Annuity payments

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• Steps
• References

Steps

1. Determine if you need to report the payment on a slip

   If you make annuity payments to a person, you have to report the payments and income tax deductions on a T4A slip. Depending on the type of annuity payment or the situation, you may need to fill out a T4RSP, T4RIF, T4-RCA or NR4 slip instead.

   What is an annuity

   An annuity is a financial product that provides an individual with a guaranteed regular income. Generally, it is used during retirement and sold by an annuity provider, such as a life insurance company.

   This includes all amounts payable on a periodic basis, whether payable under a contract, will, trust or otherwise.

2. Withhold payroll deductions and remit GST/HST

   You must withhold the following deductions:

   • Income tax
   • CPP (do not withhold)
   • EI (do not withhold)

   Learn more: Calculate income tax deductions

3. Report the payment on a slip

   You must report the payments on the following slip depending on the type of annuity payment:

   • T4A slip

     • Disability benefits paid as a life annuity out of superannuation or a registered pension plan (RPP).

     • • Box 016 - Pension or superannuation

     • Taxable part of lump-sum death benefits paid out of an advanced life deferred annuity (ALDA).

     • • Box 018 - Lump-sum payments

     • Annuity payments from a life annuity bought from the proceeds of a life income fund (LIF) or an ALDA.

     • • Box 024 - Annuities

     • Annuity payments from a life annuity bought from the proceeds of an income averaging annuity contracts (IAAC).

     • • Box 024 - Annuities
       • Code 111 - IAAC

     • Annuity payments from a life annuity bought from the proceeds of a deferred profit sharing plan (DPSP).

     • • Box 024 - Annuities
       • Code 115 - DPSP annuity or instalment payments

     • Variable payment life annuity (VPLA) payments made out of a pooled registered pension plan (PRPP) or money purchase RPP.

     • • Code 133 - Variable pension benefits

     • Annuity payments from a PRPP.

     • • Code 194 - PRPP payments

     Learn more: T4A slip - Information for payers

   • T4RSP slip

     • Annuity payments from an annuity that an individual purchased with a refund of premiums from a deceased annuitant’s registered retirement savings plan (RRSP).

     • • Box 16 - Annuity payments

     Learn more: T4RSP Statement of RRSP income

   • T4RIF slip

     • Annuity payments made in the year on or after maturity of the plan.

       Do not report on the T4RIF slip if the annuity payments is from a life annuity bought from the proceeds of a LIF. In this situation, you must report on the T4A slip using box 024.

     • • Box 16 - Taxable amounts

     Learn more: T4RIF Statement of Income from a Registered Retirement Income Fund

   • T4-RCA slip

     • Payments made in the year from a retirement compensation arrangement (RCA) in respect of a life annuity attributable to periods of employment for which benefits are also provided to the individual under a RPP.

     • • Box 16 - Distributions
       • Box 17 - Distributions eligible for pension income splitting

     Learn more: T4A-RCA slip - Retirement Compensation Arrangement (RCA) trust

   • NR4 slip

     • Annuity payments made to a non-resident.

     • • Box 16 - Gross income

     Learn more: NR4 slip

References

Related

• Annuities

Legislation