T3 – Statement of Trust Income Allocations and Designations

If you held units of a mutual fund trust, or you were a beneficiary of a trust, a T3 slip arrives to tell you what the trust allocated to you during the year — and, just as importantly, what kind of income each part was.

You do not prepare it. You receive it and use the boxes when you file.

What it reports

The T3, Statement of Trust Income Allocations and Designations, reports amounts a trust allocated and designated to you. A trust can pass along several kinds of income at once — capital gains, dividends, foreign income, pension income — and each kind is reported on a different line of your return. The boxes are how you tell them apart.

Who sends it

Trusts, including mutual fund trusts, that allocate income to their beneficiaries.

The dividend boxes are a group, not a list

Boxes 23, 49, 32, 50, 39 and 51 all deal with dividends from Canadian corporations, and only some of them are reported.

The amounts you have to report as income are the ones in box 32 and box 50. Include the total of these on line 12000 of your return.
Also include the amount in box 32 on line 12010.
The federal dividend tax credit you are entitled to is the total of box 39 and box 51. Include that on line 40425.

Boxes 23 and 49 show the dividends themselves; boxes 32 and 50 are the taxable amounts that go on the return.

Capital gains and other income

Box 21 – Capital gains. Subtract any amount in box 30 from the amount in box 21, and include the difference on line 17600 of Schedule 3. All or part of box 21 may be foreign non-business income, which will be footnoted; include any footnoted amount for foreign non-business income on line 43300 of Form T2209.
Box 30 – Capital gains eligible for deduction. Include the footnoted amounts for qualified small business corporation shares, and for qualified farm or fishing property, on the relevant lines of Schedule 3.
Box 26 – Other income. Subtract any amount in box 31 from the amount in box 26, and include the difference on line 13000.
Box 37 – Insurance segregated fund net capital losses. Include this loss on line 17600 of Schedule 3.
Box 42 – Amount resulting in cost base adjustment. This represents a distribution or return of capital from the trust. Follow the instructions in the footnote area and adjust the cost base of the property at the end of the tax year.

Two boxes are subtracted from another before anything is reported — box 30 from box 21, and box 31 from box 26. Doing the subtraction is the whole job.

Pension, foreign and credit boxes

Box 22 – Lump-sum pension income. Include this amount on line 13000. It may be transferable to an RRSP or an RPP; Guide T4040 covers that.
Box 24 – Foreign business income. Include this on line 13500 and on Form T2209.
Box 25 – Foreign non-business income. Include this on line 12100 and on line 43300 of Form T2209.
Box 31 – Qualifying pension income. Include this on line 11500 and in the calculation for line 31400.
Box 33 and box 34 – Foreign tax paid. Business income tax goes on line 4 of Form T2209; non-business income tax goes on line 1 of the same form.
Box 38 – Part XII.2 tax credit. Include this on line 45600.
Boxes 40, 41 and 43 – Investment tax credit. Include these on Form T2038(IND). See the statement provided by the trust for the code number.
Box 45 – Other credits. For Newfoundland and Labrador, the footnoted amount goes on Form T1129. For Yukon, it goes on Form T1232.
Box 48 – Eligible amount of charitable donations. Depending on the type of donation, include this on line 33700, 33900, 34000 or 34200 of Schedule 9.

Boxes already inside box 26

Three boxes describe part of box 26 rather than adding to it. Reporting them separately would count the same allocation twice.

Box 35 – Eligible death benefits. Included in box 26. Part of it may be excluded from income; line 13000 in the Federal Income Tax Guide has the details.
Box 46 – Pension income qualifying for an eligible annuity for a minor. Already included in box 26.
Box 47 – Retiring allowance qualifying for transfer to an RPP or RRSP. Already included in box 26.

If a slip is late or looks wrong

The trust that issued the slip is the one to ask. Several boxes on a T3 point to a footnote area on the slip, so a slip that arrives without its footnotes is incomplete — ask the trust for the whole document.

The Canada Revenue Agency (CRA) page this article is written from does not state a date by which the slip has to reach you. That page was also last revised some years ago, so confirm the current-year guidance for any box you are unsure about.

What to keep

Keep the slip together with the statement the trust provides alongside it. The footnotes and the code numbers live on that statement, and boxes 21, 30, 40, 41, 43 and 45 all depend on them.

Keep the slip for the year even if the amounts are small: box 42 can change the cost base of what you hold, which matters in a later year rather than this one.

Dossier stores the slip and identifies it as a T3, so it is with the rest of your year's paper. It does not read the amounts off it, and it does not do the box 21 or box 26 subtractions; those are worked out when you file.

Official CRA sources

Source: Canada Revenue Agency (canada.ca). Not tax advice.