Electing under section 217

This page provides information for individuals who are interested in choosing to elect under section 217 of the Income Tax Act.

What is electing under section 217?

If you are a non-resident of Canada, Canadian payers deduct non-resident tax from qualifying Canadian income paid or credited to you. If the correct amount of tax has been deducted, this non-resident tax is your final tax obligation to Canada on this income. As such, this income is not required to be reported on a Canadian income tax return.

However, you can choose to include all your qualifying Canadian income on a Canadian return and pay tax on this income using an alternative taxing method. If this is the case, you are then "electing under section 217 of the Income Tax Act" and may receive a refund of some or all of the non-resident tax withheld on this income.

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Qualifying Canadian income

You can elect to file a tax return under section 217 for the following types of Canadian income:

• Old Age Security pension (read note below);
• Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) benefits;
• most superannuation and pension benefits;
• most registered retirement savings plan (RRSP) payments;
• most registered retirement income fund (RRIF) payments;
• death benefits;
• Employment Insurance benefits;
• certain retiring allowances;
• registered supplementary unemployment benefit plan payments;
• most deferred profit-sharing plan payments;
• amounts received from a retirement compensation arrangement, or the purchase price of an interest in a retirement compensation arrangement;
• prescribed benefits under a government assistance program;
• Auto Pact benefits.

Note
Whether or not you choose to file a Section 217 return, if you receive Old Age Security pension during the tax year, you may have to file the Old Age Security Return of Income.

Is it beneficial to electing under section 217?

If you are thinking of electing under section 217, you should first determine if doing so will be to your benefit.

You will benefit from filing a return under section 217 if the total tax payable indicated at line 435 on your return is less than the total tax, including the non-resident tax, you would otherwise pay if you did not make this election. If the election is not beneficial we will not process it.

To determine the tax you would otherwise pay, and for more information on whether electing under section 217 is beneficial for you, see "Is a section 217 election beneficial?" in Pamphlet T4145, Electing under section 217 of the Income Tax Act.

Which tax package should you use?

To file a return under section 217, use the General Income Tax and Benefit Guide for Non-Residents and Deemed Residents of Canada.

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Filing due date

Generally, your section 217 tax return must be filed on or before June 30 of the year after the tax year.

If you send us your return after this date, according to the Income Tax Act, your section 217 election cannot be accepted. If this is your case and the required amount of non-resident tax was withheld on your eligible 217 income, we will consider the amount withheld to be the final tax obligation to Canada on that income. However, if the payer withheld less than the required amount of tax, we will send you an assessment for the difference.

If you have a balance of tax owing, you must pay the amount by April 30 of the year after the tax year.

Reducing the amount of tax withheld (Form NR5)

If you intend to make a section 217 election, you can apply for a reduction of the non-resident tax that the payer has to withhold on the qualifying Canadian income.

You can do this by sending, for approval, a completed Form NR5, Application for a Reduction in the Amount of Non-Resident Tax Required to be Withheld, to the International Tax Services Office on or before October 1, or before the first payment is due.

If your NR5 is approved:

• Generally, it will be valid for a period covering five tax years. For more information, see Form NR5 - 5-year Administrative Policy.
• We will advise the Canadian payer to reduce the rate of non-resident tax deducted from your qualifying income.
• You must file a section 217 return for each year of the approval period.
  

Forms and Publications

• Pamphlet T4145, Electing Under Section 217 of the Income Tax Act