Connolly Corporation, an Ontario organization, paid a $24,000.00 death benefit to Suzanne Knowles, the widow of their employee, Jerome Knowles, after he passed away in September.

Calculate the income tax withholding on the death benefit and complete the T4A for Suzanne.

Death benefits are taxed using the lump-sum tax rates; however, the first $10,000.00 of a death benefit is exempt from tax.

STEP	ACTION
1	Subtract $10,000.00 from the death benefit being paid to determine the taxable amount.
2	Look up the lumpsum income tax rate on the amount from Step 1.
3	Apply the income tax rate from Step 2 to the amount from Step 1 to calculate the income tax to withhold.
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