Filing most income in Canada is done using specific slips. These slips are issued when filing tax to report the income amount and any appropriate deduction. The Canadian government designed these slips, including the T4A slip, to aid the CRA to calculate an individual’s income, how much taxes they owe, and the kind of income they make.
Since there are different income categories in Canada, each type of income has its personalized statement that an individual and the Canada Revenue Agency (CRA) receive yearly. These statements show the total amount of money you receive and any deductions made from it like deducted tax, contributions to Employment Insurance, Canada Pension Plan (CPP), or any union dues.
These statements are known as T-slips, and your payer – employer, financial institution, government departments, or pension administrators prepare these slips. The T-slips currently have several; categories and subcategories. While the most common are the T4 slips, we have the T5 slips, T3 slips, RC slips, among many others that serve different purposes.
What is a T4A Slip?
The T4A slip is a form used to report a statement of pension, retirement, annuity, and other income. The tax T4A covers all income types, especially those not included in other tax slips. It reports all applicable income and deductions.
T4A vs T4 Slip
Most business owners confuse the T4 and the T4A slip as most of them have staff working full-time, part-time, and occasionally. So deciding which employer to issue the T4 or T4A can be quite confusing.
A T4 form reports income received from an employer, unlike a T4A slip, which records different income sources. It is the responsibility of your payer to report the T4A slips to the CRA. A payer in this context can be your pension custodian, employer, or financial institution.
When sending the statement, your payer sends separate copies of your T4A slip to your home address and the CRA. You can file T4A details to the CRA by completing the boxes on your tax return in the same light.
You can also get a copy of your T4A slip from the CRA’s My Account online service. All you need is to sign on to the My Account Service, navigate your way to the Tax Returns section, and click on it. Then click on the Tax Information Slip – T4 and more; this section will display tax slips from the past three years.
Types of T4A Slip
Income earners are those eligible to receive a T4A slip. You will receive a T4A slip if you receive income from pensions, retirement allowance, annuities, or any form of remuneration.
Other income sources can be benefits from medical premiums, the Registered Disability Savings Plan (RDSP) payments, grants for apprenticeship incentive, death benefits, and the Registered Education Savings Plan (RESP) payments.
The other income and income sources are to be filed in the various boxes on the T4A slip. There are currently four types of T4As; they include:
- T4A(P) – Statement of Canada Pension Plan Benefits.
- T4A(OAS) – Statement of Old Age Security.
- T4A-RCA – Statement from a Retirement Compensation Arrangement.
- T4A – Statement of Pension, Retirement, Annuity, and Other Income.
Incomes Reported in a T4A Slip
The T4A accommodates any income. Some of the income you can report using this slip include:
- Death benefits
- Cash benefits
- Exempt income
- Scholarships, bursaries, or research grants
- Income over $500 for some self-employment income
- Withdrawals from RDSPs, RESPs and RRSPs
- Veterans’ benefits
- Tax-deferred cooperative shares
- Bankruptcy settlements
- Tuition assistance for adult education
Incomes Not Reported in a T4A Slip
There are incomes you don’t report using a T4A slip; some of them include:
- Any income from a crown corporation
- Income from construction contract
- Any income made to a non-resident of Canada.
- Funds relating to royalties
- Income from a Life Income Fund (LIF)
- Income earned from investment
- Maternity leave or parental leave top-ups funds
- CPP, OAS, EI and RIF withdrawals
- GST/HST charged on your fees
Generally, income earned from odd jobs, self-employment or freelancing is left out of a T4A slip. Income reported on a T4A is not tax-deductible from the payer. This means that you are responsible for offsetting any tax accrued on the fund.
How To Fill Out Form T4A
You must fill out a T4A form for any payment above $500 in a calendar year. The filled form would be sent to the payee and CRA. Ensure that these payments belong on a T4A slip.
The T4A form is relatively easy to fill. The form is sectioned by boxes that serve different purposes. General information to be inputted in these boxes include:
- Beneficiary’s name
- Beneficiary’s address
- Beneficiary’s social insurance number
- Tax year
- Amount paid
- Income tax deducted (where applicable)
Boxes in a T4A Slip
Some of the boxes on a T4A include:
- Box 20 – self-employed commissions.
- Box 48 – fees for services
- Box 22 – income tax
- Box 16 – pension or superannuation
- Box 105 – scholarship, bursary, fellowship, grant or prize income
It is assumed you are self-employed if you receive a T4A with Box 20 or 48 amount. Both boxes are for filing self-employment income, so if you received this form, you’re a contractor, or you’ve received payment from commission-based activities.
Having your T4A slip come with a Box 20 or 48 means that you are required to input some extra details when filing your tax. Since you are self-employed, you will have to complete the business form T2125, the Statement of Business Activities form. One of the perks of this form is that you can claim expenses to pay off the form’s income.
Box 16, on the other hand, is for people who have paid for a pension plan. Once they start receiving benefits from the program, these benefits will be reported in Box 16 of a T4A slip. These benefits can qualify for the pension income and pension income splitting with your spouse/common-law partner.
Box 105 accommodates tax-exempt income. So income from your scholarship, bursary, fellowship, grant or prize income are tax-exempt for elementary, secondary school and full-time students at a qualifying post-secondary institution.
About $500 for part-time students is tax-exempt. Note that post-doctoral fellowships are taxable. You can check with your accountant or the CRA to know how much of this income must report.
The column that states other information at the bottom of the slip is where you input the code that tells what kind of income you’re filing.
Reporting a T4A
Reporting a T4A slip is similar to filing income on any slip. Generally, people receive a T4A slip by the end of February of the following year. If you have agreed to receive your tax slip electronically, you will receive your tax slip via your mail by the end of February. If you have multiple sources of income, it is customary to receive multiple T4A slips. The CRA also gets a copy.
Note that the CRA will tax most of the income reported on your T4A slip at your marginal rate. Though it is rare for any tax to be deducted at the source, you might likely owe taxes for the income. You are also responsible for estimating and setting aside the right amount of income tax throughout the year, as received from the payment.
Since some income may fall under tax-exempt, like the self-employment income, you may be able to remove eligible business expenses from it. You can contact your accountant or the CRA to confirm if you are unsure where you fall.
Exempt income under the T4A is scholarship, OSAP, or grants for full-time post-secondary students. Any income from those mentioned above will most likely be reported in box 105 on the T4A slip.
Bear in mind that, if you are self-employed, you might not receive a T4A from all your clients since T4A are usually issued by established organizations that see you as an employee.
Filing T4A online
You can file your taxes yourself using tax software. The software will automatically import all your details from your T-slip from the CRA. You can also fill out the details yourself online, the slip comes with numbering, so it is easy to figure out the boxes.
All you need to do is type your details in each box that matches your tax software. You can always get a backup copy by clicking on My Account on the CRA website if you lose your paper copy.
Other Type of T4 Slips
There has always been ambiguity between T4 and T4A as per who gets issued these forms. So how do you determine when to issue a T4 and a T4A slip? To issue out the right form, you must decide if the beneficiary is an employee or a subcontractor.
Since there are different types of T4 slips, below are other T4 tax information slips:
- T4 – Statement of Remuneration Paid
- T4A(OAS) – Statement of Old Age Security
- T4A(P) – Statement of Canada Pension Plan Benefits
- T4E – Statement of Employment Insurance and Other Benefits
- T4RIF – Statement of Income From a Registered Retirement Income Fund
- T4RSP – Statement of RRSP Income