T5 - Statement of Investment Income

Enter the taxpayer's share of the T5 slip if it is less than 100%. If the spouse's percentage is entered, these percentages will update the spouse's return if the returns are coupled.

In box 27, you can make a choice with regard to the currency that has to be used for the calculation. The annual average for the exchange rate will then be applied based on this choice.

Boxes 12 and 26 of the T5 slip do not appear on the screen. It is not necessary to enter the federal dividend tax credit since the program calculates it and enters it on line 40425.

If you enter interest income on box 13, select also the appropriate interest source (bank, bond, mortgage or other) from the pop-up list provided. This information is included in electronically filed returns.

Select the name of this country in the "Country name" search box and enter the foreign income and taxes in the appropriate boxes. These figures are updated to the T2209 C form so that the software may calculate both the federal and provincial foreign tax credits.

You can enter income from a foreign source in a foreign currency, in which case you must also enter the exchange rate so the program can convert the amount to Canadian dollars. The equivalent amount in Canadian dollars is then shown in the Your share column. You can select the US exchange rate if the transaction took place in the United States. You may also choose to enter foreign investment income in Canadian dollars. In that case, do not enter anything in the exchange rate cell.

If the foreign investment income is subject to a tax withholding of less than 15% (for example, under article XI of the Canada – United States Tax Treaty, the withholding rate on non-banking interest cannot exceed 10% of the gross income). The program will transfer the foreign income and corresponding foreign tax paid entered on the T5 slip to the Form T2209 Type 5 income class instead of to the Type 1 income class.

If the foreign income, such as American banking income and portfolio interest, is not eligible for the foreign tax credit in Canada, it will not be transferred to Form T2209 C, as in the case of the related foreign tax paid. They will, however, continue to be included in interest and in other investment income of the Investment Income, Carrying Charges, and Interest Expenses worksheet updated to line 12100 of the T1 return.

If you enter royalties from Canadian sources in box 17, you must also indicate where you want to carry this amount in the return by selecting one of the following check boxes:

• Carry the amount from box 17 to line 10400 of the T1 return (work or invention);
• Carry the amount from box 17 to line 12100 of the T1 return (other);
• Carry the amount from box 17 to Form T2125 (if the amount constitutes business income).

Pension Income (box 19) is separated into two input cells to allow the program to distinguish income eligible for the pension income credit from ineligible income.

With respect to amounts received by surviving spouses under 65 years of age, to qualify for the pension income amount, the deceased spouse had to, before his/her death, have converted his or her equity into an annuity and transferred the right to such annuity to the surviving spouse (upon death). The conversion by the surviving spouse of a lump-sum amount received following the death of the spouse into an annuity does not qualify for the pension income amount.