Understanding 2023 Tax Reporting Requirements for the Canadian Dental Care Plan (CDCP)

Introduction to the CDCP

The Canadian Revenue Agency (CRA) has announced new tax reporting requirements for the Canadian Dental Care Plan (CDCP) for the year 2023. This initiative aims to ensure accessible dental care for Canadians who meet certain eligibility criteria. The CDCP is designed for individuals who lack access to dental care insurance, have an annual family net income of less than $90,000, reside in Canada for tax purposes, and filed a tax return in the previous year.

Eligibility Criteria for CDCP

The CDCP is available to Canadians who fulfill the following conditions: they do not have access to dental care insurance, their annual family net income is below $90,000, they are residents of Canada for tax purposes, and they have filed a tax return in the previous year. These stringent criteria ensure that the CDCP reaches those who truly need assistance with dental care costs.

Role of Group Benefit Plan Sponsors

Group benefit plan sponsors play a critical role in the implementation and reporting of the CDCP. They are tasked with determining the dental care coverage available to their plan members. In 2023, sponsors need to report any access that plan members have to dental care insurance or any form of dental coverage within the T4 and T4A tax slips. This information is essential for the CRA to verify the eligibility of individuals applying for the CDCP. Therefore, accurate and timely reporting by plan sponsors is crucial.

Changes to T4 and T4A Reporting

Issuers of T4 and T4A tax slips must now include information regarding dental care insurance access or dental coverage of any kind for the 2023 fiscal year. This new requirement helps ensure transparency in the administration of the CDCP and assists the CRA in maintaining accurate records. Group benefit plan sponsors must adapt their reporting practices to incorporate these additional details to meet CRA reporting standards.

The Canada Revenue Agency has added:
• T4 - Box 45 Employer-offered Dental Benefits
• T4A - Box 015 Payer-offered Dental Benefits which is mandatory if an amount is reported in Box 016, Pension or Superannuation.

Specified Codes: To accurately communicate the nature of dental coverage, specific codes have been introduced. These codes range from indicating no eligibility for dental care insurance (Code 1) to detailing coverage for the payee, spouse, and dependents (Code 3).

• Code 1: Not eligible to access any dental care insurance or coverage of dental services of any kind.

• Code 2: Access to any dental care insurance or coverage of dental services of any kind for only the payee.

• Code 3: Access to any dental care insurance or coverage of dental services of any kind for payee, spouse, and dependents.

• Code 4: Access to any dental care insurance or coverage of dental services of any kind for only the payee and their spouse.

• Code 5: Access to any dental care insurance or coverage of dental services of any kind for only the payee and dependents.
  

Conclusion

The introduction of the 2023 tax reporting requirements for the CDCP underscores the Canadian government's commitment to improving dental care accessibility for eligible citizens. Group benefit plan sponsors must be diligent in their 2023 T4 and T4A reporting to support this initiative. By understanding and complying with these new requirements, sponsors can help ensure that more Canadians receive the dental care they need, making a significant impact on public health and well-being.

Advise:
Your accountant or payroll service provider can assist you with any reporting requirements.