What tax slips / returns did I receive and why?

Have you ever received tax slips in the mail and wondered why?

Here are some of the slips you may have received and a description of what they are reporting:

 

RRSP Contribution Receipts

RRSP contribution receipts are issued for all contributions, regardless of the amount, and show all reportable contributions for the tax year.   These get mailed more frequently if you are actively contributing to your RRSP,  with the first mailing at the end of January (for contributions made between March 1st and December 31st), and in separate mailings until mid-March (for contributions made in the first 60 days of the following year, to be applied to the previous year. 

 

T4RSP/T4RIF Relevé 2 (RL2)

T4RSPs/T4RIFs are issued for all withdrawals, regardless of amount, and show actual or deemed withdrawals from an RRSP/RRIF, including Lifelong Learning Plan (LLP), Homebuyers Plan, marriage breakdown and hardship. Quebec residents must file the RL2, in addition to the T4RSP/T4RIF.   These slips are mailed by the last day in February, so you should be receiving them around then, early March at the latest. 

 

NR4

NR4s are only issued for amounts of at least $50 per currency for investment accounts, but for any amount for registered accounts. NR4s are also issued for amounts less than $50 per currency if tax was withheld from the payment. It records reportable income from Canadian sources for non-residents of Canada.  The NR4 is required to be mailed before the last day in March (or early April if March 31st falls on a Saturday or Sunday). 

 

T4A/Relevé 1 (RL1)

T4As are issued for all withdrawals, regardless of amount, and show actual or deemed withdrawals from an RESP. Quebec residents must file the RL1, in addition to the T4A.   T4A’s / RL1’s are required to be mailed by the last day in February. 

 

T5/Relevé 3 (RL-3)

T5’s report dividend and interest income and are only issued for amounts of at least $50 per currency. It consists of two parts: the T5 Supplementary (which shows the reportable regular and split share income for the tax year) and the Investment Income and Expense Summary (which provides details of the totals, including expense items). Quebec residents must file the provincial tax form, Relevé 3, in addition to the T5.   These are mailed out to holders before the last day in February.

 

T3/Relevé 16 (RL16)

T3’s report trust and mutual fund income and are only issued for amounts of at least $100. It consists of two parts: the T3 Supplementary (which shows the reportable capital gains and other income for the tax year) and Summary of Trust Income and Expense (which provides details of the totals, including expense items, as well as the adjusted cost base portion – return of capital). Quebec residents must file a RL16, in addition to the T3.  These are to be mailed before the last day in March. 

 

T5013/ Relevé 15 (RL15)

T5013s are issued for limited partnership income, regardless of the amount, and record the partnership’s gain or losses at the partnership’s year-end. Quebec residents must file the RL15, in addition to the T5013.   These are sent out before the end of March.

 

Relevé 7 (RL7)

RL7’s are issued for Quebec Residents only, recording all reportable income from the Small and Medium Enterprises Growth Stock Plan (SME), formerly called the Quebec Stock Savings Plan.  These are mailed before the last day of February. 

 

1099-DIV

1099-DIVs show all reportable dividends paid to a U.S. person (or individuals subject to US tax laws) during the tax year.   1099-DIV’s can be mailed out by the end of January, however, the IRS allows for companies to file for 30 day extensions, and most apply for it to be sure of no penalty or interest, so these forms are mailed by the end of February instead.  

 

1099-INT

1099-INTs show all reportable interest paid to a US person (or individuals subject to US tax laws) during the tax year. These are to be mailed by the end of January.

 

1099-B

1099-Bs show all reportable distributions for a US person (or individuals subject to US tax laws) during the tax year.  As mentioned with the 1099-DIV’s are subject to an extension and thus are usually mailed by the end of February instead of the end of January. 

 

1042-S

1042-S’s show all reportable US source income paid to a non-resident of the US during the tax year.  These forms are to be mailed by the end of March. 

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Québec sales tax (QST) increased to 8.5% as of January 1, 2011

Did you know that there was an increase in the rate of the Québec sales tax (QST) as of January 1, 2011?

The QST rate increased from 7.5% to 8.5%.

The taxable supply of movable property or a service will be subject to the 8.5% QST rate if all or a portion of its consideration becomes due after December 31, 2010, and is not paid before January 1, 2011.

The taxable supply of an immovable by way of sale will be subject to the 8.5% QST rate if it is made pursuant to a written agreement entered into after December 31, 2010, under which the ownership and possession of the immovable will be transferred to the recipient after this date.

The taxable supply of the construction, renovation, alteration or repair of an immovable will also be subject to the 8.5% QST rate if it is made pursuant to a written agreement entered into after December 31, 2010.

However, the rules described above regarding the taxable supply of movable property or a service will also apply to the taxable supply of an immovable other than by way of sale.

Special rules apply to the following supplies: continuous supplies, budget payment arrangements with reconciliation, exchanges of movable property, primacy rules, the bringing of movable property to Québec, etc.

For further information, see page A.55 in Additional Information on the Budgetary Measures, published by the Ministère des Finances.

http://www.revenu.gouv.qc.ca/en/ministere/centre_information/nf/2009/hausse_taux_taxe.aspx

Consequential adjustments
Rounded-off mathematical factors. The QST is calculated on a consideration that includes the goods and services tax (GST) at a rate of 5%. With the increase in the QST to 8.5%, the effective rate of the QST (currently 7.875%) and the combined effective rate of the GST and the QST (12.875%) will be raised to 8.925% and 13.925% respectively as of January 1, 2011. The mathematical factors rounded to 7.87% and 12.87% will be replaced by factors rounded to 8.92% and 13.92% respectively, as of the same date.

Taxable benefit related to the cost of operating an automobile. The amount of QST to be included in the calculation of a registrant’s net tax related to the cost of operating an automobile corresponds to 4.7% of the value of the benefit. As of January 1, 2011, the rate of 4.7% will be raised to 5.4%.

Quick accounting methods. The prescribed rate for small businesses set at 2.7% for vendors of corporeal movable property and at 5.3% for other businesses will be raised to 3% and 6%, respectively. The prescribed rate for municipalities set at 4.6% and for other bodies set at 5.9% will be raised to 5.2% and 6.6%, respectively. The new prescribed rates will apply to any reporting period that starts after December 31, 2010.

Simplified method for calculating rebates regarding an expense account. The changes to be made to the mathematical factors and to the simplified method for calculating rebates regarding an expense account will be clarified by Revenu Québec at a later date.

Corresponding increase in the tobacco tax.
To reflect the increase in the QST rate as of January 1, 2011, the rates of the tobacco tax will be changed as follows:

the rate of 10.3 cents per cigarette will be raised to 10.6 cents per cigarette;
the rate of 10.3 cents per gram of loose tobacco or leaf tobacco will be raised to 10.6 cents per gram;
the rate of 15.85 cents per gram of any tobacco other than cigarettes, loose tobacco, leaf tobacco and cigars will be raised to 16.31 cents per gram;
the minimum rate applicable to a tobacco stick will be raised from 10.3 to 10.6 cents per stick;
the rate of 80% of the taxable price of cigars will remain unchanged.
Persons not under an agreement with Revenu Québec who sell tobacco products regarding which the specific tax on tobacco was collected in advance (or should have been) must take an inventory of all such products they have in stock at midnight on December 31, 2010, and remit, before January 29, 2011, an amount corresponding to the difference between the tax applicable at the new rates and that applicable at the rates in effect before midnight on December 31, 2010.

The same applies to collection officers under an agreement with Revenu Québec who sell tobacco products regarding which the specific tax on tobacco is paid in advance or has not yet been paid.

Reporting income earned outside Québec to the MRQ

If you worked outside Québec, you must report employment income earned outside the province. Please follow the instructions below:

Check the appropriate box if you worked outside Canada.
If the income was earned in Canada and you did not receive an RL-1 slip, check the appropriate box and enclose a copy of your T4 slip with your return.
If you are in either of the above situations, complete Schedule R to find out whether you are required to pay a Québec parental insurance plan (QPIP) premium.

Income earned while you were not resident in Canada
If you were not resident in Canada throughout the year, enter the total income that you earned during the period in which you were not resident in Canada and that is not subject to Québec income tax.

If you earned no income during this period, enter “nil” in the appropriate box.

Family income
If you or your spouse on December 31, 2008 did not reside in Canada throughout the year, you must include in your family income, all of the income that you and your spouse earned, including income earned while you were not resident in Canada.

If your spouse was resident in Canada, outside Québec, you must take into account his or her income for the entire year.

Amounts earned in foreign currency
These amounts must be reported in Canadian dollars. To convert the amounts, use the exchange rate in effect at the time you earned them.

You may use the average exchange rate for the year if the amounts were received over the entire year. For information on the exchange rate, consult the Bank of Canada website.

Is there a requirement for a US company who is mailing a tax document to a resident of Quebec to mail the document in French?

 

After some investigation, speaking to the IRS, and then to the CRA, I found nothing. I should have reached out to the Quebec government.

Legally, an employer must provide a French version of a document if requested by the employee as stipulated in
The Charter of the French Language.  Here is the link: http://www.olf.gouv.qc.ca/english/charter/index.html

2. Every person has a right to have the civil administration, the health services and social services, the public utility enterprises, the professional corporations, the associations of employees and all enterprises doing business in Quebec communicate with him in French.

6. Every person eligible for instruction in Québec has a right to receive that instruction in French

The Penalties:

Section 205. Every person who contravenes a provision of this Act or the regulations adopted by the Government thereunder commits an offence and is liable

(a) for each offence, to a fine of $250 to $700 in the case of a natural person, and of $500 to $l,400 in the case of a legal person;

(b) for any subsequent conviction, to a fine of $500 to $1,400 in the case of a natural person, and of $1,000 to $7,000 in the case of a legal person.

Now we know!