T4A-RCA: Statement of Distributions from a Retirement Compensation Agreement (RCA)

What’s in this article?

 

What is this?

A T4A-RCA slip reports the distributions of a retirement compensation arrangement (RCA) that you received as a beneficiary or if you sold an interest in an RCA, as well as any income tax deducted. If you are a Québec resident, the distributions you received from an RCA are shown in box D-1 of your RL-1 slip.

 

Canada Revenue Agency (CRA) says…

A retirement compensation arrangement (RCA) is a plan or an arrangement under which an employer, former employer, and in some cases an employee makes contributions to a person or partnership, referred to as a custodian.

The custodian holds the funds in trust with the intent of eventually distributing them to the employee, former employee or other beneficiary on, after, or in contemplation of:

  • an employee's retirement;
  • an employee's loss of an office or employment; or
  • any substantial change in the services the employee provides (for example, a senior corporate director who, after termination, is retained on a part time basis to teach a management course to new trainees may be considered to have substantially changed the services being provided for the purposes of the definition of an RCA).

An employer or former employer may acquire an interest in a life insurance policy (including an annuity) to fund benefits on, after, or in contemplation of any of the situations as listed above. In this case, we consider this interest to be the property of an RCA and the employer to be the custodian of the RCA.

The T4A-RCA slip consists of the following boxes:

Box Description

Box 12 – Refund of employer contributions

This is the amount that the RCA trust refunded to the employer.

Box 14 – Refund of employee contributions

This is the amount that the RCA trust refunded to you, including voluntary employee contributions made to the RCA.

Box 16 – Distributions

This is the amount that you received as benefits from the RCA trust.

Box 17 – Distributions eligible for pension income splitting

This is the amount included in Box 16 consisting of payments that:

  • Are in respect of a life annuity that is attributable to periods of employment for which benefits are also provided to the individual under a RPP, and
  • Provide benefits that supplement the benefits provided under a registered pension plan (other than an individual pension plan for the purposes of Part LXXXIII of the Regulations).

Box 18 – Selling price of an interest in the RCA

This is the amount which the employer paid you if they bought an interest in the RCA.

Box 20 – Other amounts

The amount in Box 20 is the difference between the consideration and fair market value (FMV) if the RCA trust:

  • Disposed of property for consideration less than the fair market value (FMV) of the property;
  • Acquired property for consideration greater than the FMV of the property;
  • Permitted the RCA trust's property to be used for consideration less than the FMV of such use.

Box 22 – Income tax deducted

This is the amount of income tax deducted from distributions paid to you or from the purchase price of an interest.

Box 24 – Social insurance number (SIN)

This is your social insurance number.

 

Am I eligible?

If you received distributions from an RCA, you will receive a T4A-RCA slip that shows the amounts paid to you and the income tax deducted. You must report your T4A-RCA slip amounts on your income tax return.

 

Where do I claim this?

Follow these steps in H&R Block’s tax software to file your 2015 taxes:

1. Click the PREPARE tab.
2. Click the YOUR YEAR IN REVIEW icon. You will find yourself here:


3. Select the checkbox I received retirement income or I was retired or over 65.
4. Scroll to the bottom of the page and click Continue.
5. Click the RETIREMENT INCOME icon. You will find yourself here:


6. Under the RETIREMENT section, select the checkbox labelled T4A-RCA: Statement of distributions from a retirement compensation arrangement (RCA)and click Continue.

When you arrive at the page for the T4A-RCA, enter your information in the software.

 

Where can I learn more?