What does your Tax slip say?
The Canadian tax system administered by the Canada Revenue Agency (CRA) is based on self-reporting. The payers of various kinds of income are required to report the payments they make to various recipients using what CRA calls Tax Information Slips. The recipient tax-payers are then required to report their income to the CRA through a tax return by including a consolidated total of information from all of their Slips received from all sources on the return. This creates a system of checks and balances that assist in CRA’s administration of the Tax Collection activity.
Most common slips issued are as follows:
T4 – Statement of Remuneration Paid
This slip is commonly received by employees on payroll who receive employment income. It contains details of the total employment income earned in the year as well as the amounts towards Income Tax installments, Canada Pension Plan (CPP) contributions, Registered Pension Plan (RPP) Contributions, Employment Insurance (EI) premiums, Union dues and charitable donations paid by the employer through salary deductions.
T4A - Statement of Pension, Retirement, Annuity, and Other Income
This slip contains various kinds of income received by those who earn particular kinds of income for services performed. It is also the slip received by pension recipients. It contains information on items like pension, annuities, self-employed commissions, fees for services provided, lump-sum payments from non-registered investments, non-transferable lump-sum payments from RPPs and deferred profit-sharing plans (DPSP), and many other amounts not covered under the T4 slip above.
T5 - Statement of Investment Income
This slip contains information about investment income received from non-trust sources like corporation, banks or financial institutions. It includes eligible dividend, non-eligible dividend, capital gains dividends, interest received, royalties received, other income, foreign income and related foreign tax paid and annuity income.
T2202a – Tuition Enrollment Certificate
This slip is issued by the educational institutions. It shows the total amount of Tuition payments made during the year that are eligible for the Tuition credit that can be claimed on the individual tax return.
RRSP contribution receipt
To save tax, many individuals invest money in their Registered Retirement Savings Plans (RRSP)s. This slip is issued by the financial institution with which the investments were made. There are two contribution periods for every tax year.
The first period – the last 10 months of the year. This is usually March 2nd to December 31st of the year. It will be March 1st to December 31st in a leap year)
The second period – the first 60 days of the following year. This is usually January 1st to March 1st of the next year. It will be January 1st to February 29th in a leap year.
T5008 – Statement of Securities Transactions
This slip has details of all amounts paid based on sale of any securities (example shares or mutual funds). It sometimes contains information on the Adjusted Cost Base (ACB) of that same security. This ACB may be used to compute capital gains earned on those securities. However, it is always good to compute the ACB from investment statements received from the investment company or bank with which the investments are held while filing your tax return.
T3 – Statement of Trust Income Allocations and Designations
This slip details the various kinds of income included in a distribution received from Trust accounts. This includes distributions received from most Canadian Mutual Fund investments. The investment statement sometimes shows a consolidated amount as “distribution”. The T3 slips breaks those down into various types of income like Dividends, Capital Gains, other income, foreign business income & tax thereof, foreign non-business income and tax thereof and charitable donations eligible, etc. This slip also contains amounts that affect the cost base of the investments. The amount in this box will help in computing the ACB to compute the capital gains mentioned under T5008 above.
T5013 – Statement of Partnership Income
A partnership reports all its income on its information return which “passes through” to the individual partners and each partner receives a T5013 detailing the partnership income which needs to be included on their tax return.
Special T4 slips
T4A (OAS) – contains details of Old Age Security payments received from the government
T4A (P) – contains details of Canada Pension Plan payments received from the government & tax deducted
T4E – contains details of Employment Insurance payments received from the government & tax deducted along with a repayment rate (if an EI repayment is applicable).
T4RIF – contains details of income received from Registered Retirement Income Fund
T4RSP – contains detailed breakdowns of all amounts withdrawn from an RRSP. For example, Home Buyers plan withdrawal, Lifelong Learning Plan withdrawal, taxable withdrawals, Annuity payments, refund of excess contributions, refund of premiums and other income and deductions, etc.
T5007 – Statement of Benefits - This slip contains information about workers compensation benefits received, social assistance payments received and provincial or territorial supplements received.