T5 Slips for Dividends: What Owner-Managers File by March 1, 2027

Reviewed by Bader A. Chowdry, CPA, CA, LPA on November 6, 2026

If your Ontario corporation paid you, your spouse or a holding company a taxable dividend in 2026, T5 slips for dividends are due to the CRA and to each recipient by the last day of February 2027, which rolls to Monday, March 1, 2027. For a Mississauga owner-manager, the slip is the easy part. The decisions that the slip records, the dividend type and its designation, are made when the dividend is declared and paid, and most of them are made before December 31.

This guide covers who needs a slip, which boxes apply, the penalties the CRA publishes, and the year-end steps that keep the slip from becoming a problem in March.

Who has to issue a T5 slip for a dividend?

A corporation that pays a dividend to a resident of Canada has to report it. Section 201(1)(a) of the Income Tax Regulations, which is in force, requires every person who pays a dividend, or an amount the Act deems to be a dividend, to a Canadian resident to make an information return in prescribed form. For dividends, that return is the T5 slip plus the T5 Summary.

The CRA’s page on when a T5 slip is required lists two exceptions an owner-manager runs into most:

• No slip is needed for a recipient whose total for the year is less than $50.
• Capital dividends paid out of the capital dividend account (CDA) are not reported on a T5.

Everything else goes on the slip, including a dividend paid to a holding company. The recipient’s type changes which boxes you fill, not whether you file.

When are 2026 T5 slips due?

The CRA’s T5 due date page sets the deadline at the last day of February after the calendar year the return covers. When that day falls on a Saturday, Sunday or a public holiday the CRA recognizes, a return received or postmarked by the next business day is on time.

February 28, 2027 is a Sunday. So the 2026 T5 return is on time on Monday, March 1, 2027. The same last-day-of-February date governs the recipients’ copies: under the CRA’s distribution rules, each recipient must have their slip by then. Sending a slip by email needs the recipient’s written consent.

One exception matters at year-end. If the business or activity ends, the CRA expects the slips to go to recipients and to the CRA within 30 days after it ended, not at the end of February. A corporation being wound up after a sale of its business should plan for that.

For the full calendar of corporate dates around this one, see our year-end tax deadlines for Ontario business owners.

Which boxes apply: eligible or non-eligible?

The slip separates the two dividend types, and the CRA’s instructions for completing the T5 slip set out each box.

Non-eligible dividends: boxes 10, 11 and 12

Most dividends from a Canadian-controlled private corporation (CCPC) paid out of income that received the small business deduction are non-eligible. Box 10 is the actual amount paid. Box 11 is the taxable amount: box 10 plus a gross-up of 15% for dividends paid in 2019 or later. Box 12 is the federal dividend tax credit, 9.0301% of box 11.

Eligible dividends: boxes 24, 25 and 26

Box 24 is the actual eligible dividend. Box 25 adds a gross-up of 38%. Box 26 is the federal credit, 15.0198% of box 25. A dividend only belongs in these boxes if the corporation designated it as eligible, which is a legal step, not a bookkeeping label (next section).

Dividends paid to a corporation

When the recipient is a corporation, such as your holding company, the CRA instructs you to report the actual amount in box 10 or box 24 and to leave the taxable amount and credit boxes (11, 12, 25 and 26) blank. Gross-up and credit are personal tax mechanics; they do not apply to a corporate shareholder.

For an individual, the gross-up and the credit are the integration mechanism. As Ontario explains it, the dividend tax credits are meant to compensate the shareholder for the corporate income tax already paid on the earnings behind the dividend, so the same dollar is not taxed in full twice.

The individual shareholder then uses these boxes on the T1. In Ontario, the provincial credit is claimed on Form ON428. The Ontario dividend tax credit table shows 2.9863% on non-eligible dividends for 2020 to 2026, falling to 1.9863% for 2027 under Bill 97, which received Royal Assent as Chapter 2 of the Statutes of Ontario, 2026. Our article on the 2027 Ontario non-eligible dividend tax credit covers the December-versus-January timing question that change raises.

Designation happens when the dividend is paid, not in February

The Income Tax Act sets the timing. Under section 89(14), which is in force, a corporation designates all or part of a dividend as eligible by notifying each recipient in writing at the time it pays the dividend. The T5 slip prepared in February reports that designation; it does not create it.

That is why the paperwork at the payment date matters more than the slip. A board resolution that declares the dividend, plus a written notice to each shareholder that names the eligible portion, gives the slip something to report. Where no notice was given, the Act in section 89(14.1) lets the Minister accept a late designation if it is just and equitable, within three years after it was due. That is a discretionary relief, not a filing option to plan around.

Designating too much: the Part III.1 tax

A CCPC can designate eligible dividends only to the extent of its general rate income pool (GRIP) at the end of the taxation year, under the definition of “excessive eligible dividend designation” in section 89(1). An amount above that is an excessive designation.

Under section 185.1(1), which is in force, the corporation pays a tax of 20% of the excessive designation by its balance-due day. Section 185.1(2) lets the corporation elect, within 90 days after the notice of assessment for that tax, to treat the excess as a separate non-eligible dividend instead, and the election needs the concurrence of the shareholders who received it.

Because GRIP is measured at year-end, an eligible designation made in, say, June is tested against a pool that is not final until the T2 is prepared. That timing gap is where most designation problems start.

What an LPA adds to T5 season

Restating the CRA’s box instructions is not the hard part. The judgment sits in three places.

The decision rule. Before any dividend is designated eligible, compare the planned designation with an estimate of GRIP at the corporation’s year-end, and record the designation in writing to each shareholder on the payment date. If GRIP cannot be estimated with confidence, consider paying the dividend as non-eligible and leaving the eligible question for a later dividend once the pool is known.

The failure mode to look for. The common error is an eligible box filled in February because the corporation “has paid general-rate tax before”, with no written designation at the payment date and no GRIP check. The slip then reports a designation the Act does not recognize, or one the pool does not support. A second, quieter error is the gross-up boxes completed on a slip issued to a holding company, which the CRA’s instructions say to leave blank.

Paper or Internet. The CRA’s filing methods page requires Internet filing when a filer has more than 5 slips of a type for the calendar year; 1 to 5 slips may still go on paper. Under its penalties page, filing 6 to 50 slips of one type on paper when Internet filing is required carries a $125 penalty for that type. A family corporation with several shareholders, a spouse, adult children and a holdco can reach six recipients sooner than expected, especially if the same corporation also issues T4 slips for payroll, which count as a separate type. Salary runs through payroll with source deductions and remittances; a dividend carries neither and is reported on the T5 instead.

Illustrative example

This is an illustrative example with assumed figures, not a client case. An Ontario CCPC pays its owner, an individual resident in Canada, a non-eligible dividend of $40,000 in 2026, and pays a second shareholder an eligible dividend of $10,000 that it designated in writing on the payment date.

• Owner’s slip: box 10 is $40,000. The 15% gross-up is $6,000, so box 11 is $46,000. Box 12 is 9.0301% of $46,000, or $4,153.85.
• Second shareholder’s slip: box 24 is $10,000. The 38% gross-up is $3,800, so box 25 is $13,800. Box 26 is 15.0198% of $13,800, or $2,072.73.

Now assume the corporation’s GRIP at year-end supports only $4,000 of eligible designation. The excess of $6,000 is an excessive eligible dividend designation, and the Part III.1 tax at 20% is $1,200 unless the corporation makes the section 185.1(2) election within the 90-day window. The slip for the second shareholder would also need to be amended to match whatever is finally reported.

Penalties the CRA publishes for T5 returns

The CRA’s penalties page lists the amounts that apply to the T5 information return:

• Late filing: a minimum of $100 and a maximum of $7,500.
• Paper filing when Internet filing is required: $125 for 6 to 50 slips of a type, rising with the number of slips.
• Not making a reasonable effort to get a recipient’s social insurance number (SIN): $100 for each failure. If a recipient will not provide a SIN, the CRA expects the return filed by the due date without it, with a record of the request.

The CRA issues a notice of assessment for a T5 return only when it applies a penalty. Interest on unpaid penalties runs at the CRA’s prescribed rate. Relief from penalties and interest is available only under the taxpayer relief provisions, at the CRA’s discretion.

A year-end checklist before December 31

Most T5 problems are decided in the last weeks of the year. A short checklist for an owner-manager corporation:

1. List every dividend declared and paid in 2026, by date, recipient and type.
2. Confirm each has a board resolution and, for an eligible dividend, the written notice the Act requires at the payment date.
3. Estimate GRIP at the corporation’s year-end before any December eligible dividend is paid.
4. Collect each recipient’s SIN or business number now, and keep a dated record of any request.
5. Count recipients by slip type to see whether Internet filing is mandatory, and get written consent from anyone who wants the slip by email.
6. Separate any capital dividend paid out of the CDA, which does not go on a T5.

The question of whether to pay salary, a dividend or a mix for 2026 comes first; our guide to salary vs dividend at 2026 year-end covers the RRSP room and credit side of that decision.