2 – OVERVIEW & EXPLANATION OF TAX SLIPS

Table of Contents

1. Understanding the Slip System for Reporting Income on Your T1 Personal Tax Return
2. Reporting Information from T-Slips into Tax Software
3. The T4 Slip – The Statement of Employment Income
4. The T4A Slip – Statement of Pension, Retirement, Annuity, and Other Income
5. 🧾 The T4E Slip – Employment Insurance and Other Benefits
6. 🧾 The T5018 Slip – Statement of Contract Payments
7. 🧾 The T5007 Slip – Statement of Benefits (Social Assistance and Workers’ Compensation)
8. The T4A(P) and T4A(OAS) Slips – CPP and OAS Retirement Pension Slips
9. The T4RSP Slip – Statement of RRSP Income
10. The T4RIF Slip – Statement of Income from a Registered Retirement Income Fund (RRIF)
11. The T4FHSA Slip – Statement for the First Home Savings Account (FHSA)
12. The T3 Slip – Statement of Trust Income Allocations and Designations
13. The T5 Slip – Statement of Investment Income
14. The T5013 Slip – Statement of Partnership Income
15. The T5008 Slip – Statement of Securities Transactions
16. The T2202A Slip – Tuition and Enrolment Certificate
17. The Auto-Fill My Return Service Offered by the Canada Revenue Agency

Understanding the Slip System for Reporting Income on Your T1 Personal Tax Return

When preparing a Canadian personal income tax return (T1), one of the most important concepts to understand is the slip system. This system is the primary way the Canada Revenue Agency (CRA) tracks income and ensures taxpayers report all the money they’ve earned during the year.

📄 What is a Tax Slip?

A tax slip is a document issued by employers, financial institutions, or government agencies that shows income paid to an individual, as well as amounts withheld for taxes, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums.

Examples of common tax slips include:

1. Employment income slips (T4):
   • Issued by employers.
   • Shows salary, wages, bonuses, and any deductions for CPP, EI, or income tax.
2. Investment income slips (T5, T3):
   • Issued by banks, credit unions, or mutual fund companies.
   • Reports interest, dividends, and other investment earnings.
3. Retirement income slips (T4A, T4RIF, T4RSP):
   • Issued by the government or financial institutions.
   • Reports Canada Pension Plan (CPP) benefits, Old Age Security (OAS), Registered Retirement Savings Plan (RRSP) withdrawals, or Registered Retirement Income Fund (RRIF) income.
4. Other slips:
   • Tuition slips (T2202), social benefits (RC62, RC210 – older programs), or other government-issued income.

🔗 How the Slip System Works

The slip system is a check-and-balance system designed to ensure all income is reported and taxed correctly:

• Employers and financial institutions send copies of slips to the CRA.
• Taxpayers also receive a copy to report on their T1 return.
• CRA’s computer systems match the slips submitted by taxpayers to the slips received from employers and institutions.

If a taxpayer misses a slip on their return, the CRA will notice the discrepancy and issue a Notice of Reassessment, often including interest and penalties on the unreported income. This ensures taxpayers cannot simply “forget” to report income.

✅ Key Points for New Tax Preparers

1. Know your slips:
   • Understand what each slip represents and where the amounts flow on the tax return.
   • This knowledge is essential for advising clients and ensuring accurate returns.
2. Don’t rely solely on auto-fill services:
   • CRA offers an Auto-Fill My Return (AFR) service that imports slips directly from CRA records.
   • While convenient, AFR may not include all slips, especially if new slips were issued late or by certain institutions. Always verify with clients.
3. Understand slip origins:
   • Employment income comes from T4s.
   • Investment income comes from T5s or T3s.
   • Retirement income comes from T4As, T4RSPs, or T4RIFs.
   • Tuition and other benefits have their own specific slips.
4. Advisory role:
   • Being able to read and explain slips allows you to provide better guidance to clients.
   • Helps in planning for RRSP contributions, tuition transfers, or understanding taxable investment income.

💡 Bottom Line

The slip system is the backbone of the Canadian income reporting process. Every slip you receive is officially recorded with the CRA, making it essential to report everything accurately. As a tax preparer, knowing how slips work will help you prepare accurate returns, avoid reassessments, and give informed advice to your clients.

Reporting Information from T-Slips into Tax Software

When it’s time to prepare a Canadian income tax return, one of the most important steps is entering information from your T-slips into your tax software. These slips are official forms that summarize the income you earned and taxes you paid throughout the year. Common examples include:

• T4 – Statement of Employment Income
• T5 – Statement of Investment Income
• T3 – Statement of Trust Income
• T4A – Statement of Pension, Retirement, or Other Income

Each slip has multiple boxes showing amounts such as income, deductions, and tax withheld. As a tax preparer, your main responsibility is to accurately enter each box’s amount into the correct field in your software. Once you do that correctly, most modern tax programs automatically calculate everything else in the background.

How the Tax Software Uses Your T-Slips

Tax software is designed to handle the complex calculations that connect each T-slip to the right place on the tax return.

When you input information from a slip—such as income from employment or investment—the software will:

• Automatically transfer those numbers to the correct line on the T1 General Tax Return.
• Calculate related credits, such as Canada Pension Plan (CPP) or Employment Insurance (EI) contributions.
• Apply the correct tax rates, deductions, or credits, depending on the type of income reported.

For example:

• If you enter income from a T4, the software will place it under “Employment Income” on the tax return.
• If you enter dividends from a T5, it will automatically apply the dividend gross-up and calculate the dividend tax credit.

You don’t need to manually find where each box goes — the program does that part for you.

Why Understanding the Slips Still Matters

Even though tax software handles the calculations, it’s still essential to understand what each slip represents and how it affects the taxpayer’s overall situation.

Knowing why a number appears on a certain line or why it’s adjusted (for example, why dividends are “grossed up” or why capital gains are only 50% taxable) helps you:

• Detect data entry errors.
• Explain results to clients.
• Identify missing or incorrect slips.
• Develop confidence as a tax preparer.

In other words, the software does the math — but you provide the knowledge and accuracy.

Practical Tips for Working with T-Slips

• Check for all slips: Make sure you have all relevant slips for the taxpayer (employment, investments, pensions, etc.). Missing slips can lead to reassessments later.
• Match box numbers: Enter the amounts exactly as they appear in each box on the slip. Don’t round or estimate.
• Use the correct year: Always enter slips for the same tax year you’re filing for.
• Review the summary: Most tax software includes a summary page showing how the slips flow into the return — use this to confirm accuracy.

Practice Makes Perfect

If you’re just starting out, a great learning exercise is to take a sample or practice T-slip and manually enter its information into your software. Then, explore where those amounts appear on the tax return summary.

This hands-on approach helps you see how employment income, dividends, or deductions connect throughout the return. Over time, you’ll start to recognize how each type of slip influences total income, tax payable, and credits.

Key Takeaway

Entering T-slip information correctly is the foundation of accurate tax preparation. While software automates the calculations, your understanding ensures that the right numbers go in the right places — and that the final return truly reflects the taxpayer’s situation.

As you continue learning, you’ll explore each T-slip in more detail — understanding not just where to enter the data, but why it matters.

The T4 Slip – The Statement of Employment Income

If you’ve ever worked for an employer in Canada, chances are you’ve seen a T4 slip before. It’s one of the most common and important tax documents you’ll come across as a tax preparer. The T4, officially called the Statement of Remuneration Paid, is issued by employers to both employees and the Canada Revenue Agency (CRA) every year.

This slip summarizes how much a person earned from their job and how much was deducted for taxes and other contributions. Let’s take a closer look at what the T4 includes and why each part matters.

1. What the T4 Slip Represents

The T4 slip shows all amounts an employee received from their employer during the tax year that must be reported on their income tax return. This includes:

• Employment income – Total wages, salary, bonuses, and taxable benefits earned during the year.
• Deductions – Contributions and withholdings made by the employer, such as:
  • CPP contributions (Box 16) – Canada Pension Plan contributions help build retirement benefits.
  • EI premiums (Box 18) – Employment Insurance premiums protect workers in case they lose their job.
  • Income tax deducted (Box 22) – The total amount of federal and provincial tax withheld from paycheques.

These three boxes — 14, 16, 18, and 22 — appear on almost every T4 slip and form the foundation for calculating a taxpayer’s income and credits.

2. Common Additional Boxes on a T4

Besides the standard boxes, many T4s include extra information depending on the employee’s situation. For example:

• Box 44 – Union Dues – Deductions for membership in a union or professional association.
• Box 46 – Charitable Donations – Donations made through payroll deductions.
• Box 20 – RPP Contributions – Contributions made to a Registered Pension Plan.
• Box 52 – Pension Adjustment (PA) – Reflects the value of pension benefits earned, which affects the RRSP contribution limit.

These amounts don’t apply to every employee, but they are still important because they affect other parts of the tax return.

3. The “Other Information” Area

At the bottom of the T4 slip, there’s a section often labeled “Other information”. This area includes numbered boxes that report additional income or benefits that apply to specific employees.

Examples include:

• Box 40 – Other taxable benefits (such as employer-paid life insurance or personal use of a company vehicle)
• Box 34 – Personal use of employer’s automobile
• Box 38 – Security option benefits
• Box 42 – Commissions

It’s easy to overlook these smaller boxes, but they can significantly affect the return. For instance, a commission reported in Box 42 must be entered separately because employees who earn commissions may be entitled to claim additional employment expenses that regular employees cannot.

4. Understanding Box 14 and Box 40

One important detail for new preparers is how Box 40 (Other taxable benefits) relates to Box 14 (Employment income).

Amounts shown in Box 40 are already included in Box 14 — you don’t need to add them again. Think of Box 14 as a “total” for all employment income, including wages and most taxable benefits. The CRA includes Box 40 on the T4 mainly for informational purposes and to show which portion of income came from benefits rather than wages.

5. Why Accuracy Matters

When preparing a tax return, it’s crucial to review every box on the T4 slip. Many new preparers focus only on the main boxes at the top and forget to check the “Other information” section at the bottom. Missing one of these boxes — especially one with a taxable benefit — can lead to underreporting income.

The CRA matches every T-slip it receives with the taxpayer’s return. If something is missing, the CRA’s system will detect it, and the taxpayer may receive a reassessment or even penalties later.

6. Tips for Handling T4 Slips

• Always use the slip for the correct tax year. If the slip says “2024,” it must be reported on the 2024 return.
• Double-check all boxes, even blank ones. Some boxes might be intentionally empty — others might contain data further down the page.
• Cross-reference totals. Ensure the income on the T4 matches what the taxpayer remembers earning.
• Look out for multiple slips. People with more than one job will have multiple T4s, and all of them must be entered.

7. The Bigger Picture

The T4 slip is the foundation of most Canadians’ tax returns. It summarizes a person’s earnings, deductions, and benefits — all of which flow directly into the T1 General tax return.

As a tax preparer, your job isn’t just to copy numbers into the software. It’s to understand what each number means, recognize which boxes apply, and ensure nothing important is missed.

By learning the structure of the T4 slip now, you’re building the foundation for more complex income types you’ll encounter later — such as commissions, stock options, and pension adjustments.

Key Takeaway

The T4 slip tells the story of a taxpayer’s employment income for the year. Knowing how to read it carefully — especially the “Other information” section — is one of the most essential skills for anyone starting out in Canadian tax preparation.

When in doubt, review every box, understand what it represents, and remember: accuracy on the T4 means accuracy on the entire tax return.

The T4A Slip – Statement of Pension, Retirement, Annuity, and Other Income

The T4A slip is one of the most versatile and wide-ranging tax slips in Canada. Its official title is the “Statement of Pension, Retirement, Annuity, and Other Income”, and it’s often referred to as a catch-all slip.

While the T4 is mainly used for employment income, the T4A reports many different kinds of income that don’t fit neatly into other categories. You’ll encounter it frequently as a tax preparer, since it covers pensions, commissions, scholarships, and several other types of payments.

1. What the T4A Slip Is Used For

The T4A is issued by organizations, employers, pension plans, schools, or financial institutions to report various payments made to individuals. It’s designed to capture taxable amounts that don’t belong on a T4, T5, or any other standard slip.

Some of the most common reasons a T4A slip is issued include:

• Pension income (Box 16) – Payments from company or government pension plans (e.g., retired teachers, government employees, corporate pensioners).
• Annuities and retirement income – Regular income from retirement plans or annuity contracts.
• Self-employed commissions (Box 20) – Used for real estate agents, mortgage brokers, and other independent contractors who earn commission income.
• Scholarships, grants, and bursaries (Box 105) – Payments made to students by colleges or universities.
• RESP withdrawals (Box 042) – The taxable portion of funds withdrawn from a Registered Education Savings Plan (RESP).
• Death benefits (Box 106) – Certain payments made after someone’s passing.

In short, if a payment is taxable but doesn’t clearly fit under another slip type, it often appears on a T4A.

2. Why It’s Sometimes Called a “Catch-All Slip”

The T4A covers such a wide variety of income sources that it’s often called the catch-all slip. The Canada Revenue Agency (CRA) designed it this way to simplify reporting — instead of creating dozens of different forms, one slip can report many kinds of income.

For this reason, T4A slips can look different from one another. Some are issued by employers (for pensions or commissions), others by universities, and others by financial institutions. Even though the layout might vary, the box numbers and labels are consistent across all versions, so you can always identify what type of income is being reported.

3. The Most Common Boxes on the T4A Slip

While there are many boxes that can appear on a T4A, here are the ones you’ll see most often:

Box Number	Description	Typical Situation
016	Pension or superannuation	Regular pension payments after retirement
020	Self-employed commissions	Real estate or mortgage brokers, sales agents
022	Income tax deducted	Federal/provincial tax withheld from the payment
042	RESP educational assistance payments	Students withdrawing funds from an RESP
105	Scholarships, bursaries, or research grants	Payments to post-secondary students
106	Death benefits	Payments to a beneficiary after a death
107	Payments from a registered disability savings plan (RDSP)	For RDSP beneficiaries

Not all boxes will appear on every T4A — they depend on the individual’s circumstances.

4. How the T4A Relates to the Tax Return

Each box on the T4A corresponds to a specific line on the individual’s T1 General Tax Return. For example:

• Pension income (Box 16) is reported on the pension income line.
• Commissions (Box 20) are reported as business income, not employment income, and require additional reporting on a T2125 – Statement of Business or Professional Activities form.
• Scholarships or bursaries (Box 105) are reported as other income, though in many cases they may be partially or fully tax-exempt depending on the student’s program and enrollment status.

Understanding what each box represents helps you choose the correct reporting section on the tax return — a key skill for any tax preparer.

5. What to Watch Out For

Because the T4A covers such a wide range of income types, new preparers often make mistakes by treating all boxes the same way. Here are some important reminders:

• Not all T4A income is taxed the same way. Some amounts, like scholarships, may be fully exempt depending on the situation.
• Always check the box numbers. Two T4A slips might look similar but report completely different income types.
• Commissions (Box 20) indicate self-employment, not employment — this changes how income and expenses are reported.
• Tax deducted (Box 22) should be entered so the taxpayer gets credit for income tax already paid.
• Keep an eye on duplicates. A person might receive multiple T4A slips from different payers. All must be entered.

6. Real-World Examples

Here are some simple examples to illustrate when a T4A is used:

• Example 1:
  Maria retired from her job with a manufacturing company. She now receives monthly pension payments.
  → She’ll get a T4A showing her annual pension income in Box 16.
• Example 2:
  David is a real estate agent who earned commissions from his brokerage.
  → His brokerage will issue a T4A showing self-employed commissions in Box 20.
• Example 3:
  Amira received a scholarship from her university for academic excellence.
  → She’ll receive a T4A with the amount in Box 105.

7. Key Takeaways

• The T4A slip reports a wide variety of taxable income that doesn’t fit under the T4 or other slips.
• It’s sometimes called the “catch-all” slip because of its flexibility.
• Box 16 (Pension) and Box 20 (Commissions) are among the most common.
• Carefully review which box numbers are used and understand how each affects the tax return.
• Some amounts reported on a T4A, such as scholarships, may be partially or fully exempt from tax.

In Summary

The T4A slip is one of the most important documents for a tax preparer to understand. It appears in many forms — pensions, self-employment commissions, RESP withdrawals, and scholarships — but the key is to identify what each box represents and ensure it’s reported correctly.

With experience, you’ll start recognizing patterns and understanding how each T4A connects to different parts of the tax return. Mastering this slip is a big step toward becoming a confident, accurate Canadian tax preparer.

🧾 The T4E Slip – Employment Insurance and Other Benefits

When preparing Canadian income tax returns, one of the most common slips you might come across—especially during times of job transition—is the T4E slip, officially called the Statement of Employment Insurance and Other Benefits.

This slip is issued by Service Canada to anyone who received Employment Insurance (EI) benefits during the year. These benefits can include regular EI payments after a layoff, maternity or parental leave benefits, or other forms of government support provided through the EI system.

💡 What Does the T4E Slip Report?

The T4E slip provides a summary of the total EI benefits an individual received and the income tax that was withheld from those payments.

Each box on the slip has a specific meaning. The most important ones to pay attention to are:

Box Number	Description	What It Means
Box 14	Total Benefits Paid	The total amount of Employment Insurance and other benefits you received during the year. This amount is taxable income.
Box 22	Income Tax Deducted	The amount of federal and provincial income tax withheld from your EI payments. This amount is credited toward your overall tax payable.
Other Information	Repayment or Special Notes	If you had to repay some EI benefits or had special benefit types, details appear in this section.

💰 Are Employment Insurance Benefits Taxable?

Yes — EI benefits are considered taxable income in Canada.
This means that when you file your income tax return, the total amount in Box 14 must be added to your overall income for the year.

Your T4E slip helps the Canada Revenue Agency (CRA) determine how much tax you owe (or how much you overpaid).

⚖️ Why Some People Owe Tax on EI Benefits

Here’s something many first-time filers don’t realize:
The income tax withheld from EI benefits (Box 22) is often less than what’s actually owed once the total income is calculated.

That’s because the EI system withholds a standard tax rate, which may not reflect your true income level for the year. So, when someone files their return, they may discover they owe additional tax — especially if they had another job during the same year.

For example:

If someone received $5,000 in EI benefits but only $500 was withheld for taxes, they might find they owe more when filing their return if their total annual income places them in a higher tax bracket.

🔁 The Repayment Rate

Some individuals may be required to repay part of their EI benefits if their total income for the year exceeds a certain threshold.
This repayment rule usually applies to higher-income earners who received regular EI benefits. The exact repayment amount depends on the person’s total net income and the amount of EI received.

While most entry-level tax preparers don’t need to calculate this manually, it’s useful to understand that this repayment is automatically determined when the return is filed — and it’s based on income reported throughout the year.

🧠 Key Takeaways for New Tax Preparers

1. Always include the T4E slip when preparing a client’s return if they received Employment Insurance benefits.
2. Check both Box 14 and Box 22 carefully — missing the income tax deducted is a common beginner mistake.
3. EI benefits are taxable, and clients might owe more tax if too little was withheld during the year.
4. Repayments, if required, are handled automatically once all income information is entered on the tax return.
5. Keep records — CRA may request supporting documents if amounts seem inconsistent.

🪄 Example Scenario

Let’s imagine Jane, who was laid off for a few months in 2024.
She received $8,000 in EI benefits and had $600 of tax deducted during that time. Later in the year, she found a new job and earned another $40,000 in employment income.

When Jane files her tax return:

• Her total income is $48,000 (including EI benefits).
• Her EI benefits ($8,000) are fully taxable.
• Because only $600 tax was withheld on her EI payments, she may owe some additional tax when everything is added together.

This is completely normal — and something you should be prepared to explain to clients.

✅ Summary

The T4E slip plays an important role in reporting Employment Insurance and other taxable benefits.
While the information it contains is simple, understanding its impact on the overall tax return helps new tax preparers ensure accuracy — and helps clients avoid surprises at tax time.

🧾 The T5018 Slip – Statement of Contract Payments

When preparing Canadian income tax returns, one of the lesser-known slips you might encounter is the T5018 – Statement of Contract Payments. While it’s not as common as other slips like the T4 or T4A, it’s especially important for people working in the construction industry or related trades.

This slip was introduced by the Canada Revenue Agency (CRA) to help reduce unreported income and combat the underground economy—a frequent issue in construction and contracting work.

🏗️ What Is the T5018 Slip?

The T5018 is used to report payments made by one contractor to another contractor for construction services.

For example:

• A general contractor hires a drywall installer to work on a project and pays them $5,000.
• The general contractor must report this payment to the CRA by issuing a T5018 slip.
• The drywall installer, who received the payment, must report that amount as business income on their tax return.

The purpose is simple: to make sure all subcontractors report the income they earned, and to ensure transparency in the construction industry.

🧰 Who Receives a T5018 Slip?

You’ll typically see this slip in the hands of:

• Independent contractors working in the construction field (electricians, plumbers, drywallers, roofers, painters, etc.).
• Small business owners or self-employed individuals who do subcontract work.
• Occasionally, larger firms that subcontract out specialized parts of a project.

If someone receives a T5018 slip, it means they were paid for contract work, not as an employee. Therefore, this income is treated as business income, not employment income.

📦 Key Box on the T5018 Slip

The T5018 slip is much simpler than other income slips — it mostly contains one important box:

Box Number	Description	What It Means
Box 22	Total Payments for Construction Services	The total amount paid to the contractor for their work. This amount must be reported as gross business income.

Unlike a T4, there are no deductions (like CPP, EI, or income tax) shown on this slip. That’s because contractors are responsible for handling their own taxes — including income tax, CPP contributions, and any business expenses.

💼 How Is the T5018 Slip Reported on a Tax Return?

If you receive a T5018 slip, it means you were operating as a self-employed individual or independent contractor.
That means the income must be reported as part of your business income on your personal tax return.

Specifically, this income is reported on the Statement of Business or Professional Activities (CRA Form T2125).

On that form, you would:

1. Report the total income from all T5018 slips (plus any other business income not on a slip).
2. Deduct business expenses (such as materials, vehicle costs, tools, or advertising).
3. Calculate your net business income, which will be included in your total taxable income.

⚠️ Important Notes for New Tax Preparers

1. You may not always receive a copy of the T5018 slip.
   Businesses that issue T5018s must file them with the CRA but are not required to send a copy to the contractor.
   So if your client works in construction, always ask them to track all payments received—not just those shown on slips.
2. The T5018 doesn’t show expenses.
   It only lists income received. Contractors must keep their own records of expenses throughout the year to claim deductions.
3. It applies only to the construction industry.
   Other industries (like IT, consulting, or retail) typically don’t use this slip.
4. The slip represents business income, not employment income.
   So no source deductions (like tax or CPP) are withheld. Contractors are responsible for remitting their own taxes.
5. Multiple T5018 slips = multiple clients.
   If a contractor worked for several companies during the year, they might have more than one T5018.
   All must be included in their total business income.

🧮 Example Scenario

Let’s say ACE Drywall Services worked for Total Solutions Contracting Inc. during the year and received a T5018 slip showing $17,850 in Box 22.

Here’s what happens:

• ACE Drywall must include the $17,850 as part of their total business income for the year.
• They’ll then subtract expenses (e.g., tools, supplies, fuel, insurance) to determine their net income.
• The net income is what gets taxed when they file their personal income tax return.

If ACE Drywall had additional clients who didn’t issue a T5018, that income still needs to be added manually, since not all contract payments are reported on slips.

🧠 Quick Recap

Key Point	Summary
Purpose of the Slip	To report payments made to contractors in the construction industry.
Issued By	Contractors or companies that hire other contractors.
Issued To	Subcontractors or self-employed construction workers.
Main Box	Box 22 – Total payments received.
Tax Treatment	Reported as business income (on Form T2125).
Common Mistake	Forgetting to report income if no T5018 slip was received.

✅ Summary

The T5018 – Statement of Contract Payments is an important slip for anyone in the construction industry who works as an independent contractor or subcontractor.
It helps ensure all income is properly reported to the CRA and keeps the industry transparent.

As a new tax preparer, remember:

• Always check if your client worked in construction.
• Ask for all T5018 slips and total income records.
• Report the amounts as business income and deduct eligible expenses.

Understanding this slip is a small but vital step toward confidently handling tax returns for self-employed Canadians.

🧾 The T5007 Slip – Statement of Benefits (Social Assistance and Workers’ Compensation)

The T5007 – Statement of Benefits is an important tax slip issued to individuals who receive social assistance payments or workers’ compensation benefits in Canada.
Even though these payments are not taxable, they must still be reported on your income tax return.

This slip ensures transparency and allows the Canada Revenue Agency (CRA) to correctly calculate government benefits and credits such as the GST/HST Credit or Canada Child Benefit.

💡 What Is the T5007 Slip?

The T5007 slip reports non-taxable income that comes from certain government programs designed to support individuals in financial need.

You might receive a T5007 if you:

• Collected social assistance payments from a provincial or municipal program.
• Received workers’ compensation benefits because of a workplace injury.
• Were part of a provincial or federal social security program that paid benefits during the year.

Although these payments are not taxed, they still need to appear on your tax return for informational purposes. The CRA uses them to determine your net income for benefits (which can affect eligibility for income-tested credits).

🧍 Who Receives a T5007 Slip?

You might receive this slip if:

• You received financial help from a social services agency (for example, Ontario Works, BC Employment and Assistance, or other provincial programs).
• You were paid workers’ compensation benefits through your province’s workers’ compensation board (e.g., WSIB in Ontario, WCB in Alberta).
• You received any social assistance payments made under federal or provincial law.

These payments are often given to individuals or families who face financial hardship or who cannot work due to injury or disability.

📦 Key Boxes on the T5007 Slip

Here are the main boxes you’ll find on the T5007 slip:

Box Number	Description	What It Represents
Box 10	Workers’ Compensation Benefits	Total amount of workers’ compensation benefits received during the year.
Box 11	Social Assistance Payments	Total amount of social assistance or welfare payments received.

You might see only one of these boxes filled in—depending on which type of benefit you received.

🧾 How Is the T5007 Reported on the Tax Return?

Although social assistance and workers’ compensation are non-taxable, the CRA still requires them to be reported as income.

Here’s how it works:

1. The amount from Box 10 or Box 11 is added to your total income.
2. The same amount is deducted later on the tax return so that it’s not taxed.

In other words, it appears on your return but doesn’t increase your taxable income.
This reporting process ensures the CRA has a complete record of all government payments you received.

⚖️ Why Is It Reported If It’s Non-Taxable?

This often confuses new tax preparers — if it’s not taxable, why include it?

The reason is that the CRA uses net income (not taxable income) to determine whether you qualify for:

• The GST/HST credit
• The Canada Child Benefit
• The Guaranteed Income Supplement
• Other income-tested benefits or tax credits

Because social assistance and workers’ compensation are part of your overall financial situation, they need to appear on the return even though you don’t pay income tax on them.

🧮 Example Scenario

Let’s imagine Sarah received $6,800 in social assistance during the year.

Her T5007 slip shows:

• Box 11: $6,800
• Box 10: (blank)

Here’s what happens on her tax return:

1. The $6,800 is added to her total income on the income section.
2. The same $6,800 is subtracted later as a deduction, ensuring she pays no tax on it.
3. The amount still appears in her records so that the CRA knows she received assistance that year.

As a result, Sarah reports the payment but doesn’t owe any tax on it.

🧭 Important Notes for New Tax Preparers

1. Not all government payments go on a T5007.
   Only social assistance and workers’ compensation benefits are reported here.
   Other benefits like Employment Insurance (EI) or the Canada Pension Plan (CPP) are reported on different slips (T4E and T4A, respectively).
2. The T5007 amount is not taxable.
   Always remember: while it’s included in income, an equal deduction is applied, resulting in no tax being paid.
3. Make sure to include it.
   Even though it’s non-taxable, forgetting to report the slip can cause the CRA to reassess the return, since they already receive a copy of every T5007 issued.
4. Usually issued to one spouse only.
   If both spouses or partners benefit from social assistance payments, the T5007 is generally issued to only one of them, usually the one whose name is on the assistance file.
5. Workers’ compensation payments are treated the same way.
   Whether it’s WSIB in Ontario or another provincial board, the income is added and then deducted in full.

🧠 Quick Recap

Key Point	Summary
Slip Name	T5007 – Statement of Benefits
Issued To	Individuals who receive social assistance or workers’ compensation benefits
Key Boxes	Box 10 – Workers’ Compensation; Box 11 – Social Assistance
Taxable?	No, these amounts are added to income but deducted later
Purpose	Helps CRA calculate eligibility for income-tested benefits
Common Mistake	Forgetting to include the slip because the income is non-taxable

✅ Summary

The T5007 slip is straightforward but important. It’s used to report social assistance or workers’ compensation benefits received during the year.
Although these payments are not taxable, they must still be included on the tax return to ensure that the CRA can correctly assess benefits and credits.

As a new tax preparer, remember:

• Always include T5007 slips in a client’s return.
• Understand that these amounts don’t increase taxable income.
• Be ready to explain to clients that reporting this slip doesn’t mean they’ll pay tax on it — it’s simply for information and calculation of benefits.

The T4A(P) and T4A(OAS) Slips – CPP and OAS Retirement Pension Slips

As Canadians enter retirement, many begin receiving income from government pension programs. Two of the most common tax slips related to retirement income are the T4A(P) (Statement of Canada Pension Plan Benefits) and the T4A(OAS) (Statement of Old Age Security Benefits).

These slips are essential for reporting pension income accurately when preparing a personal income tax return. Let’s look at what each slip represents, who receives them, and how the information is used when completing a return.

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🧾 The T4A(P) – Statement of Canada Pension Plan Benefits

The T4A(P) slip is issued to individuals who receive payments under the Canada Pension Plan (CPP). This program provides income replacement to Canadians who have contributed to CPP during their working years.

Who Receives a T4A(P) Slip?

Most recipients are Canadians aged 60 or older who have started receiving their CPP retirement benefits.
However, it’s also possible for younger individuals to receive this slip. For example:

• A surviving spouse or child may receive CPP survivor benefits.
• A dependent child may receive CPP children’s benefits if a parent has passed away or is disabled.

In these cases, the presence of a T4A(P) slip for someone under 60 is completely normal—it simply reflects a different type of CPP benefit.

Key Boxes on the T4A(P)

• Box 20 – Taxable CPP Benefits: This shows the total amount of taxable benefits received during the year.
• Box 21 – Number of Months: Indicates the number of months the benefits were paid.
• Other boxes – May include information about different categories of CPP benefits (retirement, survivor, child, disability, etc.).
• Income Tax Deducted – If any tax was withheld from CPP payments, that amount will appear here.

Keep in mind that many CPP recipients have no income tax deducted from their payments, unless they specifically request it. This means that when they file their tax return, tax may still be owing.

How It’s Reported on the Tax Return

The total from Box 20 of the T4A(P) slip is included as pension income on the tax return (Line 11400).
CPP benefits are fully taxable—there is no exemption or clawback based on income.

🧾 The T4A(OAS) – Statement of Old Age Security Benefits

The T4A(OAS) slip is issued to individuals who receive Old Age Security (OAS) payments. The OAS program is a federal benefit available to most Canadians aged 65 and older, provided they meet the residency requirements.

Who Receives a T4A(OAS) Slip?

Anyone receiving Old Age Security payments will receive this slip, typically seniors aged 65 or older. Unlike CPP, which is based on contributions made during a person’s working years, OAS is funded through general tax revenues and does not depend on past employment or earnings.

Key Boxes on the T4A(OAS)

• Box 18 – Taxable OAS Benefits: This shows the total Old Age Security payments received.
• Income Tax Deducted – Shows any tax withheld from OAS payments (though many recipients may not have much withheld).
• Other boxes – May contain information about OAS repayments or adjustments if applicable.

How It’s Reported on the Tax Return

The amount in Box 18 is reported as OAS pension income on the tax return (Line 11300). Like CPP, OAS is fully taxable.

However, OAS has a special rule called the OAS Clawback (also known as the OAS Recovery Tax). If a taxpayer’s net income exceeds a certain threshold—approximately $75,000 to $80,000 (adjusted annually)—they may have to repay part or all of their OAS benefits. This repayment is automatically calculated by the Canada Revenue Agency (CRA) based on the individual’s income level.

⚖️ Summary of Key Differences

Feature	T4A(P) – CPP	T4A(OAS) – OAS
Program Type	Contribution-based (paid into during working years)	Government-funded (based on residency)
Typical Age	60+ (can start early or for survivors/children)	65+
Taxable?	Fully taxable	Fully taxable
Clawback?	No clawback	Subject to OAS clawback above income threshold
Common Boxes	Box 20 – CPP Benefits, Box 21 – Months	Box 18 – OAS Benefits
Reported On Return	Line 11400	Line 11300

💡 Key Takeaways for New Tax Preparers

• Both the T4A(P) and T4A(OAS) slips represent taxable pension income that must be reported on the tax return.
• CPP income is earned through contributions, while OAS is a social benefit based on age and residency.
• Always check for income tax withheld on these slips—many clients overlook it.
• Be aware of the OAS clawback for higher-income seniors.
• Even though these are straightforward slips, accuracy is important since they form a core part of many retirees’ annual income.

The T4RSP Slip – Statement of RRSP Income

The T4RSP slip (Statement of RRSP Income) is issued by a financial institution whenever money is withdrawn or paid out from a Registered Retirement Savings Plan (RRSP).

While RRSPs are designed to help Canadians save for retirement and grow their investments tax-deferred, any withdrawal from an RRSP is considered taxable income. This slip tells both the taxpayer and the Canada Revenue Agency (CRA) how much was withdrawn and how much tax, if any, was withheld.

🏦 What Is an RRSP?

A Registered Retirement Savings Plan (RRSP) is a government-registered account that allows Canadians to:

• Contribute a portion of their income (within annual limits),
• Grow investments tax-free until withdrawal, and
• Deduct contributions from taxable income to reduce taxes owed in the year of contribution.

The key point to remember is that taxes are deferred, not eliminated. When money is eventually withdrawn from the RRSP, it becomes taxable income in that year.

That’s where the T4RSP slip comes in — it reports those withdrawals.

💬 When Is a T4RSP Slip Issued?

You’ll receive a T4RSP slip any time a transaction occurs that involves taking money out of an RRSP. Common situations include:

1. Regular RRSP Withdrawals
   • When someone close to retirement starts taking money out of their RRSP before converting it into a Registered Retirement Income Fund (RRIF).
   • These withdrawals are fully taxable and reported on the T4RSP.
2. Early Withdrawals (Before Retirement)
   • Sometimes individuals withdraw from their RRSPs early due to financial hardship, unemployment, or emergencies.
   • Even if the person is not retired, the withdrawn amount is still taxable and will be shown on the T4RSP slip.
3. Special Programs
   • Withdrawals made under the Home Buyers’ Plan (HBP) or the Lifelong Learning Plan (LLP) are also reported on this slip, in their specific boxes.
4. Transfers After Death
   • If an RRSP account is transferred or paid out after the death of a taxpayer (for example, to a surviving spouse), this is also reported on a T4RSP slip.

📋 Key Boxes on the T4RSP Slip

Here are some of the most common boxes you’ll see on this form and what they mean:

Box Number	Description	What It Means
Box 22	Amounts Withdrawn	Total taxable withdrawals or payments from the RRSP.
Box 25	Withdrawals under the Lifelong Learning Plan (LLP)	Amount taken for education purposes under the LLP.
Box 27	Withdrawals under the Home Buyers’ Plan (HBP)	Amount taken to buy or build a qualifying home.
Box 30	Income Tax Deducted	Tax withheld by the financial institution at the time of withdrawal.
Other Boxes	Annuity payments, refunded premiums, or transfers	Used in special cases such as deceased taxpayers or transferred accounts.

💰 Tax Withholding and Reporting

When funds are withdrawn from an RRSP, the financial institution usually withholds tax right away.
The withholding rates depend on how much is withdrawn:

Amount Withdrawn	Tax Withheld (approx.)
Up to $5,000	10% (5% in Quebec)
$5,001 – $15,000	20% (10% in Quebec)
Over $15,000	30% (15% in Quebec)

However, this withholding is not necessarily the final tax owed. The actual tax is determined when the individual files their income tax return for the year. Depending on their total income, they may owe more tax or receive a refund.

🧾 How the T4RSP Slip Is Used in a Tax Return

The amounts reported on a T4RSP slip are added to the taxpayer’s total income for the year.
RRSP withdrawals are included as “RRSP income” on the personal tax return (Line 12900 on the T1).

The income tax deducted (Box 30) is also claimed as a credit toward taxes already paid, helping reduce the amount of tax owing.

👩‍🏫 Example

Let’s say Mary, age 45, withdraws $10,000 from her RRSP to cover personal expenses.

• Her financial institution withholds $2,000 in income tax.
• Mary receives a T4RSP slip showing:
  • Box 22: $10,000
  • Box 30: $2,000

When filing her tax return, Mary reports the $10,000 as income. The $2,000 withheld is applied as a tax credit. If her total income for the year puts her in a higher tax bracket, she may still owe additional tax.

🧠 Key Takeaways for New Tax Preparers

• The T4RSP slip reports taxable withdrawals from an RRSP.
• RRSP income is fully taxable in the year it’s withdrawn.
• Withholding tax may not cover the full tax owed, especially for higher-income clients.
• Early withdrawals before retirement are also taxable, except for specific programs like HBP or LLP (which have their own repayment rules).
• Always check Box 30 for tax deducted and ensure it’s correctly applied to the return.

⚙️ In Summary

Concept	Description
Purpose of Slip	Reports RRSP withdrawals and related taxes
Issued By	Financial institutions
Taxable?	Yes, all RRSP withdrawals are taxable
Reported On Return	Line 12900 – RRSP Income
Common Boxes	Box 22 (Withdrawals), Box 30 (Tax Withheld)

The T4RIF Slip – Statement of Income from a Registered Retirement Income Fund (RRIF)

When you prepare Canadian income tax returns, you’ll often come across various tax slips that report different types of income. One of these is the T4RIF slip, which reports income from a Registered Retirement Income Fund (RRIF).

What Is a RRIF?

A Registered Retirement Income Fund (RRIF) is essentially the next step after a Registered Retirement Savings Plan (RRSP).
Think of it like this:

• During a person’s working years, they contribute money into an RRSP to save for retirement.
• Once they reach age 72, they are required by the Canada Revenue Agency (CRA) to convert their RRSP into a RRIF.
• After that, the person must begin withdrawing a minimum amount from their RRIF each year.

These withdrawals count as taxable income, just like salary or pension income, and must be reported on their income tax return.

Purpose of the T4RIF Slip

The T4RIF slip is issued by the financial institution that manages the RRIF.
It reports:

• How much money was withdrawn from the RRIF during the year, and
• How much income tax (if any) was withheld at source.

The taxpayer will receive this slip early in the following year (usually by the end of February) and must use it when filing their personal tax return.

Key Boxes on the T4RIF Slip

Here’s what the important boxes mean on a typical T4RIF slip:

• Box 16 – Income amount: This shows the total amount of money withdrawn from the RRIF during the year. This is the main income figure you’ll enter on the tax return.
• Box 28 – Tax deducted: If the financial institution withheld any tax when the money was paid out, that amount will appear here. This tax is already paid toward the taxpayer’s overall tax owing.
• Box 18 and 20 – Amounts on death: These boxes are used when the RRIF owner has passed away. In that situation, the full value of the RRIF is usually considered to have been withdrawn on the date of death, and the income must be reported on the deceased person’s final tax return.
• Box 26 – Spousal RRIF indicator: This box shows “Yes” if the RRIF is a spousal RRIF (meaning it was created using funds transferred from a spousal RRSP). For most personal tax returns, this box is just for reference and doesn’t change how you report the income.

Where to Report the RRIF Income

The amount from Box 16 of the T4RIF slip is reported on Line 11500 (Other pensions and superannuation) of the T1 General Income Tax Return.
Any tax deducted (Box 28) is included in the total income tax already paid, which is credited on the tax return.

Special Note: When the RRIF Holder Passes Away

If you are preparing a tax return for someone who has passed away, pay close attention to any T4RIF slips issued in that year.
When the RRIF holder dies, the CRA considers all remaining funds in their RRIF to be deemed withdrawn at fair market value on the date of death.
This amount will appear on the T4RIF slip and must be reported on the final return (also called the terminal return) of the deceased.

There may also be opportunities to transfer the RRIF to a surviving spouse or a financially dependent child on a tax-deferred basis, but that is handled through specific forms and rules (which you’ll learn later as you progress in your tax training).

Summary

Key Point	Explanation
Slip Name	T4RIF – Statement of Income from a Registered Retirement Income Fund
Issued By	The financial institution that manages the RRIF
Main Boxes	Box 16 (Income), Box 28 (Tax deducted), Box 18 & 20 (Amounts on death), Box 26 (Spousal indicator)
Reported On	Line 11500 – Other pensions and superannuation
Common Situations	Annual RRIF withdrawals, or RRIF income after death

Beginner Tip 💡

When reviewing a client’s tax documents, look for T4RIF slips among their other income slips (like T4, T4A, or T5).
If the person is over 72 or you’re handling a return for someone who has passed away, it’s very likely you’ll see this slip.

The T4FHSA Slip – Statement for the First Home Savings Account (FHSA)

The T4FHSA slip is one of the newest tax slips introduced in Canada. It reports transactions related to the First Home Savings Account (FHSA) — a registered savings plan designed to help Canadians save for their first home.

This slip first appeared for the 2023 tax year. You won’t see it on any tax returns before that because the FHSA program only began in 2023.

What Is a First Home Savings Account (FHSA)?

The First Home Savings Account (FHSA) combines some of the best features of two other popular savings plans — the RRSP and the TFSA:

• Like an RRSP, contributions to an FHSA are tax-deductible, meaning they reduce your taxable income and can lower your income tax.
• Like a TFSA, withdrawals can be tax-free — but only if the money is used to buy your first qualifying home.

In other words:

• You can contribute money and claim a deduction on your tax return.
• Later, you can withdraw that money tax-free to buy your first home.

If, however, the funds are not used to buy a qualifying home, the withdrawal becomes taxable income and must be reported on the tax return.

What the T4FHSA Slip Reports

The T4FHSA slip is issued by the financial institution where the FHSA account is held. It provides a record of all major transactions in the account for the year.

The main boxes on the slip include:

• Box 18 – Contributions:
  This shows how much the taxpayer contributed to their FHSA during the year. These contributions are deductible on their tax return, similar to RRSP contributions.
• Withdrawals and Transfers:
  The slip will also show any money withdrawn or transferred between the FHSA and other registered accounts (like an RRSP).
  • Qualifying withdrawals — if the person bought a qualifying home — are tax-free.
  • Non-qualifying (taxable) withdrawals — if the funds were used for another purpose or the home purchase did not occur — are taxable and must be reported as income.
• Transfers:
  Sometimes, money can be transferred between an FHSA and an RRSP or RRIF. These transfers are reported so that both the CRA and the taxpayer can track contribution limits and balances correctly.

Why the T4FHSA Slip Matters

This slip is important for both the tax preparer and the Canada Revenue Agency (CRA) because it keeps track of:

• The total amount contributed to the FHSA (to ensure contribution limits aren’t exceeded).
• The amounts withdrawn or transferred, and whether they were taxable or tax-free.
• Any deductions that the taxpayer is entitled to claim.

For the CRA, this slip helps them maintain accurate records of each taxpayer’s FHSA balance and eligibility.

When You’ll See a T4FHSA Slip

A taxpayer will receive a T4FHSA slip if they:

• Made contributions to their FHSA during the year,
• Withdrew money from their FHSA, or
• Transferred funds to or from another registered account.

The slip is usually sent by the financial institution by the end of February following the tax year, just like most other tax slips.

Where the Information Is Reported on the Tax Return

Although the specific line numbers can vary depending on the tax year, here’s the general idea:

• Contributions (Box 18) are deducted on the tax return — similar to RRSP deductions.
• Taxable withdrawals are added as income.
• Qualifying withdrawals for a first home purchase are not taxable.

You’ll need to make sure that the contribution and withdrawal amounts are correctly reported in the right section of the return, based on whether the transactions were qualifying or non-qualifying.

Beginner Tip 💡

If a client mentions they opened a First Home Savings Account, always look for a T4FHSA slip among their tax documents.
Check:

• Whether contributions were made (deductible amount), and
• Whether any withdrawals took place (taxable or non-taxable).

It’s also good to confirm if they actually purchased a qualifying home, since that determines whether the withdrawal is tax-free or taxable.

Summary Table

Key Point	Explanation
Slip Name	T4FHSA – Statement of First Home Savings Account transactions
Introduced In	2023 tax year
Issued By	The financial institution where the FHSA is held
Main Boxes	Box 18 (Contributions), plus boxes for withdrawals and transfers
Reported On	Contributions are deducted; taxable withdrawals are added to income
Tax-Free When	Funds are used for buying a qualifying first home
Taxable When	Funds are withdrawn for any other purpose

In Simple Terms

The T4FHSA slip helps both taxpayers and the CRA keep track of how much money was put into, taken out of, or moved around in the First Home Savings Account.
As a tax preparer, your job is to identify:

• Whether contributions qualify for a deduction, and
• Whether withdrawals are taxable or tax-free.

The T3 Slip – Statement of Trust Income Allocations and Designations

The T3 slip is one of the most common forms of investment income reporting in Canada. It is officially called the Statement of Trust Income Allocations and Designations and is issued by a trust to the beneficiaries who receive income from it.

If you see a T3 slip in someone’s tax documents, it means they have earned income from a trust, such as a mutual fund, real estate investment trust (REIT), family trust, or sometimes from an estate of a deceased person.

1. What Is a “Trust” in Simple Terms?

A trust is a legal structure where money or assets are managed by one party (the trustee) for the benefit of another (the beneficiary).

In the context of investments:

• Mutual funds and REITs are often structured as trusts.
• When these funds earn money (from dividends, interest, or capital gains), that income is passed on to investors.
• Each investor then receives a T3 slip, which shows their share of the income earned by the trust.

So, in simple words — the T3 tells the Canada Revenue Agency (CRA) how much income you earned through your investments that were held in a trust.

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2. When You Might Receive a T3 Slip

You may receive a T3 slip if you:

• Invest in mutual funds or REITs held in a non-registered account (not inside an RRSP or TFSA).
• Are a beneficiary of a family trust or estate.
• Receive income distributions from a trust after a relative’s death.

💡 Tip: Most T3 slips from investment companies are issued in March, slightly later than T4 or T5 slips, because trusts need time to calculate the total income for the year.

3. What the T3 Slip Reports

The T3 slip reports different types of income that were earned through the trust and allocated to the investor.
Each type of income has a box number and is reported on different parts of the tax return.

Below are the most common boxes you’ll see on a T3 slip:

Box Number	Type of Income	Description
21	Capital Gains	Your share of capital gains earned within the trust. These are usually taxed at 50% of the actual gain.
26	Other Income	Typically interest income earned by the trust.
49, 50, 51	Eligible Dividends	Box 49 – Actual amount of eligible dividends; Box 50 – Grossed-up amount; Box 51 – Dividend tax credit.
23, 32, 39	Non-Eligible (Ineligible) Dividends	Similar to above but for dividends that don’t qualify for the enhanced tax credit (often from private corporations).
25, 34, 35, etc.	Foreign Income and Taxes	If the trust earned income from foreign sources, these boxes will show foreign business or non-business income and any foreign tax paid.

4. Common Sources of T3 Income

Here are the main types of income that appear on a T3 slip:

1. Dividends – Payments made by Canadian corporations to shareholders through the trust.
2. Interest Income – Earnings from bonds, savings, or other fixed-income investments held by the trust.
3. Capital Gains – Profit earned from selling investments inside the trust.
4. Foreign Income – Income from investments held outside Canada (e.g., U.S. dividends).
5. Other Allocations – Special income categories, depending on the trust type (e.g., REIT distributions).

5. How It Differs from a T5 Slip

The T3 slip is often confused with the T5 slip, but they come from different sources:

T3 Slip	T5 Slip
Issued by a trust (e.g., mutual fund or REIT).	Issued by a corporation (e.g., bank, company paying dividends).
Common for mutual fund investors.	Common for direct stockholders or savings account holders.
Can include multiple types of income: dividends, capital gains, foreign income, etc.	Usually includes interest, dividends, and investment income from corporations.

6. How the CRA Uses the T3 Slip

The information on a T3 slip helps the CRA determine:

• How much investment income you earned outside registered plans,
• The breakdown between taxable and non-taxable portions (e.g., capital gains),
• Whether foreign tax credits or dividend tax credits apply.

Each type of income is reported on specific lines of the T1 General tax return, such as:

• Line 121 – Interest and other investment income
• Line 127 – Taxable capital gains
• Line 120/12000 – Dividends from taxable Canadian corporations

The CRA also receives a copy of your T3 slip directly from the issuer, so it’s important to include it to avoid reassessments.

7. Common Mistakes to Avoid

New preparers often overlook details on the T3 slip because it contains many boxes and small print.
Here are a few key things to watch for:

• ✅ Always check every box — even less common boxes like foreign income or tax paid.
• ✅ Don’t mix up eligible and ineligible dividends — they have different tax credits.
• ✅ Watch for late slips — some investment firms issue revised T3s after the March deadline.
• ✅ Remember that T3s are for non-registered accounts only — you won’t get one for investments held inside RRSPs or TFSAs.

8. Real-Life Example

Let’s say Emma has $20,000 invested in a Canadian mutual fund (not in her RRSP).
At the end of the year, the mutual fund distributes income to her, and she receives a T3 slip showing:

• Box 49: $200 in eligible dividends
• Box 21: $150 in capital gains
• Box 26: $50 in other income

Emma must report these amounts on her personal tax return, even if she didn’t withdraw the money — because the income was allocated to her by the trust.

9. In Summary

Key Point	Explanation
Slip Name	T3 – Statement of Trust Income Allocations and Designations
Issued By	Canadian trusts (mutual funds, REITs, family trusts, estates)
Who Receives It	Investors or beneficiaries who earned income from a trust
Types of Income Reported	Dividends, capital gains, interest, foreign income
Typical Lines on Tax Return	121, 127, 12000, and related schedules
Common Mistake	Ignoring small boxes or assuming it’s the same as a T5

10. Quick Beginner Tip 💡

If your client says, “I have mutual funds,” you should immediately look for a T3 slip, not a T5.
Check all boxes carefully — these slips often contain multiple income types that affect different parts of the return.

The T5 Slip – Statement of Investment Income

When preparing Canadian tax returns, one of the most common slips you’ll encounter—especially for clients with savings or investments—is the T5 slip, officially called the Statement of Investment Income. This slip reports income earned from different types of investments, such as interest, dividends, and certain other payments made by corporations or financial institutions.

The T5 slip is issued by the organization that paid the income. Most often, this will be banks, credit unions, trust companies, or small business corporations. If you have money in a savings account, term deposit, GIC (Guaranteed Investment Certificate), or own shares in a company that paid you dividends, you can expect to receive a T5 slip.

Let’s break down what this slip represents and what the important boxes mean.

🏦 What the T5 Slip Reports

The T5 slip summarizes investment income that must be included on your tax return. Here are the main types of income it can report:

1. Interest Income – From bank accounts, term deposits, and GICs.
2. Dividend Income – From shares of Canadian or foreign corporations.
3. Capital Gains Dividends – Rare, but can appear in some cases (for example, from mutual funds).
4. Foreign Income – Interest or dividends paid in another currency or from foreign investments.
5. Other Investment Income – For example, certain royalties or business income from investments.

Each type of income has a different tax treatment, which is why it’s important to know which box it appears in.

📄 Common Boxes on a T5 Slip

Although there are several boxes on the T5, here are the key ones you’ll often see:

Box	Description	What It Means
10	Dividends other than eligible dividends	Regular dividends from Canadian corporations.
24	Eligible dividends	Dividends from large public corporations or certain private corporations that qualify for a tax credit.
25 & 26	Gross-up amounts for eligible or other dividends	The amount added to the actual dividend to reflect the pre-tax income earned by the company.
11 & 12	Dividend tax credits	The tax credit available for dividends to avoid double taxation.
13	Interest from Canadian sources	Interest from GICs, term deposits, or savings accounts.
16–20	Other income types (foreign income, business income, etc.)	Additional details depending on the investment.
27	Foreign currency	Shows if the income was earned in a foreign currency (e.g., USD). This means you must convert it to Canadian dollars when reporting.

💡 Tip: Always pay close attention to Box 27 (Foreign Currency). If the income is in U.S. dollars or another currency, it needs to be converted to Canadian dollars using the average exchange rate for the year. This is a common area where beginners make mistakes.

📈 Where It Appears on the Tax Return

When you enter the amounts from a T5 slip, they usually end up on the following lines of a tax return:

• Line 12100 – Interest and other investment income
• Line 12000 – Taxable amount of dividends (Canadian corporations)
• Line 12700 – Taxable capital gains (if applicable)

Each line corresponds to a specific schedule (such as Schedule 4 for investment income or Schedule 3 for capital gains), which helps determine how much tax is owed or refunded.

🧾 Example

Suppose you earned:

• $400 in interest from your bank (Box 13), and
• $600 in eligible dividends from a public company (Box 24).

Both of these amounts would appear on your T5 slip. You’d need to include them on your return:

• The $400 as interest income on Line 12100.
• The $600 as dividend income, with the corresponding gross-up and dividend tax credit applied automatically during tax calculation.

⚠️ Common Mistakes to Avoid

1. Forgetting to report small amounts – Even if the total income is under $50, CRA requires all investment income to be reported.
2. Ignoring foreign currency details – Always convert to Canadian dollars using the proper exchange rate.
3. Confusing eligible and non-eligible dividends – They have different tax credits and should be entered separately.
4. Using outdated slips – Make sure you’re using the slip for the correct tax year.

🏁 Summary

The T5 slip plays an important role in reporting income earned from investments. It’s one of the most common slips you’ll see when preparing tax returns, whether for yourself or clients.
Understanding which box corresponds to which type of income—and how to report it correctly—helps ensure that all investment income is declared accurately and that the taxpayer receives the correct credits.

As you move further into tax preparation, you’ll start to recognize T5 slips instantly and know exactly where each amount belongs on the return.

The T5013 Slip – Statement of Partnership Income

When preparing Canadian income tax returns, you may occasionally come across a T5013 slip, also known as the Statement of Partnership Income. This slip is less common than others like the T4 or T5, but it’s important to understand what it represents and how to report it correctly when you do see one.

The T5013 slip is issued to individuals who earn income through a partnership—either as a partner in a business or as an investor in a tax shelter that operates as a partnership. It summarizes the individual’s share of the partnership’s income, losses, deductions, and credits for the year.

Let’s go step-by-step to understand what this slip is about and how it fits into the overall tax picture.

🧾 What Is a Partnership?

A partnership is a business arrangement where two or more people (or companies) share ownership of a business. Each partner contributes something of value—such as money, property, or skills—and shares in the profits or losses of the business according to their ownership percentage or agreement.

Unlike corporations, partnerships don’t pay income tax directly. Instead, the partnership calculates its total income or loss for the year and then allocates each partner’s share. Each partner receives a T5013 slip that shows their portion, which they must report on their own personal or corporate tax return.

🧮 Who Receives a T5013 Slip?

There are two main groups of people who might receive this slip:

1. Business Partners – For example, lawyers, engineers, accountants, or architects who are part of a professional partnership. Their slip shows their share of the partnership’s business income and deductions.
2. Investors in Limited Partnerships or Tax Shelters – These are individuals who invest in certain ventures, such as oil, gas, mining, or real estate projects, that pass on income or losses to investors. These are legitimate tax shelters recognized by the government and often come with specific credits or deductions.

In both cases, the T5013 slip ensures that the partner or investor reports the right portion of partnership income (or loss) on their tax return.

📄 What Information the T5013 Slip Contains

A T5013 slip can look more complex than other slips because it can include many different boxes, depending on the nature of the partnership. Some key details it may include are:

Box	Description	What It Means
Box 20	Business income (loss)	The partner’s share of the partnership’s business income or loss.
Box 22	Rental income (loss)	Income from partnership rental properties.
Box 24	Interest income	Interest earned by the partnership, passed on to the partner.
Box 30–50	Other income and deductions	May include capital gains, Canadian exploration expenses, depletion allowances, or other special credits.
Provincial boxes	Vary depending on province	Many partnerships allocate provincial credits, deductions, or tax amounts, especially for resource-based investments.

Since partnerships may operate in multiple provinces, you might see several provincial codes and amounts on one slip. This indicates which province the income or credit applies to.

💡 Example

Let’s say you’re a 10% partner in an engineering partnership that earned $1,000,000 in total business income for the year.

• The partnership will issue you a T5013 slip showing $100,000 (10% share) in Box 20 – Business income.
• You would then include that $100,000 on your Statement of Business or Professional Activities (Form T2125) or the equivalent business income section on your tax return.

If you were an investor in a resource partnership (for example, an oil and gas tax shelter), the T5013 slip might show:

• A business loss (to deduct from other income), and
• Some provincial exploration credits, which can reduce taxes payable.

⚠️ Important Notes for Beginners

1. Understand the Source – Determine whether the slip is from an active business partnership (like a professional firm) or an investment partnership (like a tax shelter). The reporting process and possible deductions differ.
2. Provincial Credits – Some T5013 slips include provincial credits (especially for mining or exploration). Be sure to check if additional forms are required to claim them.
3. Large Number of Boxes – Don’t be alarmed if you see many boxes. Partnerships can have multiple categories of income, deductions, and credits. Only the relevant boxes need to be reported.
4. Partnership Losses – If your T5013 shows a loss, you may be able to deduct it from other income for the year, depending on the type of partnership.
5. Keep Supporting Documents – Often, investment partnerships send a reporting package or summary that explains each box on the T5013 slip. Keep these with your records—they’re helpful for understanding complex entries or for CRA verification.

🏁 Summary

The T5013 slip – Statement of Partnership Income is used to report income, losses, and credits from partnerships. While it’s less common than slips like the T4 or T5, it plays a key role for individuals involved in business partnerships or investment ventures.

When you see this slip:

• Identify whether it relates to a business or an investment.
• Report your share of the income or loss accurately on your tax return.
• Review any provincial credits or deductions that apply.

With practice, you’ll learn to read these slips confidently and know exactly where each amount fits in a tax return.

The T5008 Slip – Statement of Securities Transactions

When preparing tax returns for clients who invest in stocks, bonds, or other securities, you’ll often come across the T5008 slip, officially called the Statement of Securities Transactions.

This slip reports the details of buying and selling investments, and it’s issued by financial institutions, brokers, or investment firms when a client disposes (sells) securities during the year. Understanding how to interpret and use this slip is important, especially because it directly affects how capital gains and losses are calculated on a tax return.

🧾 What Is the T5008 Slip?

The T5008 slip summarizes investment sales (dispositions) made during the tax year. It shows how much money was received from the sale of securities (known as the proceeds of disposition) and, in some cases, the original cost or book value (the amount paid when buying the investment).

You’ll usually find this slip issued for:

• Stock trades made through a brokerage account (e.g., TD Direct Investing, Questrade, RBC Direct Investing)
• Mutual fund redemptions
• Bond or debenture sales
• Employee share purchase or stock option plans

In simple terms, the T5008 slip helps determine whether an investor made a profit (capital gain) or incurred a loss (capital loss) on the sale of their investments.

💼 Who Receives a T5008 Slip?

You may see a T5008 slip for different types of clients:

1. Regular Investors – Individuals who hold non-registered investment accounts with a bank or broker.
2. Employees with Stock Plans – Employees who receive company shares through payroll or an employee share purchase plan (ESPP) and later sell them.
3. Bondholders or Mutual Fund Investors – Those who sell mutual fund units or fixed-income securities like GICs or bonds.

The key point is: if an investment was sold during the year, a T5008 slip is likely to appear.

📄 Key Boxes on the T5008 Slip

A T5008 slip is fairly short but contains critical information. Here are the main boxes you should understand:

Box	Label	Description
Box 20	Proceeds of disposition	The total amount received from selling the security.
Box 21	Cost or book value	The original purchase price (or adjusted cost base) of the security.
Box 22	Gain or loss	Some slips may show this, but usually, you calculate it yourself.
Box 23	Type of security	Indicates what was sold — e.g., shares, bonds, or other securities.
Box 27	Currency	The currency used in the transaction (e.g., CAD or USD).

Some slips include additional boxes if the investment involved foreign income or different types of securities, but Boxes 20 and 21 are the most important for tax purposes.

💡 Understanding Capital Gains and Losses

The capital gain (or loss) is calculated as:

Proceeds of Disposition – Adjusted Cost Base (ACB) – Selling Expenses

Let’s look at a simple example:

• Proceeds of disposition (Box 20): $3,240
• Cost or book value (Box 21): $2,685

Capital Gain:
$3,240 – $2,685 = $555

Only 50% of capital gains are taxable in Canada.
So, $555 × 50% = $277.50 will be added to the taxpayer’s income for the year.

⚠️ Common Issue: Missing Cost or Book Value

A frequent problem with T5008 slips is that Box 21 (Cost or Book Value) is left blank. This happens because not all financial institutions track the investor’s original purchase price accurately — especially if the investor transferred shares between institutions or bought them in multiple transactions.

If this box is empty, it’s up to you (the tax preparer) to work with the client to determine the Adjusted Cost Base (ACB) of the investment. This ensures that the client is not overpaying tax on what might look like a larger gain than it truly is.

✅ Example:
If the T5008 slip only shows $3,240 in proceeds and no cost value, the CRA system might assume the entire $3,240 is profit.
But if the true cost was $2,685, the actual gain is only $555 — a major difference in taxable income!

Always confirm whether the cost value has been included and make adjustments if it’s missing or incorrect.

🧮 Where the T5008 Slip Appears on a Tax Return

Amounts from the T5008 slip are used to complete Schedule 3 – Capital Gains (or Losses) on the individual tax return (T1).

On Schedule 3, you list:

• Proceeds of disposition (Box 20)
• Adjusted cost base (Box 21 or your calculated ACB)
• Capital gain or loss

The net result (total gains minus total losses) is then carried to the main tax return under Line 12700 – Taxable Capital Gains.

🧠 Tips for Beginners

• Always double-check the cost base (Box 21). Don’t assume the number is correct — many slips omit or misstate it.
• Ask for trade summaries or account statements. If the client uses an online brokerage, these can help confirm the cost base.
• Watch for foreign transactions. If Box 27 shows “USD” or another currency, you must convert both the proceeds and cost to Canadian dollars using the average annual exchange rate.
• Remember: Only 50% of capital gains are taxable. The remaining 50% is tax-free.
• Keep all supporting documents. CRA may request details if the reported gain/loss differs from what’s on the T5008 slip.

🏁 Summary

The T5008 – Statement of Securities Transactions is a key tax slip for anyone who sells investments during the year. It helps calculate capital gains or losses, which form part of a taxpayer’s income.

As a tax preparer:

• Review both the proceeds and cost base carefully.
• Calculate the true gain or loss before entering it on Schedule 3.
• Watch for missing cost data or foreign currency issues.

By understanding this slip and checking the details thoroughly, you can help your clients avoid costly mistakes and ensure their investment income is reported accurately.

The T2202A Slip – Tuition and Enrolment Certificate

The T2202A slip, officially known as the Tuition and Enrolment Certificate, is a key document for students in Canada when filing their income tax return. It allows students to claim the tuition tax credit — a non-refundable credit that helps reduce the amount of income tax they owe.

This slip is issued by universities, colleges, and other eligible educational institutions for students who were enrolled in qualifying post-secondary programs during the tax year. Even though it may seem simple at first, understanding how this slip works is very important — both for students and for tax preparers who handle student tax returns.

1. What the T2202A Slip Reports

The T2202A reports the amount of eligible tuition fees paid by a student within a specific calendar year — not the academic year.

That distinction is important:

• The calendar year runs from January 1 to December 31.
• The school year usually runs from September to April (or later).

This means that a first-year student who started university in September will only see tuition for the September to December period on that year’s T2202A. The rest of the tuition (for January to April) will appear on the following year’s slip.

As a tax preparer, it’s common to see parents confused when the tuition amount looks smaller than expected — and this calendar-year reporting is usually the reason.

2. Key Boxes on the T2202A Slip

Here’s what you’ll typically find on the slip:

• Box A – Eligible Tuition Fees:
  This is the most important box. It shows the total amount of tuition paid in the calendar year that qualifies for the tuition tax credit. Only fees for eligible post-secondary courses count — things like sports fees or student association dues usually do not qualify.
• Box B and C – Part-Time and Full-Time Attendance:
  These boxes were used in older versions of the T2202A (for 2016 and earlier) to calculate education and textbook credits. Those credits were eliminated in 2017, so for current returns, you’ll likely only see Box A filled out.

3. Claiming Tuition on the Tax Return

Students can claim tuition amounts from the T2202A on their personal income tax return. Since this is a non-refundable tax credit, it reduces the amount of tax owed — but it cannot create a refund on its own.

If the student doesn’t earn much income (and therefore doesn’t owe much tax), they may not need to use all of their tuition credits right away. In that case, there are two options:

1. Carry Forward the Unused Credits:
   The student can save them for future years when they have a higher income.
2. Transfer the Unused Credits:
   Up to a certain limit, students can transfer part of their unused tuition credits to a parent, grandparent, spouse, or common-law partner.

To make a transfer, the student must complete and sign the bottom (or back) of the T2202A form, identifying who will receive the transferred amount and how much of it is being transferred federally and provincially.

4. Special Notes for Tax Preparers

• Always check the year on the T2202A to ensure you’re applying the correct rules. Credits before 2017 work differently than those after.
• Make sure the tuition amounts are for eligible courses. Some professional or non-credit courses may not qualify.
• If parents are expecting to claim tuition transfers, ensure that the student has authorized it properly on the form. Without that authorization, the CRA may disallow the claim.
• Keep in mind that foreign universities may also issue T2202A-equivalent forms if the program qualifies for the Canadian tuition credit.

5. Common Mistakes to Avoid

• Using the wrong year’s tuition slip (academic vs. calendar year confusion).
• Forgetting to sign the transfer section when transferring credits to a parent or spouse.
• Double-claiming tuition credits — both the student and the parent claiming the same amount.
• Assuming all school fees qualify — many do not.

6. Example Scenario

Let’s take a quick example.
Sarah started her first year of university in September 2024. She paid $8,000 in tuition for the September–April school year. Her 2024 T2202A will only show tuition for September to December 2024, say $4,000. The remaining $4,000 for January–April 2025 will appear on her 2025 T2202A.

So, when preparing Sarah’s 2024 return, you’d only use the $4,000 amount, and she could claim or carry forward that credit depending on her income.

Summary

Key Point	Details
Slip Name	T2202A – Tuition and Enrolment Certificate
Issued By	Universities, colleges, and other eligible institutions
Reports	Tuition paid during the calendar year
Used For	Claiming the tuition tax credit
Transferable?	Yes, part can be transferred to a parent, grandparent, or spouse
Carry Forward?	Yes, unused amounts can be carried forward indefinitely
Education/Textbook Credits?	Only for 2016 and earlier

The T2202A is one of the most common slips you’ll encounter when preparing tax returns for students or families with children in post-secondary education. Understanding its layout and timing will help ensure tuition credits are claimed accurately — and that your clients receive the full benefit they’re entitled to.

The Auto-Fill My Return Service Offered by the Canada Revenue Agency

Preparing a Canadian tax return used to mean manually entering every slip — T4s, T5s, T3s, RRSP receipts, and more — one by one. Today, technology has made that process much easier. The Canada Revenue Agency (CRA) now offers a feature called Auto-Fill My Return (AFR), which allows approved tax preparers and individuals to automatically import most of a taxpayer’s slips and information directly from the CRA’s database into their tax return.

For new tax preparers, this service can save a lot of time — but it’s equally important to understand its limitations and best practices.

1. What Is Auto-Fill My Return?

Auto-Fill My Return (AFR) is a secure online service provided by the CRA that allows authorized users to electronically retrieve and import tax information that the CRA has on file for a taxpayer.

This information can include:

• T4 slips (employment income)
• T5 slips (investment income)
• T3 slips (trust income)
• RRSP contribution slips
• T4A, T4E, T4RSP, and other common forms
• Carry-forward amounts (e.g., tuition, RRSP, capital losses)

The goal of AFR is to reduce manual data entry and minimize errors caused by missing or mistyped amounts.

2. Who Can Use Auto-Fill My Return?

There are two main ways this service can be used:

1. Individuals filing their own taxes – through CRA-certified tax software, after signing in to their CRA “My Account.”
2. Professional tax preparers (E-Filers) – through CRA’s “Represent a Client” portal, provided that:
   • They are registered with the CRA as an E-File service provider, and
   • They have obtained proper authorization from the client to access their tax information.

Without that authorization, a preparer cannot legally or technically use Auto-Fill My Return for someone else.

3. How It Works (General Overview)

The process is straightforward once authorization is in place:

1. The preparer logs into the CRA system (either through “My Account” or “Represent a Client”).
2. They verify the taxpayer’s identity and request access to the CRA’s tax data.
3. The CRA then securely provides all available slips and tax details for that taxpayer.
4. These details can be imported into the tax return, where the preparer can review and confirm that everything looks correct.

This service can dramatically speed up the preparation process, especially for clients who have multiple employers, investments, or retirement income sources.

4. The Advantages of Using Auto-Fill My Return

• Saves time: You don’t need to manually enter every slip.
• Reduces data entry errors: Since amounts come directly from CRA records, there’s less chance of mistyping.
• Provides a good cross-check: You can compare the slips a client gives you with what the CRA already has on file.
• Helps identify missing slips: Sometimes a client forgets about a small T5 or T3 — AFR can help uncover those.

5. Important Warnings and Limitations

Although AFR is a great tool, it is not always 100% complete or up-to-date. As a tax preparer, you must use professional judgment and verify the data before filing a return.

Here are some important things to keep in mind:

• CRA data is only as current as the institutions that report it.
  For example, employers or financial institutions may have until the end of March to submit their slips. If you use AFR too early in the tax season (like early March), some slips may not yet be available.
• Always cross-check with physical slips or client records.
  If a client provides a T4 slip that doesn’t appear in AFR, you should still use the slip. It simply means the employer hasn’t filed it with the CRA yet.
• Conversely, AFR may show slips that the client forgot to provide.
  In that case, you must include them in the return to ensure completeness.
• Do not rely on AFR alone.
  Think of it like a calculator: it’s a helpful tool, but you still need to understand the underlying numbers. Tax preparers must know how to read and verify every slip, so they can identify when something looks wrong or incomplete.

6. Example Scenario

Let’s say you are preparing a return for a retired client who receives multiple sources of income: a T4A for pension, a T5 for interest income, and a T3 for trust income.

Using Auto-Fill My Return, you can securely download all three slips from the CRA’s records within seconds. However, if the client tells you that they also sold investments recently and you don’t see a T5008 slip (Statement of Securities Transactions) in AFR, that’s a red flag — you should ask for the missing slip rather than assuming it doesn’t exist.

7. Best Practices for Using Auto-Fill My Return

• Wait until mid- to late March before relying on AFR — this gives time for most institutions to file their slips.
• Always compare downloaded slips with client-provided documents.
• If a slip is missing from AFR but provided by the client, use the client’s version.
• If a slip appears in AFR but the client doesn’t recognize it, ask questions — it could be an old investment account or a small trust income they forgot about.
• Never file a return automatically after importing AFR data — always review every entry for accuracy.

8. Summary

Key Point	Details
Service Name	Auto-Fill My Return (AFR)
Offered By	Canada Revenue Agency (CRA)
Purpose	Automatically imports slips and tax data from CRA records
Used By	Individuals via CRA My Account, or authorized E-Filers via Represent a Client
Main Benefit	Saves time and reduces data entry errors
Main Caution	Data may be incomplete early in the season; always verify with physical slips

Final Thoughts

The Auto-Fill My Return service is an incredible time-saver and one of the most practical tools available to modern tax preparers. However, it should always be treated as an aid, not a replacement for proper tax knowledge.

As a beginner, it’s important to first learn how each tax slip works and how to manually enter and interpret them. Once you understand the underlying process, Auto-Fill My Return becomes a valuable tool to speed up your work — while maintaining accuracy and professionalism.