The T5 Statement of Investment Income Tax Form Explained
During the income tax season, it’s challenging to stay on top of the number of tax slips. We all know the T4, but there are many other forms to keep track of. If you earned interest on an investment in the previous year, you’d likely receive a T5 slip. But what is a T5, and how do you report it on your T1 general return? This article will cover everything you need to know about the T5.
What Is a T5 Slip?
If you earn more than $50 of income in your investment accounts, your financial institution will issue a T5 slip, also known as a Statement of Investment Income. If you earned less than $50, you wouldn’t get a slip as the CRA doesn’t charge tax under that amount. Depending upon the type of investment income, you will see amounts reported in several boxes, as per below.
What’s Included In the T5 Slip?
There are several information boxes on the T5 slip. While you may not notice an amount in each box, here is a breakdown of what’s included:
Box 10: Actual amount of dividends other than eligible dividends
Box 11: Taxable amount of dividends other than eligible dividends
Box 12: Dividend tax credit for dividends (excluding eligible)
Box 13: Interest income from Canadian sources
Box 14: Other income from Canadian sources
Box 15: Foreign income
Box 16: Foreign tax paid
Box 17: Royalties from Canadian sources
Box 18: Capital gains dividends
Box 19: Accrued income: Annuities
Box 21: Report code
Box 22: Recipient identification number
Box 23: Recipient type
Box 24: Actual amount of eligible dividends
Box 25: Taxable amount of eligible dividends
Box 26: Dividend tax credit for eligible dividends
Box 27: Foreign currency
Box 28: Transit
Box 29: Recipient account
Box 30: Equity-linked notes interest
Who Should Claim T5 Income?
If your investment account is owned jointly with your spouse, you will receive a T5 slip in both names. If you both contributed equal amounts to the investment, each person can report 50% of the taxable income amount. You can also claim the income proportionally, based upon who contributed what.
How Do I Report T5 Income?
You must report income from your T5 on your T1 general tax return form. If you pay an accountant or professional tax preparer to file your return, like H&R Block, they will do this for you. If you file on your own, using online tax software, it will guide you through your return and let you know which T5 boxes to report.
When Do I Report My T5 Slip?
As I mentioned earlier, you’ll need to reduce your T5 amounts on your T1 general return when you file your taxes. If you have taxes owing, you must pay the balance due by April 30th to avoid penalties. But you can file your taxes much earlier, as soon as you gather all of the required slips.
What If I Have T5 Income from Multiple Sources?
You may have more than one source of investment income reporting on a T5 slip, but no need to worry as there will be a place to report both amounts on the T1 general.
Can I Receive Multiple T5 Slips?
If you hold investments at more than one bank, you’ll receive more than one T5 slip. Each financial institution must produce T5 slips for all eligible accounts.
Filing Your Income Taxes Online
Filing your own taxes online has never been easier. Software programs like TurboTax and Wealthsimple Tax guide you through the entire process and give you the option to send your return to the CRA using NETFILE. Also, most tax software programs have a free version for simple returns. If you haven’t tried using online tax return software, I highly recommend it. The software programs mentioned above are excellent choices, but you can browse from a broader selection in our guide to Canada’s best free tax software programs.
T5 Information for Quebec Residents
In addition to the T5 slip, Quebec residents will receive a Relevé 3, with the amount reported on their provincial TP1 form.
What Happens if I Don’t Receive My T5 Tax Slip?
If you are expecting a T5 slip in the mail but haven’t yet received it, there may be a couple of reasons. If you haven’t earned $50 of interest income, a T5 isn’t required, so you probably won’t receive one from your bank. Another explanation is that your slip has been delayed or lost in the mail. This happens from time to time. If it’s after March 15th, and you still haven’t received your T5, I recommend following up with the issuer. You don’t want to leave it too late and pay penalties to the CRA.
Final Thoughts on the T5 Tax Slip
You’re now up to speed on the T5 slip. If you earned interest income on an investment in the most recent tax year, expect to receive a slip in the mail. If you’ve received your T5 and still have questions, you should seek professional advice from an accountant or licensed tax preparer.