What Is a T5 Tax Form and How Do You Report It?

The T5 slip, formally the Statement of Investment Income, is a tax document used in Canada to report investment income to taxpayers and the Canada Revenue Agency (CRA). It provides a detailed breakdown of earnings from non-registered accounts, such as interest from savings accounts, dividends, and royalties. This information is necessary for individuals to accurately complete their annual income tax returns.

Who Issues and Receives a T5 Slip

T5 slips are prepared and sent by payers of investment income, including financial institutions, investment brokers, and corporations that pay dividends. Any entity paying more than $50 in total investment income to a Canadian resident within a calendar year is required to issue a T5 slip. If you earn less than $50 from a single source, the institution is not obligated to send a slip, but you are still required to report that income on your tax return.

If an investment is held in a joint account, the T5 slip may be issued with both names, and the income is typically reported by each individual based on their proportional contribution to the account. Issuers must send T5 slips to recipients and the CRA by the last day of February of the year following the calendar year to which the information applies. For the 2024 tax year, for instance, the deadline is February 28, 2025.

Understanding the T5 Form Boxes

The T5 slip is organized into numbered boxes that categorize different types of investment income and associated tax credits. The slip distinguishes between different dividend types because they are taxed at different rates and receive different tax credits.

A primary category is for “dividends other than eligible dividends,” often paid by smaller, Canadian-controlled private corporations. Box 10 shows the actual amount of these dividends you received. Box 11 presents the “taxable amount,” which is a higher figure due to a “gross-up” calculation, and this is the amount you report as income. Box 12 contains the corresponding dividend tax credit, which reduces the amount of tax you owe.

Another category is for “eligible dividends,” which are typically paid by public corporations and are subject to a more favorable tax treatment. Box 24 shows the actual amount of eligible dividends paid to you. Box 25 contains the “taxable amount” after the gross-up, which is the figure to be reported on your tax return. Box 26 provides the dividend tax credit for these eligible dividends, which is generally larger than the credit for other dividends.

Beyond dividends, the T5 slip details other common forms of investment income. Box 13 is one of the most frequently used boxes, as it reports interest income from Canadian sources, such as interest earned on savings accounts, GICs, or bonds. Box 17 is used to report royalties received from Canadian sources. The slip also has boxes for foreign income and foreign tax paid, which are important for calculating foreign tax credits.

Reporting T5 Income on Your Tax Return

You do not need to send the physical T5 slip to the CRA when you file, but you must keep it for your records in case they request it later. Each box on the T5 corresponds to a specific line on the T1 General income tax and benefit return.

For interest income, you will take the amount from Box 13 of your T5 slip and enter it on line 12100 of your T1 return. The taxable amount of eligible dividends, found in Box 25 of the T5, is reported on line 12000 of the T1 return. The taxable amount of dividends other than eligible, from Box 11, is reported on line 12010.

The dividend tax credits associated with this income are used to reduce your total tax payable. The credit for eligible dividends, from Box 26 of the T5, is claimed on line 40425 of your federal tax return. Similarly, the credit for other dividends, from Box 12, is also claimed on line 40425. These credits are calculated on the federal tax worksheet and Schedule 4 to determine the final amount.

Handling Discrepancies or Missing Slips

If you receive a T5 slip with incorrect information, such as a misspelled name, an incorrect Social Insurance Number (SIN), or an inaccurate income amount, you should not file your return with that slip. Contact the issuer immediately and request that they issue a corrected, or amended, T5 slip. If you receive an amended slip after you have already filed your return, you must file an adjustment using Form T1-ADJ, T1 Adjustment Request.

If you expect a T5 slip but do not receive one by the February deadline, your first action should be to contact the financial institution or corporation that was supposed to issue it. You can also check your CRA My Account online, as your slip may be available there. If you cannot obtain the slip, you are still legally obligated to report the income. You must calculate the income yourself using your own records, such as monthly account statements, and report it on the appropriate lines of your tax return. It is important to keep all documentation that supports your calculations.