WHO IS ELIGIBLE?
Shareholders are eligible; however, if the plan is made available only to shareholders, CCRA may argue that the plan is not a benefit received by virtue of employment but rather an appropriation by a shareholder.
For an individual to receive tax free health and dental benefits for an employer, Revenue Canada must define them as an employee. If one of the following answers to the questions below is “yes”, then the person is an employee.
1. Does the individual collect a wage, salary, fees or bonus?
2. Does the corporation (employer) remit payroll taxes (income tax and CPP) on behalf of the individual?
3. Are payments made to the individual deductible from the corporation’s (employer’s) income? (IE. management fees, wages, salaries, bonuses)
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