What is RL-3 Slip – Investment Income

RL-3 Slip – Investment Income

The RL-3 slip must be filed by:

any person that paid or credited interest, dividends, capital gains dividends or royalties during the year to a person (hereafter “the recipient”) that was an individual resident in Québec or to a corporation with an establishment in Québec;

any corporation, association, organization or institution that made blended payments during the year to a recipient;

any custodian of funeral arrangements that made a payment that must be included in the income of a recipient;

any person that, as a mandatary or on behalf of a recipient, received during the year any of the income mentioned in the preceding points;

any insurer, with respect to amounts that must be included in calculating the income for the year of a recipient who is a life insurance policyholder;

any person or partnership that is required to report, on behalf of a recipient, the interest accrued in respect of an investment contract.

Purpose of the RL-3 slip

The RL-3 slip is used to report interest, dividends, capital gains dividends or royalties paid or credited to a recipient.

How to Complete the RL-3 Slip (Box by Box Instructions)

Box A1 – Actual amount of eligible dividends

Enter the actual amount of eligible dividends that were paid or are deemed to have been paid to an individualresident in Québec by a taxable Canadian corporation and are eligible for the dividend tax credit.Eligible dividends paid to a minor by a private Canadian corporation must also be included in this box.

Box A2 – Actual amount of ordinary dividends

Enter the actual amount of ordinary dividends that were paid or are deemed to have been paid to an individual resident in Québec by a taxable Canadian corporation and are eligible for the dividend tax credit. Ordinary dividends paid to a minor by a private Canadian corporation must also be included in this box.

Box B – Taxable amount of dividends

Enter the taxable amount of eligible and ordinary dividends. Add the results of the following calculations to determine the taxable amount:

Multiply the amount in box A1 by 138% (for eligible dividends).

Multiply the amount in box A2 by 115% (for ordinary dividends).

Box C – Dividend tax credit

Enter the amount of the dividend tax credit the recipient can claim if they are an individual resident in Québec on December 31 of the year in question. Add the results of the following calculations to determine the tax credit amount:

Multiply the amount in box A1 by 16.1460% (for eligible dividends).

Multiply the amount in box A2 by 3.9330% (for ordinary dividends).

Box D – Interest from Canadian sources

Enter the amount of interest from Canadian sources paid or credited during the year to a recipient. Also enter the interest accrued on behalf of a recipient who is an individual resident in Québec, in respect of an investment contract .

Box E – Other income from Canadian sources

Enter all other investment income, such as:

dividends (other than those entered in boxes A1 and A2) paid:

by a non-taxable Canadian corporation to an individual resident in Québec, or

by any other Canadian corporation, including a taxable Canadian corporation, to another Canadian corporation;

amounts to be included in the income of a life insurance policyholder, where the amounts derive from an insurance policy loan

In box E, custodians of funeral arrangements (that is, funeral or cemetery services) must enter the lesser of the following amounts:

the amount of a payment made to an individual under the arrangement, other than as payment for funeral services;

Box F – Gross foreign income

If you are a mandatary or hold a power of attorney, enter the gross income from foreign sources that you received on behalf of a recipient. Gross income is the net amount received, plus the foreign income tax withheld. Foreign income paid to a minor by a corporation must be included in this box.

Box G – Foreign income tax

Enter the amount of income tax paid on income from foreign sources to the government of a foreign country or a political subdivision of a foreign country

Box H – Royalties from Canadian sources

Enter the amount of royalties from Canadian sources paid to the recipient.If the amount in box H includes income from a copyright (of which an artist or professional artist is the first owner), enter “H-2” in one of the blank boxes, followed by the amount.

Box I – Capital gains dividends

Enter the amount of capital gains dividends paid to a recipient by a mutual fund corporation, an investment corporation or a mortgage investment corporation.

Box J – Accrued income: annuities

Enter the amount of income accrued under a life insurance policy or annuity contract that must be included in the recipient’s income calculation.

Box K – Interest from linked notes

Enter the total deemed interest accrued following the assignment or transfer of linked notes. Any gain realized at the time of an assignment or transfer is deemed interest accrued on the debt obligation for the period beginning before the time of the transfer and ending at the time of the transfer.

the price for which the debt obligation was assigned or otherwise transferred at the time of transfer minus

the amount by which the price for which the debt obligation was issued exceeds the portion of the principal amount of the debt obligation that was repaid by the issuer on or before the time of transfer

If the amount in box K includes foreign interest from linked notes, enter “K-1” in one of the blank boxes, followed by the amount of interest.

For further information please contact Taxtron Support at 416-491-0333 or visit www.taxtron.ca