T5 slip for 2 year GIC's | Page 2 | Income tax filing | Discussion forum

The contractual compounding of a GIC is treated as reinvested payouts. When the payouts, reinvested or not, occur annually or more frequently, then they are reported in the year that they occur.

If that GIC issued in February was a monthly compounding one, like the Simplii Financial ones, then the first T5 slip would be issued in 2026 for compoundings during March - Dec 2025.

If you buy a NON REGISTERED GIC.

For a term of MORE than 1 year.

o AND compounds interest, and pays out all interest out at maturity

o OR Interest pays out monthly or annually

You WILL get a T5 slip EVERY YEAR. By the end of February or a few days later if the month ends on a weekend.

One year term GIC. Gets 1 T5
Two year term GIC. Gets 2 T5’s
Three year term GIC. Gets 3 T5’s
Four year term GIC. Gets 4 T5’s
Five year term GIC. Gets 5 T5’s

THE EXAMPLE ABOVE IS IF YOU ONLY HAD ONE GIC. IF YOU HAVE NUMEROUS GICS THEN THE T5 SLIP WILL STATE INTEREST FOR ALL INTEREST ACCUMULATED IN THAT YEAR FROM ALL GICS. YOU SHOULD ONLY RECEIVE ONE T5 PER FI.

So you buy a GIC in March 2022 and it pays interest in March 2023 you will receive a T5 for that one year of interest and should arrive by end of February 2024.

Or put another way.
For a typical 5-year GIC held in a non-registered account, you will receive a T5 slip for interest earned in EACH of the five years, even if the interest isn't paid out to you annually. This is because GIC interest must be reported and taxed as it is earned each year (accrued). Your financial institution will issue a T5 slip if the amount of interest earned in a given year is $50 or more.

HISAhopper said
I have a 2 year non-registered GIC bought on 30 Feb 2025 with principle $100K and 4% annual interest rate from OAKEN.
How would Oaken do the T5 slip for tax year 2025, 2026 and 2027?
I need to know in order to manage the withdrawal amount of RRSP each year as it depends on the total income of the year
Thanks for any help  

The answer is simple. You will have two T5 slips for year 2026 and 2027. No slip for 2025. 4000$ for 2026 and 2027 4000$ or 4016$ (if chosen compound).

HISAhopper said
My 1st year trying to meltdown the RRSP pot, thus need to control the total annual income each year going forward.
Nice to know that I will only receive one T5 per FI, great information above.
Thanks GIC-Fanatic  

Ok. Assuming you are winding down RRSP and want to stay in current tax bracket or lower.

Take into account, age, spouse, all taxable income, income sharing/splitting with spouse, loss or reduction of any income based programs like our universal dental.

Are you eligible for the $1000 pension credit already or will the RRSP withdrawal make you eligible for it?

Pull a copy of mandatory % rates for RRIF withdrawals at age 71/2.

Any benefit to move some RRSP to RRIF, then withdraw from RRIF. Not likely but should verify. Under age 71 you can have a RRIF and an RRSP. But once in RRIF and under 71….not sure….. expect to have a mandatory withdrawal.

Assuming you’re not in Quebec you can withdraw $5000 or less multiple times and have a 10% hold back. If over $5000 then a 20% holdback. Quebec is 20% hold back on any amount. But keep in mind a holdback is a holdback … the true amount of taxation is based on your annual tax return.

Having your own tax software is a bonus. Take your last return(s), if comparable for testing, copy it to a new file name and run your T5’s for $4000 interest and your RRSP withdrawals and if 5% is with drawn a fake Tslip would show ..say… 5000 withdrawn and $500 to taxes. I take the renamed file and run the software on a second computer.

Did I forget anything? Probably.

I never report anything to CRA other than what (correct) T5 slips are issued to me for the year.

Notwithstanding the Act's rules for timing of reporting accrued interest income, etc CRA would have no clue what I'm doing, all their computer and clueless staff care about is that your reported interest income for the year matches the T5s issued to you (and the copy filed to CRA by FI) for the year, so I keep them happy that way.

Anything else and you're just asking for CRA trouble, in my experience.

Wrayzor said

You will receive one T5 per CDIC "Member Institution" not per FI.

Also, on the pension credit - it's $2,000, but only applies to certain types of income. RRSP withdrawals are not eligible, but RRIF withdrawals are. If you have no other eligible pension income, you could transfer some of your RRSP money to a RRIF and withdraw from the RRIF. You have to be 65 to claim the pension credit.

If applicable, the splitting of pension income is a good way to manage tax brackets. As GIC-Fanatic mentioned, using last year's tax software to run a simulation of this year's tax return is quite helpful to determine the amount of withdrawals to stay under your desired income threshold.  

By institution….good point. I’m not in one of those situations.

The rest……thanks for completing. Was a long time ago that I started to deplete RRSP and RRIF. I knew the loop holes way back but it’s all automatic for me now.

Hopefully these informations will help and not overwhelm @HISAhopper

RetirEd said
I always report interest without a T5 - pennies usually - and it's never caused any blow-ups.

That RRIF withdrawals can me mitigated through the Pension Income Credit is new to me - another useful bit I've learned here! Must make a note for next tax season.  

Not only RRIF. I believe any non government pension will be entitled.
All of my tax software does it automatically.
Take a look at your last return. Line 31400

The "$1000 pension credit" refers to the maximum amount of pension income eligible for the British Columbia (B.C.) provincial pension income tax credit, which for 2024 and 2025 is $1,000. There is a separate federal pension income tax credit on up to $2,000 of eligible pension income.
British Columbia Pension Income Tax Credit
Amount: The credit is based on the first $1,000 of eligible pension income.
Rate: The tax credit rate is 5.06%.
Eligibility: You must be a resident of B.C. at the end of the year and receive eligible pension income.
Nature: It is a non-refundable tax credit, meaning it can reduce your B.C. provincial tax payable to zero, but you will not receive a refund for any unused amount.
Federal Pension Income Tax Credit
In addition to the B.C. credit, there is a federal tax credit available:
Amount: The credit is based on up to $2,000 of eligible pension income.
Rate: The federal tax credit is calculated at the lowest federal marginal tax rate, which is 15%. This means a maximum federal tax saving of $300 annually ($2,000 × 15%).
Eligibility: To claim the federal credit, you must report eligible pension income on your tax return.
If you are 65 or older, eligible income is broadly defined to include payments from registered pension plans (RPPs), Registered Retirement Income Funds (RRIFs), and certain annuities.
If you are under 65, the eligible income is more restrictive, generally limited to life annuity payments from an employer RPP or payments received due to the death of a spouse or common-law partner.
Nature: This is also a non-refundable tax credit, but any unused amount can generally be transferred to a spouse or common-law partner.
Key Exclusions
Income from Old Age Security (OAS) benefits or Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) benefits is not eligible for the pension income tax credit.

Wrayzor said

If you haven't been claiming it while eligible (65+), you could refile returns for past years. If it's several years of returns, it could be worth the effort.  

As was previously mentioned, tax software should have automatically taken care of that (BC and Fed) as a result of the tax slip data input for RRIF income.

Ohhh dicey question for this group.

I use Studio Tax.
$17.50. Does go up a bit every now and then.
https://www.studiotax.com/home.html

I used to use TurboTax but they got stupid and had no MacVersion and I believe there was some “cloud” involvement. Save to cloud….don’t recall.

Studio Tax was recommended by a few here and I have been using for years and totally satisfied. 100%.

A few quirks to remember year to year. I just jot it down and put a reminder in my tax folder They have some on line help and if you email them, you’ll be emailed by the next day by a “human”. The quirk for me was splitting GIC income 50/50 but sounds like not a concern for you.

It improves every year. Yours sounds simple, so Studio Tax would be an option.

But others have found free software that is satisfactory for them and I am sure their recommendations will come to this thread or in December. I stay away from free….hitches, glitches, loss of privacy is possible.

Studio Tax is reasonably priced, is on my hard drive, and the files created are on my hard drive. And there is a Mac version along with 3 other versions. And CANADIAN!

Take a look. Make your operating system is compatible, be prepared to buy online, be prepared to download the software.

HISAhopper said
Oh, I was thinking of a tax software I saw on youtube that builds a financial picture for a client for the next 20 years, to advice client when to sell the house, the best time to take CPP or OAS, how much to withdraw from RRSP, etc...
It looks heavy duty, more into financial planning I guess.  

A financially picture is "you" setting your expectations and building from there.
Best time for OAS and CPP is "your" decision. I took CPP early as it's a gamble based on your life span which includes your life expectancy as per your expected health and keep in mind it's possible to NEVER have any. There are publications on getting more CPP and OAS by taking it later in life. I chose early as I was double dipping for 5 years on and saved 1/2 of it for the future. Make your choice, change your choice if you need to...and live with it as a base for your plan. As far as I am concerned pull funds from RRSP RRIF as soon as possible "if" you don't go into the next tax bracket (or not too far into it) and set income taxes aside so you are not short. And I buy TFSA with my withdrawn RRIF. And if I recall I moved all withdrawals to a RRIF account (from my RRSP account) and then did from there.

I would say... you need a plan for each, sell the house, start date to take CPP or OAS, and how much to withdraw from RRSP. Each plan needs to be revised if necessary and of course there is some overlapping and you will develop a method of making any adjustments.

Or you can get an adviser that pretends to have a glass ball and has a bunch of excuses.

My guess you can start now with no lash back RRSP => RRIF => TFSA.

Keep in mind the RRSP/RRIF is taxable if you put the withdrawn funds into a non registered investment but NOT if in a TFSA. But on the other hand you "might" be in a high tax bracket if you only take out the mandatory amount. And then if you pass, then depending on the estate handles your taxes....if done the worst way your RRIF will be taxed at the highest rates possible.