What Is a T5007? Understanding the Statement of Benefits

Some Canadians are surprised when a T5007 Statement of Benefits arrives in the mail or appears in their CRA account during tax season. Because it lists non-taxable benefits, they may wonder why they're receiving a tax slip.

Reporting these benefits on your tax return is important, even if they don't affect how much tax you pay. The Canada Revenue Agency (CRA) still uses this information to calculate certain credits and income-tested benefits. In most cases, a T5007 will not increase your federal income tax owing, but it can affect programs tied to your overall income.

Understanding what this slip is and how it works can help you avoid mistakes, reassessments, and unnecessary stress at tax time.

What Is a T5007 Statement of Benefits?

A T5007 Statement of Benefits is a tax slip issued to Canadians who received certain types of government benefits during the year.

Some of the common payments that this slip reports include:

• Workers' compensation benefits
• Social assistance payments
• Certain provincial or territorial income support benefits, such as the Ontario Trillium Benefit, a refundable tax credit that helps low- to moderate-income Ontario residents cover energy costs, property taxes, and sales tax, or Prince Edward Island's AccessAbility Supports program for individuals living with disabilities.

Even though many of these payments are considered non-taxable, the CRA still requires them to be reported on your tax return.

Why do you receive a T5007 if the income is not taxable?

Many people assume that if income is non-taxable, it should not appear on a tax return at all. But the CRA still uses certain non-taxable income amounts when calculating eligibility for government credits and other benefits.

That means the income on your T5007 may not change the amount of tax you pay, but it can still affect your benefit entitlement and other credits that are income dependent such as:

• Canada Groceries and Essentials Benefit (formerly the GST/HST credit): Quarterly tax-free payments for individuals and families with low or modest incomes. Your benefit amount is based on family net income. Higher income could reduce your benefit amount.
• Canada Child Benefit (CCB): Monthly payments for eligible families raising children under 18. If your household income increases because of amounts reported on a T5007, your family's CCB entitlement could change.
• Canada workers benefit (CWB): A refundable tax credit for low-income workers.
• Provincial credits and programs: Some provinces offer low-income tax credits, rent subsidies, energy rebates, and social assistance, such as the Ontario Low-Income Workers Tax Credit.
• Rent or property tax credits: Available in some provinces for eligible renters or homeowners, such as the B.C. renter's tax credit.
• Pharmacare or drug benefit programs: Some provincial prescription coverage programs use household income thresholds, such as the Manitoba Enhanced Pharmacare Program.
• Child care subsidies: For programs like the Alberta Child Care Subsidy, eligibility or subsidy amounts may depend on family income.
• Senior benefits: Programs such as the Guaranteed Income Supplement (GIS) may be affected by certain income calculations.
  
  

How does a T5007 affect your tax return?

The good news is that a T5007 usually does not mean you will owe income tax on the benefits listed. However, the slip still needs to be reported correctly on your return.

You report the amount from your T5007 slip on your tax return in the section for other income and benefits.

For most taxpayers, the amount is entered on:

• Line 14400: Workers' compensation benefits, or
• Line 14500: Social assistance payments.

The correct line depends on the type of benefit shown on your slip.

After the amount is included in income, the CRA generally allows a deduction on Line 25000 — Other payments deduction.

This is what prevents most T5007 benefits from being taxed federally while still allowing the CRA to use the amount for income-tested benefit calculations.

If you use tax software such as TurboTax Canada, Autofill My Return will fill in the correct lines automatically.

What if your T5007 looks incorrect?

Do not simply leave the slip off your tax return because you think it's wrong. The CRA receives a copy directly from the issuer, and omitting it could trigger a reassessment. Contact the organization that issued the slip. If the issuer confirms an error, ask for an amended slip before filing, if possible.

Failing to report the slip properly may result in:

• Reassessments
• Benefit adjustments
• Processing delays
• Requests for additional information

What if you expected a T5007 but did not receive one?

If you believe you should have received a T5007 but have not:

• Check your CRA My Account for electronic tax slips.
• Confirm your mailing address is up to date.
• Contact the benefit provider directly.

T5007 vs. T4: What is the difference?

You may be familiar with receiving a T4 from an employer. Here is the key difference between a T4 and a T5007:

• A T4 reports employment income that is generally taxable.
• A T5007 reports certain government benefits that are often non-taxable federally.

Even though both slips are reported on your return, they report different types of income and are treated differently in the tax calculation.

A T5007 is usually about benefit calculations, not creating a tax bill. Filing it properly helps you avoid reassessments and ensures your credits and benefits are calculated as accurately as possible.