S217 return with Canadian source income

Tax Topics
1

Once we use S217 election, is it mandatory to report Canadian source employment, self-employment income and c.g on sale of TCP on one S217 return in addition to S217 qualifying income types?

2

Only income to be reported on a S217 return is S217 type income.

3

I’m confused. Why does the guide say that we should report other types of income on S217?

Report your income

Report the following income on your return:

  • All eligible section 217 income paid or credited to you

  • Canadian-source employment and business income

  • Net Canadian partnership income if you are a limited or non-active partner

  • Any taxable capital gains from disposing of taxable Canadian property

4

Section 217 applies to specific Canadian-source payments eligible for Part XIII withholding tax - which are source payments that entail a 25% withholding tax given the country of residence for the non-resident is a non-treaty country with Canada.

Self-employment income is not attributable to Part XIII, and TCP is taxed under Part I.

If you’re making an election pursuant to Section 217(2)(b), then most likely you’re receiving an annuity, dividends inside registered accounts, or pension income .. as an example.

5

Thank you!

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