What Is Box 40 on a T4 & How Do You Report It?

A T4 slip summarizes the employment income and deductions an employer reports for tax purposes in Canada. This document is provided to employees each year to assist them in preparing their income tax returns. Understanding each section of the T4 is important for accurate tax filing.

The Purpose of Box 40

Box 40 on the T4 slip is designated as “Other information.” It serves as a reporting area for various types of income, benefits, or deductions that do not have their own dedicated boxes. Employers utilize this box to report amounts to the Canada Revenue Agency (CRA) and to the employee. This box acts as a catch-all for miscellaneous items that still require reporting for tax purposes. While it is a single box, the specific nature of the “other information” contained within it can differ significantly.

Typical Entries in Box 40

Box 40 can contain a wide array of entries. For instance, employment commissions might be listed here if they are not included in other designated income boxes.

Taxable benefits not covered by other specific T4 boxes often appear in Box 40. Examples include certain housing benefits provided by an employer, the value of an employer-provided vehicle used for personal purposes, or tuition fees paid by an employer on behalf of an employee that are considered a taxable benefit.

Deductible amounts can also be reported in Box 40, such as certain union dues or professional membership dues if they are not already reported in Box 44. Other specific income types may include certain non-cash tips or income received from a multi-employer benefit plan.

Reporting Box 40 Amounts on Your Tax Return

Handling the amounts listed in Box 40 on your Canadian income tax return requires referring to the specific codes provided. Unlike some T4 boxes that directly correspond to a particular line on the tax return, entries in Box 40 are varied. Each amount will have a two-digit code next to it, which indicates the type of income or benefit.

To accurately report these amounts, you must refer to the specific numbered codes associated with each entry in Box 40. The Canada Revenue Agency provides detailed guidelines for each code, indicating where on the income tax return the amount should be reported. Tax preparation software also includes prompts and explanations for these codes.

Some amounts in Box 40 might be purely informational and not require direct entry onto a specific tax line, serving simply to inform the CRA. However, many entries will need to be added to your total income or claimed as a deduction on the appropriate lines of your T1 General Income Tax and Benefit Return. It is important to consult the CRA’s T4 guide or your tax software for precise instructions on each code.