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NR4 – Non-Resident Income 

Learn how the NR4 reports Canadian income for non-residents and how Optimize uses it in your tax and financial planning

If you live outside Canada but receive Canadian income like dividends, pensions, or rent, you’ve likely received an NR4 slip. This form often raises key questions: Am I being taxed twice? Do I need to file a Canadian return? How does this affect my financial strategy?

The NR4 is more than a tax slip. It reports income earned as a non-resident and taxes withheld at source. At Optimize, we use it to help integrate cross-border income into your tax and financial planning. Whether managing international investments or working with a local advisor, the NR4 is an important part of your overall plan.

The NR4: Income Reporting for Non-Residents

The NR4, officially known as the Statement of Amounts Paid or Credited to Non-Residents of Canada, is issued by Canadian payers such as financial institutions, trusts, or pension administrators to non-residents who have received certain types of Canadian-source income. The NR4 reports:

  • Type of income, such as interest, dividends, rental income, royalties, annuities, or pension payments.

  • Gross income received, meaning the full amount paid before taxes.

  • Non-resident tax withheld, which refers to taxes deducted at source, typically 15 to 25 percent depending on applicable tax treaties.

You will receive a separate NR4 for each payer or financial institution that issued income during the year. This information is also sent to the Canada Revenue Agency (CRA), ensuring that your Canadian-source income is reported even if you are not filing a Canadian tax return.

Why the NR4 Matters in Your Financial Plan

As a non-resident, understanding the NR4 is essential for managing tax obligations, planning income distributions, and avoiding unnecessary penalties or confusion.

This matters when you are deciding whether to:

  • File an elective Canadian tax return to potentially recover some of the withheld tax.

  • Optimize your investment mix in Canada to reduce withholding taxes.

  • Align Canadian income with your home country’s tax reporting and filing.

  • Consider the role of tax treaties between Canada and your country of residence.

Learn how to read a NR4 form to better understand the details and terminology used throughout your return.

For example, if you are receiving pension income from a Canadian plan and reside in a country with a favourable tax treaty, the default withholding rate may be higher than what is actually required. Filing a Canadian return under section 217 or 216 may allow you to recover some of that tax and improve your net income. Even if you are not required to file a return in Canada, your NR4 can still impact your global tax planning. Many countries require you to report worldwide income, and the NR4 is a key document for disclosing that income correctly.

Tip: Keep copies of your NR4 slips with your international tax records. They help establish the source of funds, tax withheld, and treaty eligibility, all of which are critical during tax audits or residency evaluations.

Learn how to read a NR4

Understanding your NR4 isn’t just about checking what you earned. It’s about knowing how Canadian income earned while living abroad is taxed, how much was withheld, and how it fits into your wider financial and tax strategy. If you're a non-resident of Canada receiving Canadian-source income — such as interest, dividends, pensions, or trust distributions the NR4 shows how much you earned and how much Canadian tax was withheld.

At Optimize, we help Canadians living abroad or with cross-border ties plan around non-resident income with confidence. This article breaks down the NR4 into clear sections and commonly used boxes so you can report it properly and plan smarter.

Identification and Basic Information

This section identifies you as a non-resident and shows who paid the income and how it was taxed.

Recipient’s name and address
Confirms your identity and tax residency status outside of Canada.

Payer’s name and address
The financial institution, trust, pension plan, or Canadian company that paid you.

Tax year
The calendar year in which you received the income reported on the slip.

Recipient’s country code
The CRA code for your country of residence. This is important for determining your tax treaty rate.

Recipient code
Confirms your non-resident status for tax purposes — required for correct tax treatment.

Income and Tax Withheld

This section shows the gross income paid and the tax withheld under Canadian non-resident withholding rules.

  • Box 16 – Income code
    Indicates the type of income received. For example, Code 61 is interest, Code 63 is dividends, Code 46 is pensions, and Code 35 is trust income.

  • Box 17 – Gross income
    The total Canadian-source income paid to you before withholding tax. This is not net of fees or tax.

  • Box 18 – Non-resident tax withheld
    The amount of Canadian tax withheld and remitted to CRA. Usually 25 percent unless reduced by a tax treaty.

Important: The NR4 reports income that may already have been taxed at source. If your country has a tax treaty with Canada, you may be eligible to claim a lower withholding rate or tax credit when filing in your country of residence.

Currency and Reporting Notes

Some NR4s may report income in foreign currency or include other administrative information.

  • Box 27 – Currency of the amounts reported
    Tells you whether income and tax are reported in Canadian dollars or another currency.

Tip: Keep your NR4 slips if you plan to claim a foreign tax credit in your home country. This form is often required by local tax authorities to verify Canadian withholding tax.