Your T4A-RCA slip reports the amounts distributed to you from a retirement compensation arrangement (RCA) as a beneficiary of the RCA or if you sold an interest in it. The slip also shows the income tax that was deducted from the amounts distributed to you.
Note: If you’re a Québec resident, the amounts you received from an RCA are shown in box D-1 of your RL-1 slip.
What’s an RCA?
An 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 and distributes them to the employee, or another person, if the following occurs:
- The employee retires
- The employee faces loss of an office or employment or
- Any substantial change in the services the employee provides
An employer or former employer can also buy interest in an RCA such as a life insurance policy (including an annuity) to fund benefits for any of the situations listed above.
Deductible versus non-deductible contributions
Generally, your RCA contributions are deductible on your tax return if the custodian is a resident in Canada and if:
- You were required under the terms of your employment to make contributions and the total amount contributed in the year isn’t more than the total contributed in the year by your employer (or any other person) for you or
- The amount was contributed to a plan that was a registered pension plan but the plan's registration was revoked, and the amount was contributed under the terms of that plan
If your RCA contributions don’t meet the above conditions, your contributions were non-deductible. With non-deductible contributions, you might be eligible to claim a deduction in the year you receive an amount from your RCA.
For example, if you sold an interest in the RCA, the amount you receive will be shown in box 18 of your T4A-RCA slip. If you made non-deductible contributions to this RCA, you can deduct either A or B, whichever is less:
- A = the amount in box 18 or
- B = (C minus D)
Where:
C = the total price you paid while you were a resident of Canada for the interest in the RCA, the non-deductible contributions you made before the end of the year of in which you sold the interest, and amounts transferred from another RCA
D = the total amounts transferred to another RCA and amounts you already deducted for any amounts received for this RCA
Where do I claim this?
Follow these steps in H&R Block’s tax software to file your 2016 taxes:
- On the QUICK ENTRY tab, click the QUICK SLIP icon. You will find yourself here:
- Type T4A-RCA in the search field then click the highlighted selection or press Enter to continue.
- When you arrive at the page for your T4A-RCA, enter your information into the tax software.
