CPP Death Benefits- Caution- CRA has automatically included CPP death benefits on terminal return of some deceased persons (on assessment and when Auto-fil is used). Corrective action may be req'd.


It has been reported by subscribers that CRA has recently included death benefits in terminal returns when using “Auto-fill my Return”, and in some cases, automatically included them when assessing this return. CPP death benefits are generally taxable to the receiving beneficiary. Where amounts are not made payable to the beneficiary from the estate in the year, such amounts are to be reported as income on the T3 return of the estate.

In either scenario, the benefit should not be reported on the final return. Tax preparers should remain vigilant for these automatic assessments and make adjustments as appropriate.

For further information see Video Tax News Monthly Tax Update Newsletter, Issue No. 442