Qualifying Retroactive Lump Sum Payment forms

Many members have received the T1198 Qualifying Retroactive Lump Sum Payment (QRLSP) form from PSPC relating to having payouts received as part of the conciliation award taxes as if they had been earned in prior years.

It is our understanding that the forms provided to our members were not signed and many of you have asked if they are incomplete. We have contacted CRA on your behalf and the staff have advised that they will accept the unsigned form as issued by the employer.

CRA staff have cautioned that, for many of you, the tax treatment may not result in gains.  Although the amounts will be taxed as income earned in prior years, interest is payable on the amounts commencing with the year they were deemed to have been earned.  Therefore, any favorable tax treatment may be offset or outweighed entirely by interest amounts owing.

However, we have been advised that the CRA will only apply the special tax calculation when it is advantageous to the individual. Therefore, you may request the calculation without worrying about the risk of unfavorable assessment being be imposed.