Averaging of a retroactive payment - QuebecA "qualifying retroactive lump sum payment" is an amount paid to an individual (other than a trust) during a year that relates to one or more prior eligible taxation years during which the individual was a resident of Canada throughout the year.
Revenu Québec (RQ) will calculate a tax adjustment if the amount that relates to prior years is $300 or more.
The income received on form TP-766.2 from a "Retroactive Lump-Sum Payment" issued by the payer must be reported on the T4, T4A or T4E or RL-1 slip or the RL-2 slip of the beneficiary and seized in his statement.
In Quebec, filing form TP-766.2 with an amount of $300 or more will exclude the provincial return from NETFILE transmission. Therefore, this form must be attached to the tax return and sent by mail. However, you can submit your tax return to the federal government via NETFILE
For more information on this topic, please see the following Revenu Québec links:
https://www.revenuquebec.ca/en/online-services/forms-and-publications/current-details/tp-766.2-v/
Read the "Retroactive payments and support-payment arrears" paragraph.
https://www.revenuquebec.ca/en/online-services/forms-and-publications/current-details/tp-766.2-v/
If the retroactive income is from employment and reported on a T4/RL-1, or from T4A/RL-2 first enter the information shown on your T4/RL-1 slip. Then follow these steps:
1- On the "Left side menu on the Interview tab", select the item "Other income" and on the page to the right, click on the plus "+" icon next to the line "TP-766.2 - Information about the amounts received as a retroactive payment, as support-payment arrears or as a repayment of support".
2- On the page generated, choose the appropriate option from the drop-down menu to the right of the line "Select the type of amounts received".3- Enter the amounts relating to each applicable year.
Box 404 of the Quebec return will be checked so that RQ can do the necessary calculation to determine the tax treatment that is most beneficial for you.
NOTE: You should also follow the federal procedure regarding "Qualifying retroactive lump sum payment" and complete form T1198 if it was not completed by the payer.
ID: 20191008104404NAXXXXXXX.xml
Webpage: KPA310-20191008104404NA.htm