Dealing with income taxes can be confusing for many Canadians. In fact, a survey found that 29% of Canadians were worried about what to claim on their tax returns. One of the most misunderstood areas is reporting investment income from T5 slips.
Also known as the Statement of Investment Income, the T5 slip reports taxable investment earnings over $50 that you must include on your personal tax return.
In this guide, we’ll walk through what a T5 is, who needs to receive it, how to report it correctly, deadlines, and much more. With a clear understanding of the T5 slip, you can feel confident that your investment income is accounted for when filing your tax slip.
What is a T5 Slip?
A T5 slip, officially called a Statement of Investment Income, is a tax information slip that provides details on taxable investment income over $50 earned by Canadian residents.
Financial institutions like banks and investment companies are required to issue T5 slips to Canadian taxpayers who earn the following common types of investment income:
- Interest income from savings accounts, Guaranteed Investment Certificates (GICs), bonds, and other interest-bearing investments
- Dividends from stocks in Canadian corporations
- Foreign income from investments outside of Canada
- Capital gains from selling investments at a profit
- Royalties on works, inventions, or natural resource rights
T5 slips outline the different categories of investment income in boxes, along with the exact amounts earned from those sources.
This detailed breakdown makes it easier for taxpayers to accurately report their total annual investment income on their T1 personal tax return. Receiving a T5 slip also indicates that the financial institutions have already reported the investment income amounts directly to the Canada Revenue Agency (CRA).
Who Needs to Receive a T5 Slip?
If you are a Canadian resident who earned taxable investment income over $50 from eligible sources in the previous tax year, you should receive a T5 slip.
Some common scenarios where you can expect to get a T5:
- You earned interest of over $50 from a savings account, GIC, or bonds held at a Canadian financial institution like a bank or credit union. The financial institution will issue you a T5.
- You received dividends of over $50 from stocks you hold in taxable investment accounts. The company paying the dividends or your investment broker will provide you with a T5.
- You received distributions from mutual funds of over $50 outside of registered accounts like TFSAs. You’ll get a T5 slip for this.
- You’re a business owner who took dividend payments of over $50 from your incorporated company. Your corporation must provide you with a T5 slip reporting the dividends.
- You earned an income of over $50 from foreign investments. The payer, for example, your investment advisor, will issue you a T5.
Even if you earned less than $50 in investment income of a particular type, you still have to report it on your tax return. The $50 threshold is simply the requirement for issuers to provide you with an official T5 slip.
It’s important to note that investment income earned inside registered accounts like Tax-Free Savings Accounts (TFSAs), Registered Retirement Savings Plans (RRSPs), Registered Education Savings Plans (RESPs) and others doesn’t get reported on a T5 slip. Income within these registered plans is already tax-sheltered.
What Information is Included on a T5 Slip?
A T5 slip contains several key pieces of information required for filing your taxes accurately:
Recipient details
Your name, address, and Social Insurance Number (SIN) are pre-filled on the T5 slip so the CRA can reconcile it with your personal tax return. Double-check them for accuracy.
Payer details
This includes the name and address of the company or entity that paid you the investment income and is issuing the T5. This could be a bank, investment firm, corporation, etc.
Tax year
The specific tax year the investment income applies to will be shown, for example, “Tax Year 2022”.
Income type boxes
The bulk of the T5 slip is comprised of a series of numbered boxes representing the different categories of investment income:
T5 Income Type Boxes
| Box | Income Type |
| 13 | Interest from Canadian sources |
| 15 | Foreign income |
| 18 | Capital gains dividends |
| 24 | Eligible dividends |
| 25 | Taxable amount of eligible dividends |
Amounts
Each income type box shows the actual dollar amounts you received from those sources for the year. Note that amounts can be shown in Canadian dollars or in foreign currency.
Additional boxes
Depending on your specific investment income, you may need to fill in other specialized boxes, such as Box 16 for foreign taxes paid.
In summary, a T5 slip functions as an itemized receipt of your taxable investment earnings for the year, breaking down the precise amounts by income type. Having these details makes reporting investment income a smooth process.
How to Report a T5 Slip on Your Tax Return
When tax season rolls around, it’s time to transfer the relevant information from your T5 slip(s) onto your T1 personal tax return.
Here’s a step-by-step guide on how to report T5 details properly:
T5 Boxes Matched to T1 Tax Return Lines
| T5 Box | Corresponding T1 Line |
| Box 13 (Interest income) | Line 12100 |
| Box 18 (Capital gains) | Line 17400 (Schedule 3) |
| Box 24 (Eligible dividends) | Line 12000 |
| Box 25 (Taxable eligible dividends) | Line 12010 |
- Gather your T5s: Collect all T5 slips you’ve received from your financial institutions and investment providers. You may have multiple T5s from different sources.
- Match T5 boxes to tax return lines: Most T5 income boxes have a directly corresponding line to report the amount on your T1 tax return. See the table above.
- Verify amounts: Double-check that the quantities on your T5 slips match what you’ve calculated from your records before transferring them.
- Convert foreign amounts: If any amounts are in foreign currency, convert them to Canadian dollars before adding them to your tax return. Use the Bank of Canada exchange rate for the date the income was received.
- Report all income: Remember to include any investment income under $50 that did not generate a T5 slip. Interest, dividends, and capital gains must all be reported.
- Claim credits: Use T5 Box 26 to fill in allowable dividend tax credits that can reduce the tax you owe (Line 40425).
- Attach schedule if needed: If you have many T5 slips, attach a schedule summarizing them to your return. Don’t include the actual T5s.
- Notify about errors: If you notice any errors in T5 amounts, notify the CRA and request corrected T5 slips from the financial institutions.
Following these steps ensures your investment income is accurately captured on your taxes in full compliance with CRA reporting requirements.
When is the Deadline For Filing T5 Slips?
The deadline for financial institutions and companies to issue T5 slips is the last day of February following the tax year in which the income was earned.
For example, T5 slips for the 2024 tax year must be provided to applicable taxpayers by February 28, 2025. This gives taxpayers approximately two months before the April 30 personal tax filing deadline.
As an individual taxpayer, you must ensure you meet the personal tax filing deadline, which is April 30 for most Canadians.
Québec residents have a June 15 tax filing deadline for personal taxes, but must still report their T5 investment income from the previous tax year.
If you miss the tax filing deadline or fail to fully report your T5 investment income, you may face the following penalties and interest charges from the CRA:
- A late-filing penalty – 5% of your unpaid tax owed when you file late, plus an additional 1% per month for up to 12 months
- Interest charges – Compound daily interest on unpaid tax and penalties owing
To avoid penalties, it’s critical to file your taxes with accurate T5 details by the deadline each year.
What if I Have Errors on My T5 Slip?
Despite best efforts, occasional errors can occur on T5 slips with incorrect or missing information. Here are some recommended steps if you discover problems with your T5 details:
- Contact the financial institution or issuer immediately and request a corrected T5 slip. Be specific about what information needs to be amended.
- If you don’t receive a revised T5 in time for tax season, file using your own records. For example, account statements or transaction histories can be used to determine interest income amounts.
- Inform the CRA when you are aware of incorrect or missing T5 details. Send a clear explanation of the error with your tax return.
- If you notice recurring errors on T5 slips from a particular issuer, consider escalating the matter further or changing financial institutions. Receiving accurate tax slips is crucial.
With the right vigilance and timely communication, errors on your T5 slips can typically be corrected smoothly. Maintaining well-organized investment records also helps detect slip issues.
Special Considerations for T5 Slips
Beyond the basics, there are some special cases and considerations that can arise when dealing with T5 slips:
- Joint accounts – If you hold investments jointly with a spouse or partner, each individual can claim their share of income reported on a single T5 based on contributions. This is outlined on the CRA website.
- Non-residents – Non-residents may receive T5 slips for Canadian investment income, but different tax rules apply. In these cases, it is wise to consult a tax expert.
- Escalator GICs – Interest from escalator (stepped-rate) GICs must be reported annually based on an average rate over the GIC’s term, not the actual interest received that year.
- Multiple slips – It’s common to receive various T5 slips from different financial institutions. When filing your return, you simply sum up all your investment income amounts across T5s.
- Québec residents – Québec taxpayers receive both a federal T5 and provincial RL-3 slip and must report amounts on both their federal and provincial returns.
- Amended returns – If you get a late-corrected T5 after filing your taxes, you may need to amend your return or take other steps. Ask a tax expert for guidance.
Being aware of special cases like these will help you navigate any unique T5 situations smoothly.
Key Takeaways on T5 Slips
Filing your taxes doesn’t have to be painful if you understand key documents like the T5 slip. Here are the key takeaways:
- A T5 slip reports taxable investment income over $50 earned by Canadian residents from non-registered accounts.
- T5 income categories include interest, dividends, capital gains, foreign income and more. Each type is reported in specific boxes.
- Financial institutions issue T5 slips for the preceding tax year by the end of February. Taxpayers simply use T5 details when filing their personal tax return.
- All investment income must be reported accurately. Even amounts under $50 need to be included on your tax return.
- Errors on T5 slips should be addressed promptly by contacting the issuer for corrections and notifying the CRA.
The bottom line
Filing your taxes doesn’t have to be painful if you understand key documents like the T5 slip. Avoid errors and maximize your tax refund potential by following the guidance outlined in this article. With the basics of T5 slips down pat, you can breeze through tax season and keep more of your hard-earned investment returns.
Frequently Asked Questions About T5 Slips
How do I get my T5 slip?
Your financial institutions and investment providers will mail or email T5 slips to you by the end of February for the previous tax year. Make sure your contact information is up to date.
What if I don't receive a T5 slip?
Even if you don't receive a T5, you must still report all investment income over $50. Contact the issuer to request the T5, and report based on your own records.
Where do I report T5 investment income on my tax return?
Most T5 income boxes like interest and dividends have a corresponding line to enter the amount directly on your T1 tax return. See the reporting guidelines in this article.
Why are T5 slips important?
T5 slips allow you to accurately report investment income. They also ensure the CRA has a record of the income, helping avoid discrepancies or audits down the road.
When are T5s issued and due?
Financial institutions must send T5s by the end of February for the previous tax year. As the recipient, your deadline is the standard personal tax filing date, April 30 for most.
Do I need to attach T5 slips to my tax return?
No, you just need to enter the T5 amounts on the corresponding lines of your personal tax return. Retain the originals in case the CRA requests them.
Can I file my taxes without a T5 slip?
Yes, you can and should file on time even if you are missing slips. Report your investment income based on available records and follow up with issuers about missing slips.
How long should I keep my T5 slips?
The CRA requires you retain T5 slips for a minimum of 6 years. Digitally archive them for easy access when filing future tax returns.