Well, the “no mid-year tax update” euphoria didn’t last too long… 🙂

As a result of the June 2014 Ontario election and subsequent budget in July 2014, there are tax changes, affecting Ontario only and only affecting those with incomes > $150,000. The tax changes are effective for September 1, 2014 tax tables, but are retroactive to January 1, 2014.

This update is somewhat optional as you can read below, and organizations need to decide how many of their employees it affects and if the employee(s) affected can authorize manually changing the withholding for the last 4 months of the year to accommodate the change instead of putting a new service pack in now.

If you do not have employees in Ontario, you can ignore this entirely!

Here is some more information, passed on from Microsoft:

Notice to the reader
The September 1, 2014, version of Guide T4127, Payroll Deductions Formulas for Computer Programs, contains adjustments for proposed increases to personal income tax rates tabled in the Ontario budget on July 14, 2014. The proposed changes are retroactive to January 1, 2014, and the revised tables reflect prorated tax rates to allow employers to withhold the correct additional amounts from affected employees between September and the final pay of 2014. The changes to the tables apply to employees who earn more than $150,000 in 2014.
The CRA normally requires employers to withhold and remit income taxes in line with current rates, but because of the complexities and timing of the Ontario budget measures it is recognized that these income tax changes will be implemented on a best-effort basis where practical, in full appreciation of the different payroll systems and administrative capacities of employers. Employers will not face penalties for failing to withhold as a result of the Ontario budget measures introduced on July 14, 2014.
Employees whose employers are unable to change their payroll systems or processes on time can ask their employers to increase withholdings from September to December 2014. This could reduce the amount the employees owe when they file their 2014 income tax and benefit return.
Employers are encouraged to discuss these changes with affected employees.

Important to note!

Speaking from personal experience, most Dynamics GP users with Canadian Payroll only install the year end and mid-year tax update service packs. If this describes your organization, please be aware of this:

  • This tax update is a chunk file (.cnk), not a regular service pack .msi format for instance.
  • You MUST be on the build numbers specified below for GP and Canadian Payroll before you install this chunk file. For users mentioned above, that means many organizations will have to update to the latest service pack first, and then install the chunk file second.

Dynamics GP2010 users:

  • You must be on version 11.00.2320 for GP, with a Canadian Payroll version of 11.00.2322 in order to install this tax update. If you’re already on this build, all you have to do is follow the instructions to install the chunk file on each GP workstation and you’re done!
  • If you haven’t installed a service pack since year end, you need to update first to the build above, and then install the chunk file.
  • Link to the most recent build is here (GP2010 service packs and compliance updates page)
  • Link to the GP2010 chunk file is here
  • There is no separate chunk file for a French install, there is one chunk file only

Dynamics GP2013 users:

This is a much bigger deal for users of GP2013 if you have not installed a service pack since year end. Why? GP2013 R2 was released in May, and is a huge update… not to scare anyone off, but this isn’t just your normal patch release so more thought likely is required to update your system to this latest build!  The great news is there are TONS of new features so you may as well take advantage of them!

  • You must be on version 12.00.1745 for GP, with a Canadian Payroll version of 12.00.1701 in order to install this tax update. If you’re already on this build, all you have to do is follow the instructions to install the chunk file on each GP workstation and you’re done!
  • If you haven’t installed a service pack since year end, you need to update first to the build above, and then install the chunk file.
  • Link to the most recent build is here (GP2013 service packs and compliance update page)
  • Link to the GP2013 chunk file is here
  • There is no separate chunk file for a French install, there is one chunk file only