Electing under Section 217 of the Income Tax Act

T4145(E) Rev. 23

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Find out if this guide is for you

This guide is for you if both of the following apply:

• You were a non-resident of Canada in 2023
• You received any of the Canadian-source income listed under Eligible section 217 income

This guide explains what a section 217 election is and how to decide if it is beneficial for you. It also explains how to complete a 2023 section 217 return.

Table of contents

• Electing under section 217 of the Income Tax Act
  • What is a section 217 election?
  • Eligible section 217 income
  • Why elect under section 217?
    • If the election is beneficial
    • If the election is not beneficial
  • Reducing tax withheld (Form NR5)
• Before you file
  • Find out if you need to file a section 217 return
  • Section 217 return due date
• Completing your section 217 return
  • Identification and other information 
  • Income
    • Complete Schedule C, Electing under Section 217 of the Income Tax Act
  • Deductions
  • Calculating your federal tax
    • Complete Schedule A, Statement of World Income
    • Complete Step 5 of your section 217 return
  • Federal non-refundable tax credits
    • Complete Schedule B, Allowable Amount of Federal Non-Refundable Tax Credits
  • Section 217 tax adjustment
  • Tax payable
  • Part-year residents electing under section 217
  • Refund or balance owing
• For more information
  • If you need help
  • Due dates
  • Forms and publications
  • Electronic mailing lists
  • Tax Information Phone Service (TIPS)
  • Teletypewriter (TTY) users
  • CRA service feedback program
    • Service complaints
    • Reprisal complaints
• Contact the CRA

Electing under section 217 of the Income Tax Act

What is a section 217 election?

If you are a non-resident of Canada, Canadian payers must withhold non-resident tax on certain types of Canadian-source income that they pay or credit to you. The tax withheld is usually your final tax obligation to Canada on this income. You do not have to file a Canadian Income Tax and Benefit Return to report it; however, you can choose to file a Canadian return to report certain types of Canadian-source income by “electing under section 217 of the Income Tax Act.” By making a section 217 election, you may pay tax on this income using a different method and may receive a refund of all or part of the non-resident tax withheld.

If you emigrated from Canada in 2023, the section 217 election applies to Canadian-source income that is received after leaving Canada.

If you immigrated to Canada in 2023, contact the CRA for any special section 217 rules that may apply to you.

Eligible section 217 income

The section 217 election applies to the following types of Canadian-source income:

• old age security (OAS) pension

• Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) benefits
• most superannuation and pension benefits
• most registered retirement savings plan (RRSP) income
• most pooled registered pension plan (PRPP) income
• most registered retirement income fund (RRIF) income
• death benefits
• employment insurance (EI) benefits
• certain retiring allowances
• registered supplementary unemployment benefit plan income
• most deferred profit-sharing plan (DPSP) income
• amounts received from a retirement compensation arrangement (RCA) or the purchase price of an interest in an RCA
• prescribed benefits under a government assistance program
• Auto Pact benefits

Do not include the following amounts when calculating your eligible section 217 income:

• any supplement received under the Old Age Security Act
• an amount transferred to acquire an annuity contract, registered pension plan, RRSP, PRPP or RRIF following an authorization from the CRA
• an amount exempt under the Income War Tax Act
• any amount that can reasonably be considered to be attributable to services rendered while you were not resident in Canada and while you were not employed, or were only occasionally employed, in Canada 

Why elect under section 217?

You will benefit from electing to file a return under section 217 if the total tax payable on line 43500 of your return is less than the tax you would otherwise pay if you did not make this election.

When processing your return, the CRA will only take your election under section 217 into account if it is beneficial.

To determine the tax you would otherwise pay if you did not make a section 217 election, add the following amounts:

• the non-resident tax required to be withheld from line 44300 of Schedule C, Electing under Section 217 of the Income Tax Act (included in the Income Tax Package for Non-Residents and Deemed Residents of Canada)
• the tax payable on any of the following amounts, if applicable:
  • Canadian-source employment and business income
  • net Canadian partnership income if you are a limited or non-active partner
  • taxable capital gains from disposing of taxable Canadian property that you need to include on your 2023 return

To calculate the total tax payable on your section 217 return, see Completing your section 217 return.

If the election is beneficial

If you file your section 217 return on time, the CRA will refund any tax withheld that is more than the amount you owe.

If the payer withheld less than the required amount of non-resident tax on your eligible section 217 income, you may have a balance owing, even if the election is beneficial.

Make sure you include on line 43700 of your return the non-resident tax withheld on your eligible section 217 income from your information slips.

If the election is not beneficial

If the payer withheld more than the required amount of non-resident tax on your eligible section 217 income, you can ask for a refund of the difference by completing Form NR7-R, Application for Refund of Part XIII Tax Withheld.

If the payer withheld less than the required amount of non-resident tax because the CRA approved your Form NR5 (or for any other reason), you have to pay the difference between the required amount of non-resident tax and the amount withheld.

Reducing tax withheld (Form NR5)

If you want to make a section 217 election on eligible income that you have not yet received, you can apply for a reduction to the non-resident tax the payer would otherwise need to withhold. To do this, complete Form NR5, Application by a Non-Resident of Canada for a Reduction in the Amount of Non-Resident Tax Required to be Withheld, and send it to the CRA for approval on or before October 1 or before the first payment is due. If the CRA approves your application, you must file a section 217 return for each year in the approval period.

The CRA will use your completed Form NR5 to determine if a section 217 election will benefit you.

If the election is beneficial for you, the CRA will authorize your Canadian payer(s) to reduce the amount of non-resident tax withheld from your benefits during the approval period.

Before you file

Find out if you need to file a section 217 return

You must file a section 217 return for each year of the period covered by the approved Form NR5, Application by a Non-Resident of Canada for a Reduction in the Amount of Non-Resident Tax Required to be Withheld. However, even if you did not send a Form NR5 to the CRA for the year or the CRA did not approve it, you may still choose to file a section 217 return to apply for a refund of all or part of the non-resident tax withheld on your eligible section 217 income.

The Income Tax Package for Non-Residents and Deemed Residents of Canada includes the return, schedules, and information you need to complete your section 217 return.

Section 217 return due date

Your 2023 section 217 return must be filed on or before June 30, 2024. However, if you have a balance owing for 2023, you need to pay it on or before April 30, 2024, to avoid interest charges.

When a due date falls on a Saturday, Sunday or public holiday recognized by the CRA, your return is considered on time if the CRA receives it or if it is postmarked on or before the next business day. For more information, see Due dates and payment dates.

If you file your 2023 return after June 30, 2024, the CRA cannot accept your section 217 election according to the Income Tax Act.

If you file late and the required amount of non-resident tax was withheld on your eligible section 217 income, the CRA will consider the amount withheld to be your final tax obligation to Canada on that income. However, if the payer withheld less than the required amount of tax, the CRA will send you a notice of assessment for the difference.

Completing your section 217 return

To complete your 2023 section 217 return, use the information in this section and the instructions in your Income Tax and Benefit Guide for Non-Residents and Deemed Residents of Canada.

Write "Section 217" at the top of page 1 of your return.

Identification and other information

Complete this section by following the instructions in your Income Tax and Benefit Guide for Non-Residents and Deemed Residents of Canada.

Income

Report the following income on your return:

• all eligible section 217 income paid or credited to you in 2023
• your 2023 Canadian-source employment and business income, net Canadian partnership income if you are a limited or non-active partner, and any taxable capital gains from disposing of taxable Canadian property

For more information about eligible section 217 income, see Eligible section 217 income, Schedule C, Electing under Section 217 of the Income Tax Act, and the Income Tax and Benefit Guide for Non-residents and Deemed Residents of Canada.

Complete Schedule C, Electing under Section 217 of the Income Tax Act

Complete Schedule C if you were a non-resident of Canada for the entire year and you are electing to file a return under section 217.

Complete Part 1 to report your eligible section 217 income and calculate the amount of non-resident tax you are required to pay on your eligible section 217 income.

The amount you calculate may be different from the non-resident tax withheld on this income. This may happen if the payer did not withhold the required amount of tax or if the CRA approved a reduction in the amount of tax to be withheld as a result of the Form NR5 you submitted.

Complete Part 2 to calculate your section 217 tax adjustment, if applicable. For more information, see Section 217 tax adjustment. 

Deductions

Claim only the deductions that apply to you as a non-resident electing under section 217. For more information, see the Income Tax and Benefit Guide for Non-Residents and Deemed Residents of Canada.

Calculating your federal tax

If you file a section 217 return, you must complete Schedule A, Statement of World Income, before you calculate your tax on your return.

Complete Schedule A, Statement of World Income

Report your world income on Schedule A. World income is income for the year from all sources inside and outside Canada.

Your income from Canadian sources is the total of your net income (line 23600 from your section 217 return), plus other types of Canadian-source income that are not included on this return, such as dividends, interest, rental income or worker’s compensation benefits.

Income from foreign sources (when the CRA mentions "foreign source" in this guide, it is referring to sources outside Canada) includes income from employment, self-employment, pension, investment, rental, capital gains, and any other foreign-source income that you would have included on your return if you had been a resident of Canada.

You report your foreign-source income on your Schedule A, but you may also use it on your return. For more information, see Complete Step 5 of your return.

Complete Step 5 of your section 217 return

To calculate your tax payable, which includes the surtax for non-residents and deemed residents of Canada, you need to complete the return and schedules included in the Income Tax Package for Non-Residents and Deemed Residents of Canada.

Enter whichever amount is more on line 70 of your return:

• the taxable income reported on line 26000 of your return
• your net world income after adjustments from line 16 of Schedule A

If you use the net world income after adjustments from line 16 of Schedule A to determine your federal tax, you need to calculate the section 217 tax adjustment amount using Part 2 of Schedule C. For more information, see Section 217 tax adjustment.

Federal non-refundable tax credits

These credits reduce your federal tax.

You can claim all of the federal non-refundable tax credits that apply to you on your return. However, under section 217 of the Income Tax Act, the amount of the credits you can use to reduce your tax may be limited.

After you complete Part B in Step 5 of your return, complete Part B of Schedule B to calculate the allowable amount of federal non-refundable tax credits.

Complete Schedule B, Allowable Amount of Federal Non-Refundable Tax Credits

The allowable amount of federal non-refundable tax credits you can claim depends on the portion of net world income (line 14 of Schedule A) that you included in net income (line 23600) on your section 217 return.

If you included 90% or more of your 2023 net world income in your net income, the allowable amount of federal non-refundable tax credits is the total from line 35000 of your return.

If you included less than 90% of your 2023 net world income in your net income, the allowable amount of federal non-refundable tax credits is whichever amount is less:

• 15% of the eligible section 217 income paid or credited to you in 2023
• the total federal non-refundable tax credits you would be eligible for if you were a resident of Canada for the full year (from line 35000 of your return) minus 15% of the total of the following amounts, if any:
  • Line 31220 – Volunteer firefighters' amount
  • Line 31240 – Search and rescue volunteers' amount
  • Line 31270 – Home buyers' amount
  • Line 31285 – Home accessibility expenses
  • Line 31300 – Adoption expenses
  • Line 31350 – Digital news subscription expenses
  • Line 31900 – Interest paid on your student loans

Section 217 tax adjustment

If the amount you enter on line 70 of your return is your net world income after adjustments (line 16 of Schedule A), you need to calculate the section 217 tax adjustment.

Your net world income after adjustments may include foreign-source income, which is not taxable in Canada, and Canadian-source income like interest, dividends or rental income, which is not included in the taxable income on your return. This adjustment reduces your federal tax by the portion of taxes that apply to this income

Tax payable

The amount on line 43500 of your return is your tax payable if you make the election under section 217.

Part-year residents electing under section 217

Special rules may apply if you are a part-year resident. For more information, go to Individuals – Leaving or entering Canada and non-residents.

You must report your world income for the part of the year that you were a resident of Canada and all section 217 income for the part of the year you were a non-resident. For more information about reporting world income, see the Income Tax and Benefit Guide for Non-Residents and Deemed Residents of Canada.

As a part-year resident electing under section 217, you are subject to provincial or territorial taxes instead of the surtax for non-residents and deemed residents of Canada.

Refund or balance owing

Line 46900 – Eligible educator school supply tax credit

If you included in your net income 90% or more of your 2023 net world income (line 14 of Schedule A) and you were an eligible educator, you can claim an amount for eligible supplies that you purchased in 2023. For more information, see line 46900 of the Income Tax and Benefit Guide for Non-Residents and Deemed Residents of Canada.

For more information

If you need help

If you need more information after reading this guide, go to Taxes or Contact the CRA. To find our address and telephone numbers, see Contact the CRA.

Due dates

When a due date falls on a Saturday, Sunday or public holiday recognized by the CRA, your return is considered on time if the CRA receives it or if it is postmarked on or before the next business day. For more information, see Due dates and payment dates.

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