By OptiVal Editorial Desk
Two owners run a growing business together, skip incorporation, and assume their personal returns cover everything. Then a lender, a new corporate partner, or a Canada Revenue Agency (CRA) letter raises a form they have never heard of: the T5013 in Canada, the partnership information return. A partnership does not pay tax itself, but larger and more complex partnerships still have to file, and many learn that only after the deadline.
What a T5013 in Canada actually is
A partnership is not taxed as a separate person the way a corporation is. Income and losses flow out to the partners, who report their share on a T1, a T2, or a T3 return. The partnership files no income tax return and pays no tax at its own level.
The T5013 return is the CRA’s window into that flow. It reports the partnership’s income, expenses and other amounts for a fiscal period, and how each amount was allocated to each partner. Each partner gets a T5013 slip, Statement of Partnership Income, showing their share, and those slips travel with a T5013 Summary. If the partnership numbers and the partners’ returns do not line up, the CRA can see the gap. The full rules sit on the CRA page for filing a T5013 partnership information return.
The return is a package, not a single form. It includes the T5013 FIN, Partnership Financial Return, plus Schedule 1 for net income, Schedule 50 for partner ownership and account activity, and the financial statement schedules 100, 125 and, where it applies, 140 and 141. Slips and summary alone leave it incomplete.
Who has to file a T5013 in Canada
On paper, the regulations require every partnership carrying on business in Canada, every Canadian partnership, and every specified investment flow-through (SIFT) partnership to file. CRA administrative policy then excuses smaller, simpler partnerships. Under that policy, a partnership must file if either size test is met at period end:
- The combined absolute value of revenues and expenses is more than $2 million. Absolute value means you add the two totals as positive numbers. You do not net expenses against revenue the way you would to get profit.
- The partnership has more than $5 million in assets. Use the cost of all assets worldwide, tangible and intangible, before depreciation, not the depreciated book value.
The CRA’s own example shows how easily the first test is tripped. Revenue of $1,500,000, cost of goods sold of $850,000 and other expenses of $400,000 give net income of only $250,000, but expenses total $1,250,000, so revenues plus expenses come to $2,750,000. That partnership must file, even though its assets, at $2 million before depreciation, sit well under the asset test.
The structure traps that force a filing at any size
Size is only half the story. A partnership of any size must file if, at any time during the fiscal period, one of these applied:
- It is a tiered partnership, meaning another partnership is a partner in it, or it is itself a partner in another partnership.
- It has a corporation or a trust as a partner.
- It invested in flow-through shares of a principal business corporation that incurred Canadian resource expenses and renounced those expenses to the partnership.
- The Minister of National Revenue asks for a return in writing.
The second point surprises people most. Two individuals who bring a holding company in as a third partner, perhaps for a property purchase or a financing, have changed their filing duty even if revenue is small. Nominees and agents who hold an interest for someone else have their own duty too: a separate summary and slips for each such partnership.
To file, the partnership needs a business number with an RZ programme account: the nine digit business number, the letters RZ, and a four digit reference number. Sort that out before year end, not in the filing week.
Deadlines for a T5013 in Canada depend on the partners
There is no single T5013 deadline. The due date turns on who the partners were throughout the fiscal period, including the end members of a tiered partnership:
- All partners are individuals: March 31 after the calendar year in which the fiscal period ended. For this rule the CRA treats a trust as an individual.
- All partners are corporations: five months after the end of the fiscal period. A March 31 period end means August 31, and a June 30 period end means November 30.
- Every other mix: the earlier of March 31 after that calendar year and the day five months after the period ends.
Partners must also receive their slips no later than the filing due date. If the partnership ends its operations, file outstanding returns by the earlier of 90 days after it ended all business and the normal due date. A due date falling on a weekend or a CRA recognised holiday moves to the next business day.
File electronically if you have more than five T5013 slips for a calendar year. Filing on paper above that line draws its own penalty, and extra slips filed after the due date can draw a late filing penalty as well.
What late or missing filing costs
A late T5013 return, or any late part of it, draws a penalty of $25 per day, with a minimum of $100 and a maximum of $2,500, for each failure. Handing slips to partners late counts as a failure too, and each partner can be liable as well as the partnership itself. Special penalties apply where Schedule 52, for renounced resource expenses, is filed late, running from $100 up to $30,000, so flow-through partnerships need particular care.
The quieter cost is time. The CRA can determine the partnership’s income or loss within three years after the later of the filing deadline and the day the return is actually filed. A return filed years late keeps that window open years longer, and every partner’s return sits inside it. Filing on time with estimates, then amending, is the CRA’s own suggested approach for tiered partnerships waiting on slips from below.
Bookkeeping that makes the T5013 routine
Clean filers keep three habits all year. They track each partner’s capital account monthly, so Schedule 50 is a report and not a reconstruction. They keep the agreement’s allocation percentages beside the bookkeeping, and they flag structure changes, a new corporate partner, a tiered investment, a nominee holding, the moment they happen, because those changes can create a filing duty in a small year. It is the same discipline behind clean sole proprietor reporting in our T2125 guide for unincorporated businesses, just shared between partners.
If you are not sure whether your partnership crossed a test this year, check before March, not after. OptiVal helps unincorporated and incorporated owners with bookkeeping from $199 per month, T2 preparation from $449, and cleanup work at $45 per hour, all CAD, HST extra. Led by qualified professionals with more than 75 years of combined experience, PwC-trained, our team has worked at world-leading multinationals in CFO-level positions. See our services and pricing, then book a free consultation and we will work through your partnership’s filing position with you.
