP box 17) and EI in box 18.

If box 22 is empty and you think it should have $440, you should contact your employer. 

As for proving to CRA it was deducted - do you have pay slips show the current pay period income tax withheld & year to date income tax withheld? 

If so, you should be able to enter your own numbers and attach a copy of the pay slip with a note indicating you are following up with the employer as to why the T4 is different.


This may all change depending on what the VTP is .... and note I'm not a tax expert so make sure to confirm with other sources such as CRA.

Cheers


*PS*

From CRA's web site:


> If you know that you will not receive your slips on time to file your return, or you do not receive them, attach a note to your paper return stating the payer's name and address, the type of income involved, and what you are doing to get the slip. Use any stubs or statements you may have to calculate the income you have to report and any related deductions and credits you can claim. Attach the stubs or statements to your paper return. If you are filing electronically, keep all of your documents in case we ask to see them.


http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/slps/menu-eng.html


The info is for missing slips but I expect the same will work for incorrect slips.


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## MichelR (Feb 22, 2014)

+1 for checking with your employer. Could just be an error from your pay dept., or at the very least they could explain what's the logic behind it. There's still time to fix this if need be.

And, yes, what is a VTP?


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## OhGreatGuru (May 24, 2009)

A dyslexic Pension Transfer Value?


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## OnlyMyOpinion (Sep 1, 2013)

OhGreatGuru said:


> A dyslexic Pension Transfer Value?


:biggrin:


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## flds (May 5, 2013)

Thank you all for taking the time to explain this.

VTP = Voluntary Termination Package.

I spoke to my HR and they mentioned the deduction is included in CPP & EI.
I gave it up without question. For me it still does not make sense.
I feel, I should have got a paper for the $440 deduction.

Thank you all once again.

Flds


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## OhGreatGuru (May 24, 2009)

If I understand correctly, the $440 was for CPP and EI, (presumably they were obligated to deduct these from your VTP) and is included in the CPP and EI totals on your T4; for which you receive credit on lines 308 & 312 of Schedule 1. So what's the beef?


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