T4A/T4A-NR: Tax requirements and deadlines
The coming weeks will be crucial in terms of tax compliance. The deadlines are approaching for filing T4A and T4A-NR slips, which are often overlooked or misunderstood by organizations that pay certain types of income. It is important to understand the applicable requirements and ensure that the information reported is accurate, complete, and filed on time to avoid significant penalties and interest charges.
Here is a practical reminder to help you distinguish between these two slips and meet your tax obligations. Although these slips may seem similar, they apply to different situations.
- T4A is used to report certain income paid to Canadian residents, other than employment income (which is reported on a T4 slip). Any person or entity making such payments must file a T4A slip for each recipient, as well as a T4A Summary.
- T4A-NR is used to report fees, commissions, or other amounts paid to non-residents for services rendered in Canada, other than in the course of employment. Any person or entity making such payments must issue a T4A-NR slip to each recipient, as well as a T4A-NR Summary.
Here is a summary table of the main differences between these two slips:
| T4A – Statement of income from pensions, retirement, annuities, or other sources | T4A-NR – Payments to non-residents for services performed in canada | |
| Recipients covered | Residents of Canada (self-employed individuals, students, scholarship recipients, retirees, etc.) | Non-residents of Canada |
| Type of income | Non-employment income | Services rendered in Canada outside the scope of employment |
| When to issue | If you deducted tax from any payment OR If the total payments exceed $500 (with some exceptions) | As soon as a non-resident provides services in Canada, regardless of the amount |
| Payments to report (examples) |
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| Tax withholdings | T4A does not automatically create a withholding obligation (with some exceptions). It is mainly used to report the gross income received by the recipient | Mandatory withholding of 15% of payments made (+ 9% in Quebec if the services are rendered in Quebec), unless exempt or exempted |
| Payer obligations | Issue a slip for each recipient and file the Summary | |
| Filing deadline | Last day of February following the calendar year of payment | |
| Mandatory electronic production | If more than 50 pages | If more than 5 sheets |
| Penalties | Late filing or failure to file: Penalties ranging from $100 to $7,500, depending on the number of slips and the length of the delay. Failure to file online (when required): Penalties ranging from $250 to $2,500, depending on the number of slips. Failure to withhold the required tax: Penalty of 10% of the amount of tax that should have been withheld. The penalty may be as high as 20% in the case of a repeat offense or serious misconduct. Failure to remit amounts withheld: Penalties ranging from 3% to 10% of the amount due, depending on the number of days late. In the event of a repeat offense, the penalty may increase to 20%. | |
| Interest | Compound interest is applied daily to unpaid amounts and penalties until full payment is made. | |
In case of doubt or special circumstances, it is recommended that you verify the applicable procedure to ensure proper compliance.
If you have any questions or would like more information, please contact our experts, Arda Minassian and Valerie Seng.
*Thanks to Julia Leclair, Tax Intern, for her help in writing this article.
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