SAGE – UPDATE prior to issuing T4’s

2021.1.1 product update for Payroll Users

Starting January 19, 2021, you will be notified when you shut down your software that you have a product update ready to be installed. The 2021.1.1 update addresses a T4 reporting issue with respect to COVID-19 pay periods in 2021.1 which was released in December 2020.

If you use Sage 50 to produce T4’s, and you paid out vacation to employees on pay cheques (if the option to retain vacation was not selected) during 2020, please download and install the 2021.1.1 update before generating T4’s for the 2020 tax year.

If, however, you paid vacation pay when the option to retain was selected, you can produce your T4s as normal with the 2021.1 update and complete the 2021.1.1 product update at your convenience.

Vacation paid during COVID-19 not reported correctly on T4s.

Summary

  • Vacation pay that is paid during the COVID-19 periods is not reporting correctly on boxes 57 through 60 on the T4.
  • T4s for employees that have vacation paid out on every cheque, rather than accruing it, are not correct.

Cause

If Vacation is not retained and is being paid out on each paycheque, then it is not being reported correctly on the T4s for the COVID-19 periods.

Resolution

Vacation paid out on every paycheque should be included in the reported boxes when it is paid.

There is an issue with COVID-19 reporting on the T4’s in the 2021.1 update for employees that you paid vacation when vacation was not being retained. To correct this issue, we will be releasing another product update near the end of January.

  • If you paid vacation pay when vacation was retained for all employees, you can produce your T4s as normal.
  • If you paid vacation pay when vacation was not retained for some employees, please wait until you have installed the new product update before producing your T4s.

Note: You should still install 2021.1 and use it to process your payroll at the beginning of the payroll tax year to ensure that payroll calculations are accurate.

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