NR4 Slip Explained: Boxes, Codes and What to Do With It

What is an NR4 slip, and why did I get one?

An NR4 slip reports Canadian income paid or credited to you while you were a non-resident, and the non-resident (Part XIII) tax the payer withheld. A payer must issue one when it paid you $50 or more in the year, or withheld any Part XIII tax even on a smaller amount (CRA guide T4061). In most cases you file nothing in Canada with it: you keep it for your tax return in your new country.

Part XIII tax is 25% unless a tax treaty or the Income Tax Act lowers it (CRA rates). Your first move depends on the slip's numbers:

NR301 is the form you give a payer to claim your treaty rate. NR7-R is the CRA refund claim for tax withheld in excess. A section 216 or 217 return is a Canadian return for rent or pension-type income that can lower the tax.

A case is not simple when you hold several NR4s at mixed rates, have pension or rental income where a return could change the tax, changed countries mid-year, or have missing years. Gather every NR4 and T-slip for the year, your departure date, proof of your new tax residence and any NR301 you gave the payer.

How do I read an NR4 slip's boxes?

Each NR4 shows the year, who you are, where you live for tax and up to two types of income. The CRA's slip instructions and the current filing specification define each box:

Boxes 24 to 28 repeat 14 to 18 for a second type of income; a third type needs another slip. Exemption codes are listed in Appendix C of guide T4061, and each is valid only with the matching income type.

Which NR4 income codes will I see most?

Most people who left Canada see interest, dividends, rent or retirement income codes. These are the common ones; the full list is on the CRA's slip page.

Interest from an unrelated payer such as a bank (code 61) is generally outside Part XIII, so that slip normally shows no tax and an exemption code; only interest from a related payer, or that varies with the payer's profits, is taxed (Income Tax Act section 212). Code 13 rent has its own filing choices; see non-resident landlords.

Is the tax on my NR4 my final Canadian tax?

Generally yes. The CRA says the Part XIII tax deducted is your final tax obligation to Canada on that income, if the correct amount was deducted (CRA, non-residents of Canada). You do not put NR4 income on a regular Canadian return to get the tax back. Three exceptions change that:

An NR7-R claim must reach the CRA within 2 years after the end of the calendar year the tax was sent to the CRA (T4061; Income Tax Act section 227). Miss that window and the over-withheld tax is generally lost.

If too little was withheld, for example a treaty rate you did not qualify for, the tax is not settled: you still owe the Part XIII tax, and the payer is liable for the shortfall too and may recover it from you (Income Tax Act section 215).

Why did I get both a T-slip and an NR4 for the same year?

Because you were resident for part of the year. Income paid while you were resident goes on the usual Canadian slip (T4, T5, T4A and so on); only income paid or credited after you became non-resident goes on the NR4 (T4061). The T-slips go on your departure-year return; the NR4 income generally does not, unless you elect under section 216 or 217.

If you changed countries of tax residence during the year, the payer should issue a separate NR4 for each country. For T-slips that arrive after you leave, see Canadian slips after leaving Canada.

The rate or the country code on my NR4 looks wrong: what do I do?

Contact the payer first; only the payer can correct the slip. If box 12 is not your country of tax residence, ask for an amended NR4, which the payer must prepare when it finds an error (T4061). If you were a resident of Canada when paid, the payer cannot cancel the slip for that reason; residents can get a credit for the tax withheld on their Canadian return (T4061).

If the payer withheld at 25% and your country has a treaty with Canada, the payer may have had no treaty declaration from you, or the treaty may not cover that income; check the rate in non-resident tax rates in Canada first. Give the payer Form NR301 so it can apply the treaty rate to future payments if you qualify (how to get the treaty rate), then claim back past over-withholding with NR7-R. CPP and OAS work differently: Service Canada says you do not need to ask for a treaty reduction, so there is no NR301 to give; for tax questions it refers you to the CRA (Service Canada). To lower withholding on future pension payments, see lower withholding on Canadian pensions abroad.

When should my NR4 arrive, and what if it doesn't?

Payers must send NR4 slips by the last day of March after the payment year; an estate or trust has 90 days after the end of its tax year (T4061). For CPP and OAS, Service Canada posts NR4 slips online as early as February 1 and mails them in February to people not signed up to view them online (Service Canada).

If a CPP or OAS slip has not arrived by February 28, Service Canada asks you to contact International Social Security Agreements. For any other slip, ask the payer for a copy. No slip is required when you were paid under $50 and nothing was withheld.

How do I use my NR4 in my new country?

Your NR4 is your record of the Canadian income and the Canadian tax paid on it. Your new country may tax the same income and may give relief for the Canadian tax; that relief follows its own law and any treaty, not Canada's. Keep the slip with your return there, and convert amounts using that country's rules. Living in the US? See RRSP and TFSA after leaving Canada.

A joint account NR4: whose income is it?

A joint-account NR4 shows recipient code 2 in box 11 and the second holder's name on the slip (CRA). The slip reports the whole amount and does not split it between holders. Each holder generally reports their own share where they live, under that country's rules on who owns the income; keep the slip as proof of the Canadian tax on the total.

Example

Figures are in Canadian dollars and illustrative.

RRIF payments to a retiree in the UK

A retiree living in the UK gets an NR4 from his RRIF issuer: income code 26, gross C$20,000, tax withheld C$5,000, no exemption code. The full 25% rate may mean no treaty rate was applied, or that his withdrawals were too large to count as periodic pension payments: for a RRIF, a treaty's periodic-pension rate stops once the year's payments exceed the greater of twice the minimum amount and 10% of the fund's value at the start of the year (Income Tax Conventions Interpretation Act section 5). He checks the treaty rate and gives the issuer Form NR301 if a lower rate applies. For this year's tax, a section 217 return is due within 6 months after the year ends; an NR7-R claim has two years.

Left Canada in June

An emigrant leaves in June. Her bank sends a T5 for January-to-June interest and an NR4 for dividends paid from July. Only the T5 goes on her departure-year return; dividends do not qualify for a section 217 election. The NR4 dividends were taxed by withholding, and she keeps the slip for her new country's return.

Joint brokerage account

A couple living abroad holds a joint Canadian brokerage account. The NR4 shows recipient code 2, both names and C$4,000 of dividends. Each may report only their own share abroad, depending on local rules on who owns the income, and keeps the slip as proof of the Canadian tax withheld.

Different for you?

• Several NR4s at different rates, or a payer that never applied your treaty rate: sort out what to claim through non-resident returns and catch-up with individual tax help.
• Pension, RRSP, RRIF, CPP or OAS income: a section 217 return may lower the tax; see non-resident return for pension and RRSP income and get individual tax help.
• Rent from a Canadian property: see non-resident landlords.
• Missing years or slips you never dealt with: the NR7-R window is short; start with non-resident returns and catch-up and individual tax help.
• You live in the US: see RRSP and TFSA after leaving Canada.