Canada Employee Benefits News and Trends - ebs
The Complete Guide to T4A Slips in Canada
Every tax season, millions of Canadians receive a T4A tax slip to report various types of non-employment income to the Canada Revenue Agency (CRA).
The T4A slip is a critical tax document issued by Canadian payers to report income unrelated to regular employment, such as pensions, scholarships, self-employment earnings, and registered savings plan payments.
This guide will explain everything individuals and businesses need to know about T4A slips to remain compliant with CRA requirements.
What is a T4A Slip?
A T4A slip, officially called a Statement of Pension, Retirement, Annuity and Other Income, reports non-employment income not declared on a T4 slip. The main types of income reported on a T4A include:
- Pension and retirement payments
- Old Age Security (OAS)
- Canada Pension Plan (CPP)
- Annuities
- Self-employment commissions
- Scholarships, bursaries, and fellowships
- Registered Education Savings Plan (RESP)
- Registered Disability Savings Plan (RDSP)
These must be reported on a T4A when exceeding $500 annually. The payer prepares the slip outlining the amounts and any tax deducted, then issues it to the recipient prior to the end of February following the tax year.
When Should a Payer Issue a T4A Slip?
A payer must issue a T4A slip in two situations:
- If non-employment income paid out exceeds $500 for the year. This applies to self-employment earnings, scholarship payments, pension income, registered savings plan withdrawals, and more.
- If any tax was deducted from a payment, regardless of the amount, a T4A is required. For example, an RESP withdrawal with tax deducted requires a T4A.
Common Situations Requiring a T4A:
- Self-employment income over $500
- Pension or superannuation
- OAS benefits
- CPP benefits
- Scholarships, fellowships over $500
- RESP payments
- RDSP payments
- Annuity payments
- Artists’ project grants over $500
What Information is Included on a T4A Slip?
A T4A slip must contain:
- Recipient name, address, Social Insurance Number (SIN)
- Payer name and address
- Tax year
- Income amounts are categorized into appropriate boxes, such as:
- Self-employment commissions (Box 048)
- Scholarships and bursaries (Box 105)
- Pension or superannuation (Box 016)
- RESP payments (Box 042)
- Tax deducted at source (Box 022)
- Income codes specifying the type of income
Key Sections and Boxes on a T4A:
| Box | Section | Description |
| Box 020 | Self-employment commissions | Declares student scholarships, bursaries, and fellowships |
| Box 105 | Scholarships and bursaries | Declares student scholarships, bursaries, fellowships |
| Box 016 | Pension and superannuation | Pension, superannuation, OAS, CPP amounts |
| Box 196 | RESP payments | Income from Registered Education Savings Plans |
How T4A Differs from Other Tax Slips
There are three main tax slips used to report income in Canada – the T4, T5, and T4A. While they share some similarities, these slips differ in key areas like the type of income they report, who issues them, and the information boxes used.
The table below outlines the core differences between T4, T5, and T4A slips:
| Tax Slip | T4 | T5 | T4A |
|---|---|---|---|
| Purpose | Employment income | Investment income | Non-employment income |
| Income Reported | Salaries, wages, commissions, benefits | Dividends, interest, capital gains | Pensions, scholarships, self-employment |
| Issued By | Employers | Banks, financial institutions | Pension administrators, RESP providers, etc. |
| Information Boxes | Employment income categories | Investment income types | Non-employment income types |
| Filing Deadline | End of February | End of February | End of February |
Who Must File T4A Slips?
The payer, like an employer or administrator, must file T4A slips properly to avoid CRA penalties. Key requirements:
- Payers issue recipients their T4A slip by the end of February following the tax year.
- T4A slips must also be filed directly with CRA, electronically or on paper, if less than 50 slips.
- Late filing or mistakes on T4As can lead to CRA penalties. Fines depend on the severity of errors.
How Recipients Report T4A Income and Claim Deductions
When recipients receive their T4A slip, they must accurately report the income on their tax return. Most T4A income is taxable, but deductions or exemptions can sometimes be claimed:
- Enter amounts from each box on the T4A slip into corresponding sections of the tax return. Tax software or e-filing simplifies this.
- Scholarship or bursary amounts may be non-taxable for students. Recipients should verify with CRA.
- Self-employed recipients can deduct valid business expenses by filing Form T2125. Accountants can ensure proper deductions are claimed.
Common Mistakes to Avoid When Preparing T4As
To avoid issues and penalties when filing T4As, payers should be aware of some common compliance mistakes:
- Reporting an incorrect Social Insurance Number (SIN) for the recipient – Always double-check that SINs match the recipient’s official records before filing T4As.
- Categorizing types of income or amounts in the wrong information boxes on the T4A slip – Carefully review CRA guidelines on which income types belong in which boxes.
- Forgetting to include mandatory information such as details on pension adjustments, taxable RESP payments, or foreign income – Use CRA’s T4A checklist to ensure no required information is missed.
- Filing T4A slips late after the February deadline – Set calendar reminders and allow ample lead time to prepare and file T4As well before the deadline to avoid penalties.
- Not filing electronically when required – Double check current CRA thresholds to confirm whether paper filing is still permitted based on your total number of T4A slips.
Recent Changes and Updates to T4A Requirements
It is important that payers stay up-to-date on recent changes to T4A reporting requirements, such as:
- As of 2023, payers must indicate whether recipients were eligible for dental benefits when reporting pension income in Box 16. This supports the administration of the new Canada Dental Benefits Program.
- Electronic filing thresholds for T4A slips were reduced – now only 5 or more T4A slips can be paper filed, down from 50 previously. All other returns must be e-filed.
- New information boxes and income codes have been introduced on T4A slips in recent years to report items like COVID-19 benefits. Payers must ensure they are using current forms.
The bottom line
Filing your T4A slips accurately doesn’t have to be scary or confusing. With the information provided in this guide, you can now approach your T4A with confidence, knowing exactly how to report non-employment income correctly.
Just remember – always double-check the amounts, fill in all required boxes, retain copies for your records, and file by the deadline.
Payers and recipients should understand Canada’s T4A rules thoroughly to remain compliant. Consulting accounting professionals can also help address any questions or uncertainties.
FAQs related to T4A slips
How do I get my T4A slip?
Your T4A slip will be mailed to you by the payer (e.g. your pension provider) by the end of February following the tax year. If you don't receive it, contact the payer directly to request a copy.
What income is reported on a T4A slip?
T4A slips report non-employment income like pensions, annuities, scholarships, bursaries, RESP withdrawals, self-employment income, and other taxable benefits over $500.
Where do I report my T4A income?
You must report all income amounts from your T4A slip on your personal tax return. Most tax software and e-filing platforms have dedicated sections for inputting T4A income.
Why didn't I get a T4A slip?
You will only receive a T4A if you received eligible non-employment income over $500. If the amount was under $500 or was employment income, you would get a T4 instead.
When are T4A slips issued and filed?
T4A slips are issued to recipients by the end of February after the tax year. The payer must also file copies with the CRA by the end of February.
Can I claim deductions for T4A income?
Some deductions like RRSP contributions may be available. Self-employed T4A income can have expenses deducted. Consult a tax professional to maximize eligible deductions.
Is a T4A slip the same as a T4?
No, a T4 is for employment income while a T4A is for non-employment sources like pensions, scholarships, and self-employment.
If I lose my T4A, can I get a copy?
Yes, contact the payer directly and they can issue you a replacement T4A slip if you provide your SIN and details.