NR4 vs. T4A: Personal Tax Slips for Canadian and Non-Resident Income

In Canada’s complex tax system, various tax slips serve to report different types of income for residents and non-residents. Two commonly encountered slips are the NR4 and T4A. Understanding their purposes, differences, and reporting requirements is essential for accurate tax filing and compliance, whether you are a Canadian resident, a non-resident, or a payer issuing the slips.

1. Overview: What Are NR4 and T4A Slips?

T4A is a Canadian information slip issued primarily to residents for a variety of income types such as pensions, annuities, self-employed commissions, scholarships, and other income that does not fall under the regular employment income category reported on a T4 slip.

NR4 is the non-resident equivalent slip used to report amounts paid or credited to non-residents of Canada subject to withholding tax. The NR4 covers income such as interest, dividends, royalties, rent, pension, and certain other types of Canadian-sourced income paid to non-residents.

2. Purpose and Scope of Each Slip

2.1 T4A Slip

The T4A slip reports income types including but not limited to:

• Pension or superannuation payments
• Other income such as research grants, scholarships, bursaries
• Self-employed commissions
• Fees for services

This slip is primarily issued to Canadian residents but may also be issued to certain non-residents in limited circumstances.

2.2 NR4 Slip

The NR4 slip reports amounts paid or credited to non-residents from Canadian sources that are subject to Part XIII withholding tax. Common types of income reported on NR4 include:

• Dividends from Canadian corporations
• Interest from Canadian sources
• Royalties, rents, and certain fees for services
• Pensions and annuities paid to non-residents
• Capital gains distributions

3. Who Issues These Slips?

T4A slips are issued by employers, institutions, or payers making payments to Canadian residents or certain categories of income earners such as contractors or pensioners.

NR4 slips are issued by Canadian payers who make payments to non-residents that are subject to withholding taxes or need to be reported for informational purposes.

4. Tax Reporting and Filing Implications

4.1 For Canadian Residents Receiving a T4A

Income reported on the T4A must be included in the recipient’s Canadian tax return as part of their total income. The payer may or may not have withheld tax depending on the nature of the payment.

4.2 For Non-Residents Receiving an NR4

Non-residents receiving income reported on NR4 typically have Part XIII withholding tax deducted at source, which generally satisfies their Canadian tax liability on that income. However, non-residents may need to file a Canadian non-resident income tax return (T1NR) if they want to claim refunds or deductions related to the income.

5. Key Differences Between NR4 and T4A

Feature	T4A	NR4
Recipient	Canadian residents (and some non-residents in limited cases)	Non-residents of Canada
Income Types	Pensions, annuities, scholarships, self-employed commissions, fees for services	Dividends, interest, royalties, rents, pension, other Canadian-sourced income
Withholding Tax	May or may not be withheld depending on income type	Usually Part XIII withholding tax at prescribed rates
Filing Requirement	Included in resident’s Canadian tax return	Non-residents may file T1NR to claim refunds or deductions
Form Issued By	Employers, payers to Canadian residents	Canadian payers to non-residents

6. How to Obtain and Use These Slips

Issuers must file T4A and NR4 slips with the CRA by the end of February following the tax year and provide copies to recipients by the same deadline.

Recipients should:

• Review slips carefully for accuracy
• Report the amounts shown on their tax returns accordingly
• Keep copies for at least six years in case of CRA review or audit

7. Common Issues and How to Avoid Them

• Misclassification: Ensuring the correct slip is issued based on residency and income type to avoid penalties.
• Late Issuance: Slips filed late can delay tax processing and refunds.
• Incorrect Withholding: Under- or over-withholding on NR4 income may cause surprises in tax owed or refunds.
• Failure to File Return: Non-residents receiving NR4 income might overlook the need to file a T1NR return when eligible.

8. When to Consult a Tax Professional

If you:

• Receive income reported on both T4A and NR4 slips
• Are a non-resident unsure of your Canadian tax filing obligations
• Have complex foreign income or treaty considerations
• Need help understanding withholding tax impacts

It is advisable to seek guidance from a qualified tax professional experienced in Canadian and international taxation.