Canadian Tax Glossary

Your Complete Guide to CRA Terms & T-Slip Terminology

About This Glossary

Tax terminology can be confusing. This glossary explains common terms you'll encounter on your T-slips, tax forms, and CRA correspondence in plain language. Terms are organized alphabetically for easy reference.

A

Adjusted Cost Base (ACB)

The cost of an investment property or asset adjusted for certain additions and deductions. Used to calculate capital gains or losses when you sell. For example, if you bought stocks for $1,000 and paid $50 commission, your ACB is $1,050.

Allowable Business Investment Loss (ABIL)

A special type of capital loss that occurs when shares or debt in a small business corporation become worthless. Unlike regular capital losses (which only offset capital gains), ABILs can be deducted against any income, making them more valuable.

Assessment

CRA's official review and acceptance of your tax return. You'll receive a Notice of Assessment showing the amount of tax you owe or refund you'll receive. This is different from a reassessment, which is a change made after the initial assessment.

Auto-Fill My Return (AFR)

A CRA service that automatically imports your tax information (T4s, T5s, RRSP contributions, etc.) directly into your return or your tax preparer's software. Makes filing faster and more accurate by eliminating manual data entry.

B

Basic Personal Amount

A non-refundable tax credit that every Canadian resident can claim. For 2024, it's $15,705. This means you don't pay federal tax on your first $15,705 of income (roughly $2,355 in tax savings).

Box Numbers

Numbered fields on T-slips that contain specific information. For example, Box 14 on your T4 shows employment income, Box 16 shows CPP contributions. Each box number corresponds to a line on your tax return.

Business Number (BN)

A unique 9-digit identifier assigned by CRA to businesses, self-employed individuals, and corporations. Used for GST/HST accounts, payroll accounts, and corporate tax accounts. Format: 123456789.

C

Canada Child Benefit (CCB)

A tax-free monthly payment for families with children under 18. Amount depends on your income, number of children, and their ages. You must file a tax return annually to continue receiving it, even if you have no income.

Canada Pension Plan (CPP)

A mandatory retirement savings program for working Canadians. If you're employed, you and your employer each contribute 5.95% (2024 rate) of your earnings between $3,500 and $68,500. If self-employed, you pay both portions (11.9%).

Capital Gain/Loss

Profit (gain) or loss from selling investments, property, or other capital assets. Only 50% of capital gains are taxable. Capital losses can only offset capital gains, not regular income. Reported on Schedule 3.

Carrying Charges

Expenses you can deduct for earning investment income, such as investment counsel fees, accounting fees for investment income, interest on money borrowed to invest, and safety deposit box fees (if used to store investments).

Clawback

Reduction or elimination of government benefits (like OAS or EI) if your income exceeds certain thresholds. For example, Old Age Security is reduced if your net income exceeds approximately $86,000 and eliminated around $142,000.

Common-Law Partner

For tax purposes, a person you've lived with in a conjugal relationship for at least 12 continuous months (or less if you have a child together). Your marital status affects many credits, benefits, and income-tested programs.

CRA My Account

Your secure online portal to view tax information, manage direct deposit, check refund status, view notices of assessment, adjust returns, and access T-slips. Accessible at canada.ca/my-cra-account.

D

Deduction

An amount you subtract from your total income to reduce taxable income. Common deductions include RRSP contributions, union dues, childcare expenses, and moving expenses. Deductions are more valuable than credits because they reduce income at your marginal tax rate.

Dependant

A person who relies on you for financial support, typically your children or other family members. Claiming dependants can provide tax credits like the eligible dependant credit, Canada Caregiver Amount, or disability transfer credits.

Direct Deposit

Electronic transfer of your tax refund directly into your bank account. Much faster than waiting for a cheque (usually within 8 business days for NETFILE). Set up through your tax software or CRA My Account.

Disability Tax Credit (DTC)

A non-refundable tax credit for individuals with severe and prolonged physical or mental impairment. Requires medical certification (Form T2201). Worth about $1,500+ federally and can be transferred to supporting family members. Also opens eligibility for RDSP.

E

Earned Income

For RRSP purposes, includes employment income, self-employment income, rental income, and certain disability payments. Does NOT include investment income, pension income, or government benefits. Your RRSP contribution room is 18% of previous year's earned income.

Eligible Dependant Credit

Tax credit for single parents or single individuals supporting a dependant (child, parent, grandparent, etc.). Worth about $2,350 in federal tax savings. You must be single and support a dependant who lives with you.

Employment Insurance (EI)

Mandatory insurance providing temporary income if you lose your job, are on maternity/parental leave, or are caring for a seriously ill family member. Employees pay 1.66% (2024 rate) of insurable earnings up to $63,200. Self-employed can opt in.

Express NOA (Notice of Assessment)

Paperless option where your Notice of Assessment is available only online through CRA My Account instead of by mail. Faster and environmentally friendly. You'll receive an email notification when it's ready.

F

Federal Tax

Income tax paid to the federal government, calculated on your taxable income using progressive tax brackets. For 2024: 15% up to $55,867, 20.5% up to $111,733, 26% up to $173,205, 29% up to $246,752, and 33% on amounts over that.

Filing Deadline

April 30 for most individuals. If you or your spouse are self-employed, deadline is June 15 (but any taxes owed are still due April 30). Missing the deadline results in late-filing penalties: 5% of balance owing plus 1% per month up to 12 months.

First-Time Home Buyers' Tax Credit (HBTC)

Non-refundable tax credit worth $1,500 for first-time home buyers. Qualifies if neither you nor your spouse owned a home in the past 4 years. Can be claimed in the year you acquire a qualifying home.

Foreign Income

Income earned from sources outside Canada, including foreign employment, rental properties, pensions, or investments. Must be reported on your Canadian tax return if you're a Canadian resident. You may receive foreign tax credits for taxes paid to other countries.

G

Gross Income

Total income before any deductions. This is the starting point on line 15000 of your return. Includes employment income, self-employment income, investment income, pensions, and benefits.

GST/HST Credit

Quarterly tax-free payment to help low and modest-income individuals and families offset GST/HST paid. Automatically calculated when you file your tax return—no separate application needed. Amount based on income and family size.

Guaranteed Income Supplement (GIS)

Monthly non-taxable benefit for low-income seniors receiving Old Age Security. Automatically assessed based on your tax return. Must file taxes annually to continue receiving it, even if you have no income to report.

H

Home Buyers' Plan (HBP)

Program allowing first-time home buyers to withdraw up to $35,000 from RRSP tax-free to buy or build a qualifying home. Must be repaid over 15 years starting the second year after withdrawal. Missing repayments adds amount to income.

Home Office Expenses

Portion of home expenses (utilities, insurance, property tax, rent) deductible if you use part of your home for business or employment. For employees, requires employer to complete Form T2200. For self-employed, must be principal place of business or used regularly for meeting clients.

I

Indexed Benefits

Benefits and tax brackets that increase annually with inflation. Examples include CPP, OAS, and tax bracket thresholds. Ensures purchasing power isn't eroded by inflation.

Instalments

Quarterly tax payments required if your net tax owing exceeds $3,000 for the current year and either of the two previous years. Common for self-employed, rental property owners, and those with significant investment income. Due March 15, June 15, September 15, and December 15.

Interest Income

Money earned from savings accounts, GICs, bonds, or loans you've made. Reported on T5 slip. Fully taxable as regular income (unlike dividend income which gets preferential treatment).

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L

Lifelong Learning Plan (LLP)

Program allowing you to withdraw up to $10,000/year (max $20,000 total) from RRSP tax-free to finance full-time education for you or your spouse. Must be repaid over 10 years. Different from HBP but similar concept.

Line Numbers

Standardized numbers on tax forms that identify where specific information goes. For example, line 10100 is employment income, line 20800 is RRSP deduction, line 42000 is federal tax. Makes it easier to locate and verify information.

Lump Sum Payment

One-time payment for amounts that should have been paid over multiple years (like pension retroactive payments or employment arrears). Special tax treatment may apply to reduce your tax burden compared to treating it all as current year income.

M

Marginal Tax Rate

The tax rate you pay on your last dollar of income. Combines federal and provincial rates. For example, if you're in the 29.65% bracket (BC), you pay $29.65 in tax for every additional $100 earned. Important for understanding value of deductions and cost of extra income.

Medical Expenses

Eligible healthcare costs exceeding 3% of net income or $2,479 (whichever is less). Include prescriptions, dental, vision care, medical devices, certain home renovations for disability, private health insurance premiums, and more. Claim for any 12-month period ending in the tax year.

Moving Expenses

Costs of moving at least 40 km closer to a new work or school location. Deductible expenses include transportation, storage, temporary accommodation (up to 15 days), and costs to cancel old lease or sell old home. Must have income at new location.

N

Net Income

Your total income minus deductions like RRSP contributions, union dues, childcare expenses, etc. This is line 23600 on your return. Used to determine eligibility for many benefits and credits (CCB, GST credit, OAS clawback, etc.).

NETFILE

CRA's electronic filing service. Most tax software uses NETFILE to submit returns online. Provides instant confirmation of receipt and faster processing (usually 8 business days for refunds with direct deposit vs. 8 weeks for paper).

Non-Refundable Tax Credit

Credit that reduces taxes owed but cannot create a refund. Examples: basic personal amount, tuition, charitable donations, medical expenses. Worth the credit rate (15% federal) times the credit amount. If you owe $0 tax, these credits provide no benefit.

Notice of Assessment (NOA)

Official document from CRA showing they've processed your return, confirms your balance owing or refund, and provides updated carry-forward amounts (RRSP room, tuition credits, capital losses). Keep this—lenders often request it for mortgages/loans.

Notice of Objection

Formal process to dispute a CRA assessment or reassessment. Must be filed within 90 days of assessment date (one year for individuals in some cases). Pauses collection action while CRA reviews. Consider professional help for complex objections.

O

Old Age Security (OAS)

Monthly taxable benefit for Canadians 65+ who meet residency requirements. Amount depends on how long you've lived in Canada. Subject to clawback (repayment) if net income exceeds approximately $86,000. Not the same as CPP—this is funded by general tax revenues.

Other Income

Catch-all category for miscellaneous income like scholarships, death benefits, RESP withdrawals, TFSA excess contributions penalty, and other amounts that don't fit standard categories. Reported on line 13000.

P

Pension Adjustment (PA)

Amount shown on your T4 (Box 52) that reduces your RRSP contribution room for next year. Represents the value of pension benefits you earned through an employer pension plan or DPSP. The idea is you shouldn't get full RRSP room AND a generous pension.

Pension Income Amount

Non-refundable credit worth about $300 federally ($2,000 × 15%) if you receive eligible pension income. Eligible if 65+ receiving any pension, or under 65 receiving life annuity payments. Allows income splitting with spouse.

Principal Residence Exemption

Exemption that eliminates capital gains tax on the sale of your primary home. Must designate property as principal residence for each year owned. Generally covers home + up to 1/2 hectare of land. Must report sale on Schedule 3 even though gain is exempt.

Provincial Tax

Income tax paid to your province/territory, calculated separately from federal tax. Each province has own rates and brackets. Combined with federal tax to determine total taxes owed. Rates vary significantly—BC and Alberta generally lower, Quebec and Atlantic provinces higher.

R

Reassessment

When CRA changes your already-assessed tax return. Can happen if CRA finds errors, receives new information, or you request a change. Can result in owing more tax (with interest) or receiving additional refund. You have 90 days to object if you disagree.

Refund

Money returned when you've overpaid taxes through payroll deductions, instalments, or tax withheld at source. Processing time: 8 business days (NETFILE + direct deposit), 2 weeks (NETFILE + cheque), 8 weeks (paper). Check status online through CRA My Account.

Refundable Tax Credit

Credit that can create or increase a refund even if you owe no tax. Examples: GST/HST credit, Canada Workers Benefit, refundable medical expense supplement. More valuable than non-refundable credits because you receive the full benefit regardless of taxes owed.

Registered Disability Savings Plan (RDSP)

Long-term savings plan for individuals eligible for DTC. Government contributes grants (up to $3,500/year) and bonds (up to $1,000/year) for low-income families. Contributions aren't deductible but growth is tax-deferred. Must maintain until 60 to maximize benefits.

Registered Education Savings Plan (RESP)

Tax-deferred savings for child's education. Government adds Canada Education Savings Grant (20% on first $2,500/year = $500) and Canada Learning Bond for low-income families. Contributions not deductible but growth is tax-deferred. Withdrawals taxed in student's hands (usually low/no tax).

Registered Retirement Savings Plan (RRSP)

Tax-deferred retirement savings. Contributions are deductible (reduce current taxes). Growth inside plan is tax-free until withdrawal. Contribution limit: 18% of prior year's earned income (max $31,560 for 2024) plus unused room. Must convert to RRIF or annuity by age 71.

Rental Income

Income from renting out property. Reported on Form T776. Can deduct expenses like property tax, insurance, repairs, utilities, advertising, and mortgage interest (but not principal). Must report gross rent and all expenses—can't just report net amount.

Represent a Client

CRA's online system where you authorize someone (like a tax preparer or accountant) to access your tax information and communicate with CRA on your behalf. More convenient than paper Form T1013. Authorization can be level 1 (view only) or level 2 (view and change).

S

Schedule

Supplementary forms that provide detail for specific types of income, deductions, or credits. Common schedules: Schedule 1 (federal tax), Schedule 3 (capital gains/losses), Schedule 11 (tuition), T2125 (business income), T776 (rental income).

Self-Employment Income

Business or professional income earned when you work for yourself. Reported on Form T2125. Can deduct business expenses to calculate net income. Must pay both portions of CPP (11.9%). May need to charge/remit GST/HST if revenue exceeds $30,000.

Social Insurance Number (SIN)

9-digit identifier required for filing taxes, working in Canada, and accessing government benefits. Format: 123-456-789. Keep confidential—it's the key to your tax and government benefit information. Required for dependants to claim certain credits.

Spousal RRSP

RRSP where higher-income spouse contributes but lower-income spouse is the annuitant/owner. Used for income splitting in retirement. Contributor gets the deduction now; beneficiary pays tax on withdrawals later (ideally at lower rate). Attribution rules apply if withdrawn within 3 years.

Support Payments

Regular payments made under court order or written agreement following separation/divorce. Child support is NOT deductible/taxable. Spousal support (alimony) IS deductible by payer and taxable to recipient if agreement made before May 1997 or meets current tax rules.

T

T1 General

The main personal income tax return form for individuals. Where you report all income, claim deductions and credits, and calculate taxes owed or refund. Filed annually by April 30 (June 15 for self-employed).

T2125

Statement of Business or Professional Activities. Form where self-employed individuals report business revenue and expenses. Calculates net business income that flows to your T1. Essential for anyone operating a business or working as an independent contractor.

T2200

Declaration of Conditions of Employment. Form your employer signs certifying you were required to pay certain employment expenses (vehicle, home office, supplies, etc.). Required before you can claim these on Form T777. Employer keeps copy, you keep copy.

T3

Statement of Trust Income Allocations and Designations. Reports income from mutual fund trusts, investment trusts, or other trusts. Shows capital gains, dividends, foreign income, and return of capital. Important for investors—affects both current year tax and adjusted cost base.

T4

Statement of Remuneration Paid. The most common slip—shows employment income, CPP contributions, EI premiums, income tax deducted, and pension adjustments. Issued by employer by end of February. Box 14 (employment income) is the key number.

T4A

Statement of Pension, Retirement, Annuity, and Other Income. Reports pension income, RESP withdrawals, death benefits, scholarships, research grants, self-employment commissions, and other income. Different boxes for different types—read carefully.

T4A(OAS)

Statement of Old Age Security. Reports OAS benefits received. OAS is taxable income and subject to clawback at higher incomes. If you received OAS, this slip shows the amount and tax withheld (if any).

T4A(P)

Statement of Canada Pension Plan Benefits. Reports CPP retirement, disability, or survivor benefits received. CPP is taxable income. Shows amount received and any tax withheld.

T4E

Statement of Employment Insurance and Other Benefits. Reports EI benefits (regular, maternity/parental, sickness, etc.). EI is taxable income. Shows benefits received and tax withheld. Also shows if you repaid benefits or if repayment is required.

T4RSP

Statement of RRSP Income. Reports RRSP/RRIF withdrawals. Amount is fully taxable as income. Shows amount withdrawn and tax withheld (10% on first $5,000, 20% on $5,000-$15,000, 30% over $15,000 in most provinces). Does NOT include HBP or LLP withdrawals.

T5

Statement of Investment Income. Reports interest, dividend, and foreign income from investments. Common boxes: 13 (interest), 24 (eligible dividends), 25 (non-eligible dividends). Banks and brokerages issue these for savings accounts, GICs, and investment portfolios.

T5007

Statement of Benefits. Reports social assistance and workers' compensation payments. Workers' compensation is NOT taxable but must be reported to calculate certain credits. Social assistance may be taxable depending on type and province.

T5008

Statement of Securities Transactions. Reports sale proceeds from stocks, bonds, and mutual funds. DOES NOT show capital gain/loss—you must calculate using adjusted cost base. Common source of errors—many people mistakenly report proceeds as gain.

T5013

Statement of Partnership Income. Reports your share of income/loss from a partnership. Common for professional partnerships (law firms, medical clinics), joint ventures, or limited partnerships. Shows business income, capital gains, foreign income, etc.

T776

Statement of Real Estate Rentals. Form for reporting rental income and expenses from residential or commercial properties. Shows calculation of net rental income (or loss). Must be filed even if property breaks even or loses money.

T777

Statement of Employment Expenses. Form where employees claim deductible work-related expenses (vehicle, home office, supplies, etc.). Requires employer-signed T2200. Calculate expenses and deductible portion—most expenses only partially deductible.

Taxable Income

Your net income minus additional deductions (like stock option deductions, northern residents deductions, etc.). This is line 26000—the amount your federal and provincial taxes are calculated on. Lower taxable income = lower taxes.

Tax-Free Savings Account (TFSA)

Registered account where investment growth and withdrawals are completely tax-free. Annual contribution room ($7,000 for 2024) accumulates if unused. Unlike RRSP, contributions not deductible but no tax on withdrawals. Perfect for emergency funds and non-retirement goals.

Tax Installments

See "Instalments" above.

Tuition Tax Credit

Non-refundable credit for eligible tuition fees paid to Canadian post-secondary institutions or certain foreign universities. Reported on T2202. Worth 15% federally. Unused amounts carry forward indefinitely or can be transferred to spouse, parent, or grandparent (up to $5,000).

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U - V

Universal Child Care Benefit (UCCB)

Replaced by Canada Child Benefit (CCB) in 2016. If you see this term on older documents, it refers to the previous system. UCCB was taxable; CCB is not.

Unused Tuition, Education, and Textbook Amounts

Tuition credits you didn't need to reduce your taxes to zero. These carry forward indefinitely and can be used in future years when you have more income. Shown on your Notice of Assessment. Can also be transferred to supporting family members (up to $5,000).

Voluntary Disclosures Program (VDP)

Program allowing taxpayers to correct past tax returns or disclose unreported income before CRA discovers it. If accepted, can eliminate penalties and reduce interest. Must be voluntary (CRA hasn't started enforcement), complete, and involve penalty exposure. Professional advice recommended.

W - Z

Withholding Tax

Tax deducted at source from payments like employment income (shown on T4), RRSP withdrawals (T4RSP), or payments to non-residents. Acts as prepayment of your annual tax obligation. If too much withheld, you get refund; too little, you owe at tax time.

Workers' Compensation

Payments received for workplace injuries or illness. Not taxable but must be reported on line 14400 (shown on T5007 slip). Used to calculate certain credits and affects social benefit repayments. Keeps system fair by treating it like income for benefit purposes.

Working Income Tax Benefit (WITB)

Now called Canada Workers Benefit (CWB). See Canada Workers Benefit above.

Quick Reference: Common T-Slips at a Glance

T-Slip	What It Reports
T4	Employment income, CPP, EI, tax withheld
T4A	Pension, scholarships, self-employment commissions
T4E	Employment Insurance benefits
T4RSP	RRSP/RRIF withdrawals
T5	Interest, dividends, investment income
T3	Trust income (mutual funds, investment trusts)
T5008	Securities sales (stocks, bonds, mutual funds)
T2202	Tuition and enrollment (from educational institutions)

Important Tax Deadlines

Date	Deadline
March 1	RRSP contribution deadline for previous tax year
April 30	T1 filing deadline for most individuals AND payment due date for all
June 15	T1 filing deadline for self-employed (but taxes still due April 30)
Quarterly	Tax instalments due (March 15, June 15, Sept 15, Dec 15)

Keep This Glossary Handy!

Bookmark this reference guide and use it whenever you encounter unfamiliar tax terminology. Understanding your taxes is the first step to taking control of your financial future. Remember: when in doubt, professional help ensures accuracy and peace of mind.

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