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Parent is a non resident for 2025. Left permanently in April 2025 & won't be coming back to Canada again. Only source of income from Canada is OAS/CPP/Bank Account Interest.
He will be getting OAS & CPP NR4 slips and 25% withholding tax on it. He doesn't want that 25% withholding tax back.
Savings bank account also he will be getting a NR4 slip instead of T5 slip. I think no Withholding tax is held on bank interest anymore.
So what is the point of a NR4 slip instead of T5? If both are going to be identical? Is it just a formality?
3. No other income or assets besides the above 3 (OAS/CPP/Bank Interest).
No house, no RRSP, no TFSA, no rental income, no stocks, no Capital Gains, no business income, nothing.
4. They are filing an Income tax return in their foreign country which has a tax treaty with Canada. And showing the OAS, CPP and Bank interest as income in that country.
5. So do they have to file an Income Tax Return next year in 2026 in Canada? For the 2025 tax year? They don't want the 25% OAS & CPP withholding tax back.
6. They left permanently in April, 2025 and won't be coming back to Canada again. So what happens for the part year - 3 months - Jan, Feb & March - when they were resident of Canada?
7. Do they get NR4 slips for OAS/CPP/Bank interest for only 9 months (April to December) when they were NR , and T4A/T5 slips for 3 months (Jan - March) when they were Resident? Or will it be only NR4 slips for the entire year.
As far as possible they don't want to file any return next year if they don't want to and complete their final tax obligations to Canada once and for all. Thanks for any feedback.
Hi Janis,
Thanks for your detailed question — you’ve raised all the right points. Here’s how it works:
1. Do they need to file a Canadian tax return for 2025?
Likely yes — but only for the resident period (Jan–Mar 2025).
Because your parent was a Canadian resident from January to March 2025, they must file a final Canadian tax return as a resident reporting worldwide income earned during that resident period.
After they depart (April onward), OAS/CPP/interest will be treated as non-resident income with withholding tax, which generally does not require filing a return.
2. OAS/CPP withholding tax (25%)
Non-residents pay 25% Part XIII tax on OAS & CPP (unless reduced by treaty).
If your parent does not want a refund, they do not file a non-resident return for this income.
3. Bank interest – why NR4 instead of T5?
Correct — non-resident bank interest is exempt from withholding tax under Canadian rules.
It still appears on an NR4 slip because:
- It documents the amount paid to a non-resident,
- It allows CRA to match income reported by Canadian financial institutions,
- It replaces the T5 once a person becomes a non-resident.
So yes — it’s mostly an administrative/formality difference, not a tax difference.
4. Will they receive both NR4 and T5/T4A slips?
This depends on how quickly Service Canada and the bank update residency status, but normally:
- Jan–Mar 2025 (resident period):
- T4A(OAS) and T4A(P) for CPP
- T5 for bank interest
- Apr–Dec 2025 (non-resident period):
- NR4 for OAS, CPP, and bank interest
If the institution updates residency retroactively, they may issue NR4s for the entire year — this is also acceptable.
5. Final tax obligations
To “close out” Canadian tax obligations:
- File a final resident T1 return for 2025 covering Jan–Mar.
- Report any worldwide income earned during those 3 months.
- After April 2025, income is fully subject to non-resident withholding and no further filing is required, as long as the withholding tax is correct.
Summary
- Resident Jan–Mar → file final return.
- Non-resident Apr–Dec → NR4 slips apply, no filing needed if refund not requested.
- Bank interest → exempt, NR4 issued for reporting only.
- After the 2025 filing, no further Canadian returns are required.
Hope this helps clarify everything! Let me know if you'd like to dive deeper into any part of this.