A T5 is a tax slip reporting investment income, such as dividends, interest and certain foreign income, paid to an individual during the year.
The T5 Statement of Investment Income reports income from investments: dividends from Canadian corporations (including dividends an owner pays themselves from their company), interest over $50, and certain foreign income. The payer issues it to the recipient and files it with the CRA by the end of February.
For owner-managers, the T5 is how dividends paid from your corporation are reported, so if you take dividends rather than salary, a T5 is prepared each year. The slip separates eligible and non-eligible dividends, which carry different gross-ups and credits.
An owner pays herself $40,000 in dividends from her corporation. The company issues a T5 reporting the dividend, split by type, which she uses to report the grossed-up amount and claim the dividend tax credit on her T1.
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