Electing under section 217
This page provides information for individuals who are interested in choosing to elect under section 217 of the Income Tax Act.
What is a section 217 election?
If you are a non-resident of Canada, Canadian payers have to withhold non-resident tax from qualifying Canadian income paid or credited to you. If the correct amount of tax has been deducted, this non-resident tax is your final tax obligation to Canada on this income. As such, this income is not required to be reported on a Canadian income tax return.
However, you can choose to include all your qualifying Canadian income on a Canadian return and pay tax on this income using an alternative method. If this is the case, you are then "electing under section 217 of the Income Tax Act" and may receive a refund of some or all of the non-resident tax withheld on this income.
If you emigrated from Canada in 2016 the section 217 election would apply to all qualifying Canadian income received after leaving Canada.
If you immigrated to Canada in 2016, contact the International and Ottawa Tax Services Office for the special section 217 rules that apply to you.
Qualifying Canadian income
You can elect to file a tax return under section 217 for the following types of Canadian-source income:
- old age security pension; (see the note below)
- Canada Pension Plan and Quebec Pension Plan benefits;
- most superannuation and pension benefits;
- most registered retirement savings plan payments;
- most pooled registered pension plan payments;
- most registered retirement income fund payments;
- death benefits;
- employment insurance benefits;
- certain retiring allowances;
- registered supplementary unemployment benefit plan payments;
- most deferred profit-sharing plan payments;
- amounts received from a retirement compensation arrangement, or the purchase price of an interest in a retirement compensation arrangement;
- prescribed benefits under a government assistance program; and
- Auto Pact benefits.
Is a section 217 election beneficial?
If you are thinking of electing under section 217, you should first determine if doing so will be to your benefit.
You will benefit from electing to file a return under section 217 if the total tax payable indicated at line 435 on your return is less than the total tax, you would otherwise pay if you did not make this election. When processing your return, the CRA will only take your election under section 217 into account if it is beneficial.
To determine the tax you would otherwise pay, and for more information on whether electing under section 217 is beneficial for you, see Is a section 217 election beneficial? in Pamphlet T4145, Electing under section 217 of the Income Tax Act.
Which tax package should you use?
To file a return under section 217, use the General Income Tax and Benefit Package (for non-residents and deemed residents of Canada).
Filing due date
Generally, your section 217 tax return must be filed on or before June 30 of the year after the tax year.
If you send the Canada Revenue Agency (CRA) your return after this date, according to the Income Tax Act, your section 217 election cannot be accepted. If this is your case and the required amount of non-resident tax was withheld on your eligible 217 income, CRA will consider the amount withheld to be the final tax obligation to Canada on that income. However, if the payer withheld less than the required amount of tax, CRA will send you an assessment for the difference.
If you have a balance owing, you must pay the amount on or before April 30 of the year after the tax year, to avoid interest charges.
If you are reporting other types of Canadian-source income on the same return, such as employment or business income, net Canadian partnership income if you are a limited or non-active partner, or taxable capital gains from disposing of taxable Canadian property, the due date for filing your return may be different. For the more information, see When is your section 217 return due? in the General Income Tax and Benefit Guide for Non-Residents and Deemed Residents of Canada.
Reducing the amount of tax withheld (Form NR5)
If you intend to make a section 217 election, you can apply for a reduction of the non-resident tax that the payer has to withhold on the qualifying Canadian income that you have not yet received.
You can do this by sending, for approval, a completed Form NR5, Application for a Reduction in the Amount of Non-Resident Tax Required to be Withheld, to the International and Ottawa Tax Services Office on or before October 1, or before the first payment is due.
If your Form NR5 is approved:
- It will be valid for a period covering five tax years as long as your situation remains the same during this period. For more information, see Form NR5 - 5-year Administrative Policy.
- The Canada Revenue Agency will authorize the Canadian payer(s) to reduce the amount of non-resident tax deducted from your qualifying income for the duration of the approval period.
- You must file a section 217 return for each year of the approval period.
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