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Hi there,
I have few questions about NR4 slip-
1. What exemption code should be used, since we deducted 15% instead of 25% because of treaty.
2. I am assuming code for dividends issued is 9?
3. If dividend declared is 1000 and tax withheld is 150, then gross income should be 1000?
4. If we have 2 shareholders, can we put their name on same NR4 slip? If yes, then how to put SIN of both people on one slip.
Thanks
Hi Sam,
Here are the answers to your NR4 slip-related questions:
1. Exemption Code for 15% Withholding (Due to Treaty)
If you deducted 15% withholding tax instead of the standard 25% on dividends, you should use the appropriate exemption code from the Canada-U.S. Tax Treaty. The specific code you should use is “01”, which applies when the tax is reduced due to the treaty (e.g., for U.S. residents).
2. Code for Dividends
Yes, the correct code for dividends issued is “9”. This code is used for reporting dividend income on the NR4 slip.
3. Gross Income for Dividends
If the dividend declared is $1,000 and $150 was withheld as tax, the gross income reported on the NR4 slip should indeed be $1,000, not the after-tax amount. The NR4 slip reflects the gross income, and the amount withheld is reported separately as the tax paid.
4. Two Shareholders on the Same NR4 Slip
Yes, you can list both shareholders on the same NR4 slip, but you must ensure that the slip reflects each person’s income and tax withheld separately. You would:
List each shareholder’s income and tax withheld on the appropriate lines, with separate totals for each individual.
For SINs: On a single NR4 slip, each shareholder’s SIN should be listed individually. There is no way to list two SINs for one entry; instead, enter the relevant SIN for each shareholder on their respective lines.
If there are more complex situations, you might need separate NR4 slips, but for two shareholders with separate amounts, one slip is sufficient.
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