A T4A is created to report income for the year that it is received. T4As are mailed out in February of each year to members who received an allocation refund of $100 or more in February of the preceding year.
Red River Co-op is required by CRA (Canada Revenue Agency) to report all member allocations in excess of $100 and to withhold 15% of the amount earned over $100 and remit it to CRA on your behalf as a pre-payment of income tax. The allocation is reported in Box 30 of the T4A and the income tax withheld is reported in Box 22 of the T4A. The allocations are not necessarily taxable, see below for further clarifications.
Box 22, Income Tax Deducted:
The tax withheld and remitted to CRA is a direct benefit to all members and can be used as a prepayment of tax. Include the amount shown in Box 22 as part of “total tax deducted per information slips” on your income tax form.
Box 30, Allocation:
Consumer Goods (Personal Use):
If your purchases from Red River Co-op were for personal use only (consumer goods), the allocation is not taxable. You receive the benefit of the tax withheld but do not include the patronage allocation (Box 30) as part of your income.
Suggestion: Write “Consumer goods only” on the copy you are enclosing with your income tax return to avoid any confusion with the Canada Revenue Agency. If you are filing electronically, enter the non-taxable portion in the non-taxable box.
If you are claiming some or all of your purchases from Red River Co-op as expenses against income, then you must include the applicable portion of the allocation on your income tax form as taxable income. You receive the benefit of the tax withheld (Box 22 of the T4A).
If you are filing your income tax return manually ensure you label the T4A slip indicating the portion that relates to business/farm use and personal use. If you are filing electronically, enter the non-taxable portion in the non-taxable box, and the remainder in the taxable box when entering the T4A slip information into any personal income tax preparation software program.