To correctly report your Bill 124 retroactive payment in TurboTax, you will need to use Form T1198, Statement of Qualifying Retroactive Lump-Sum Payment, which should be provided by your employer. This form (or an equivalent letter from your employer) is crucial because it allows the Canada Revenue Agency (CRA) to perform a special tax calculation to prevent the lump sum from pushing you into a higher tax bracket in the year you received it.
In TurboTax, navigate to the section for entering tax slips and forms. Search for and select "T1198" or "Statement of Qualifying Retroactive Lump-Sum Payment".
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