Business Income, CRA & Revenu Québec, Education, Income & Investments, Tax Basics, Technical, Tips & Advice

Your Complete Guide to the Most Canadian Tax Slip, the T4A (T4 eh?)

Most income has a specific slip that’s issued at tax time to report the income amount and any deductions. A T4 slip records your employment income and your source deductions like CPP contributions, EI premiums and income tax deducted. If you withdraw money from your RRSP, a T4RSP slip is issued. If you received Employment Insurance benefits, you’ll receive a T4E slip.

A T4A is a catch-all slip. Think of it as the junk drawer of slips. Instead of twist ties and half-used rolls of tape, it’s full of income and deductions. If the amount doesn’t go on another slip, it ends up on a T4A.

Versions of T4As

There are actually four different types of T4As.

  • T4A(P) This slip is used to record Canada Pension Plan benefits.
  • T4A(OAS) Old Age Security benefits are listed on this slip.
  • T4A(RCA) This slip covers amounts related to a Retirement Compensation Arrangement
  • Plain, no frills or extra letters T4A.

Since the plain T4A covers many different tax areas, that’s the one we’ll focus on.

Boxes, Boxes and (you guessed it!) More Boxes

Because a T4A slip is used to cover so many different scenarios, it has literally dozens of different boxes to describe the item it’s reporting. Everything from scholarships to medical travel to Veteran’s benefits has a spot on a T4A. Let’s look at a couple interesting ones:

Box 105

If you’re a university or college student, your scholarships and bursaries are reported on a T4A. You may have heard a rumor that your scholarship/bursary is tax-free. Not quite – but close!

If you were a full-time student, your scholarship/bursary income is exempt from tax in most cases in all provinces except Quebec. However, you do need to enter the T4A information on your tax return. So when you enter your T4A income, choose the option for Box 105 that applies to FT students to make sure you’re not paying tax on this tax-exempt income.

If you were a part-time student, some or all of your T4A scholarship/bursary income may be exempt. At least $500 will be exempt in most cases. How much exactly depends on how much your courses cost and how much scholarship/bursary income you received.

Boxes 20 and 48

Without a doubt, the most popular T4A question asked on our online forum AnswerXchange is “Why does TurboTax think I’m self-employed?” The answer is a simple one. “Because you are!”

If you receive a T4A with box 20 or 48 amounts, you are indeed self-employed for tax purposes as both of these boxes are used exclusively to report self-employment income. You’re either a contractor or you’ve earned income from commission-based activities.

Having a T4A with box 20 or 48 means that you’re required to complete a bit of extra info at tax time. Since you’re self-employed, you’ll complete the business form T2125. The upside is you can also claim expenses to offset that income.

Will I Receive a T4A?

So how do you know if you’re supposed to be getting a T4A? The full list of T4A items can be found on the Canada Revenue Agency’s webpage. If your income is listed, you’re likely going to receive a T4A.