If, as a business person in Canada, you operate a business partnership, and your income exceeds the given limit of more than $2 million or more than $5 million in assets at the end of a fiscal year the Canada Revenue Agency (CRA) expects you to file the T5013 tax form.
The Partnership Information Return, otherwise known as the T5013 form, is used to report any financial data about the allocation of net income, losses and other expenses from a partnership’s activities to its member.
If you are a member of an association that runs a business in Canada or a Canadian corporation, you will need to file the T5013 form. Here, you will find an overview of the T5013 form, its associated schedules and forms and how to fill it.
What is Form T5013?
The form T5013 is a slip used to report fiscal information of partnership business in Canada. The CRA requires this form to get details to estimate the net income (profit and loss) that individual partners will file in their return.
However, not all partnerships in Canada are required to complete the form. Suppose a partnership falls into the category of people who are not required to file a return; in that case, the partners will use the information from the business’s financial statements to report their share of the partnership’s income or loss on their income tax return.
To know if your partnership is exempted from filing the Partnership Information Return, check here.
If your business as a partnership is required to complete the T5013 form, you will also have to complete the following schedules and forms;
- T5013 FIN (Partnership Financial Return)
- T5013 schedule 1 (Partnership Net Income or Loss)
- T5013 schedule 50 (Partnership’s Ownership and Account Activity)
- T5013 schedule 100 (Balance Sheet Information)
- T5013 schedule 125 (Income-Statement Information)
- T5013 schedule 140 (Summary Statement)
- T5013 schedule 141 (Financial Statement Notes Checklist)
- T5013 SUM (Income Partnership Summary)
Each member of a partnership is responsible for ensuring that a return is filed for each partnership’s fiscal year. A partner can file on behalf of the other partner(s). The one who is filing the return is regarded as the authorized partner. Once he or she files the return, the CRA considers it that all partners have filed it.
The partners use the information on the T5013 form to calculate the following returns;
- T1 Income and benefit return (as an individual)
- T2 Corporation Income Tax Return (for a corporation)
- T3 Trust Income Tax and Information Return (for trusts)
- T5013-FIN Partnership Financial Return (for partnerships)
Who is Eligible to Complete the Form?
The Canadian law expects all partnerships that carry on business in Canada or are Canadian partnerships or Specified-Investment Flow-Through (SIFT) partnerships to file a partnership information return. However, there are specific requirements each category of a partnership must meet to qualify them to complete the T5013 form.
For partnerships that carry on business in Canada and Canadian alliances, if any of the following occurs, they are to file a return;
- The partnership has an absolute value of revenues plus the total value of expenses of more than $2million at the end of a fiscal period. Or the association has more than $5million in assets (both tangible and intangible in Canada and worldwide).
- At any time during the fiscal period;
- A partnership is a tiered partnership (that is, it has another affiliation or itself a partner in another partnership) or
- A partnership has a corporation or trust as a partner or
- A partnership invested in flow-through shares of a principal-business corporation that incurred Canadian resources expenses and renowned those expenses to the association or
- The minister of national revenue requests is in writing.
For limited partnerships that invested in either only flow-through shares or flow-through shares and any other property, the CRA requires them to file a return for the fiscal period as it applies. For more information on the requirements of partnerships, see here.
How to Get the T5013 Form
You can get the form and any other required forms and slips from the official CRA website. You can file the return online or on paper, but it is advisable to file the form online. Check out how to file your tax return online here.
Internet filing is mandatory if you are filing more than 50 information returns (slips) for a calendar year. Failure to do this will attract a penalty depending on the number of slips you have. Below is a table showing the penalty per number of slips:[table “123” not found /]
Each slip is an information return, so the CRA calculates the penalty according to the information return type. You may need a web access code if you do not file your return through your CRA My Business Account or Represent A Client (for authorized representatives or employees).
You can also use the CRA web form application for the T5013 summary and slips. It is free and secure to use. If you file by paper, you will send the financial return, schedules, summary and slips to this mailing address;
Prince Edward Island Tax Centre
275 Pope Road
Summerside PE C1N 6A2
How to File the Form T5013 Return
To be able to file the return, you need a partnership account number. It has three parts and 15 characters. They include:
- The nine-digit business number (BN)
- The two-letter information return program identifier (RZ)
- A four-digit reference number (for identification of each account a business may have)
If you file your return on paper, you must enter your partnership account number on the T5013-FIN, related schedules and slips, The T5013 SUM and all financial statements issued to the partners and as well as correspondence regarding the partnership that you send to the CRA.
You can get a business number online with Business Registration Online (BRO). If you have a business number but not an RZ program account number, you can get one with BRO.
You can also register by mail by completing a form RC1 (Request for a Business Number and Certain Program Account) and send the completed form to your nearest tax center. You can register by phone by calling 1-800-959-5525.
However, be prepared to answer questions in all or part of the RC1. This depends on whether you register for an RZ program account or a BN, respectively. To file the return, you should complete your T5013 tax slip, necessary schedules and other schedules as they may apply to your partnership.
Ensure to enter all amounts in Canadian dollars. You must also report all income from foreign countries in Canadian dollars. The CRA expects you to enter the account number and fiscal period ending in designated boxes of the forms and schedules.
If you fail to enter all requested information in their designated area, the CRA will contact you to send an amended form. Note that missing data can delay the processing of both the partnership’s information return and the individual partner’s account. Calculating the net income gives you the value of a partnership’s income.
You can determine the net income by subtracting expenses from the gross revenue. Each partner’s share is dependent on the terms of the partnership contract.
What Next After Filing The T5013 Return?
After filling out the required forms and schedules in return, you should send them to the relevant recipients. The CRA is to receive all of the following;
- The completed original of form T5013-FIN
- The completed original T5013 SUM
- Original copy of all slips T5013
- Completed original of schedules 1, 50, 100, 125, 141
- A copy of the notes to the financial statements for the fiscal period (if filing by paper)
- Other documents or forms as they apply
You can mail two copies of the T5013 slips to each partner’s last known address with a copy of the slip instructions for them. Or you can deliver it in person on or before the day you have to file the return. Check out how to mail a document in Canada here.
Alternatively, you can also send them electronically if they agree to it in writing or by email. You are to keep a copy of each form you send to the CRA for records.
The CRA will then review all you have sent and contact you if there’s a need for an assessment or amendment. You are to keep your paper and electronics records for six years from the end of the previous tax year to which they relate. If you want to destroy them before the period is over, you will need to fill out Form T137 (Request for Destruction of Records).
Usually, it takes about four weeks to examine the information on your return thoroughly. For more information on the T5013 slip and its related schedules and forms, check this guide.
The form T5013 is the partnership income return for partnerships in Canada. It is used in calculating their net income or loss so each partner can file it in his/her individual income tax return or other tax returns as it may apply. It also is filed along with other related forms, schedules and slips. It is best filed online, and a partnership account number is an essential requirement to file the return.