January 2024: An update on Canada's Dental Benefit

A few months ago, I shared some details on the Government of Canada’s interim plan for the Canada Dental Benefit.

For plan administrators, I noted that the biggest impact for you is currently a new tax reporting requirement and we’ve gotten a few more details on this for the 2023 tax reporting year.

The T4 and T4A tax reporting codes have now been released. Here’s an overview:

• Code 1 - Employee has no access to dental care insurance or coverage of dental services of any kind

• Code 2 - Employee has access to any dental care insurance, or coverage of dental services of any kind but their spouse and dependents do not

• Code 3 - Employee, their spouse, and their dependents have access to any dental care insurance, or coverage of dental services of any kind

• Code 4 - Only the employee and their spouse have access to any dental care insurance, or coverage of dental services of any kind

• Code 5 - Only the employee and their dependents have access to any dental care insurance, or coverage of dental services of any kind.

I’ve gotten a few questions from clients about which code they should use, especially as we go into tax reporting season. If your plan includes dental coverage or a health spending account that goes towards dental costs for your employees and their families, then you’ll most likely need to use Code 3. Keep an eye on this space as more details emerge on the Canada Dental Benefit in the future!