T5 slip

Definition

A T5 slip in Canada is an official tax document issued by financial institutions and other organizations to report various types of investment income to both the taxpayer and the Canada Revenue Agency (CRA). 

What is a T5 slip?

The primary purpose of the T5 slip, also known as the “Statement of Investment Income,” is to detail the income earned from investments over the course of a tax year.

The types of income reported on a T5 slip include interest from bank accounts and bonds, dividends from Canadian corporations, and certain foreign income. It also includes other investment income such as royalties. The slip is issued by entities such as banks, credit unions, investment firms, and corporations that pay out investment income to individuals.

Each T5 slip includes essential information such as the recipient’s name and address. The slip lists various boxes that detail specific types of income earned and any applicable tax credits, such as dividend tax credits for Canadian dividends.

Taxpayers use the information provided on T5 slips to accurately report their investment income on their annual income tax returns. Failing to report the income from a T5 slip can result in penalties and interest charges from the CRA.

T5 slips must be issued by the end of February following the tax year in which the income was earned. Both the CRA and the taxpayer receive copies of the slip to ensure transparency and accurate tax reporting. This document is essential for individuals with investment income as it helps them comply with Canadian tax laws and ensure all earned income is appropriately taxed.