T1204 vs T4A: federal payers report contracts over $500 by March 31

Who issues a T1204, and who gets one?

A T1204 reports the total contract payments a federal department, agency or Crown corporation made in a calendar year for services, including payments for products, expenses or reimbursements tied to those contracts canada.ca. The federal payer issues one when it paid a contractor resident in Canada for services performed inside or outside Canada, and the year's total to that contractor was more than $500, not counting GST/HST.

The recipient can be a sole proprietor, a corporation or a partnership: box 23 carries code 1, 3 or 4 canada.ca. Payments by cheque, cash, barter or offset against an amount owing all count, in the year they were paid.

Those exclusions come from the CRA's slip instructions canada.ca. The payer files a separate set of slips for each payroll account the payments came from, and the T1204 Summary totals must agree with the slips for that account canada.ca.

How does the T1204 differ from the T4A and the T5018?

All three report payments for services, and all three start at more than $500 a year. The differences sit in who files, the sales tax treatment, the period and the deadline canada.ca.

The copy rule surprises people. The CRA lists T1204 and T5018 slips together and says you aren't required to distribute them, while T4 and T4A slips carry a distribution deadline canada.ca. The penalty row comes from the CRA's filing calendar, which keeps the reduced policy for NR4, T4, T4A, T4E, T5 and T5018 only canada.ca. The construction side is on the T5018 deadline page, and box 048 on the T4A box 048 page.

What does each box on the T1204 hold?

The slip is short. These are the boxes the CRA describes for 2026 slips and the matching electronic filing fields canada.ca.

Two details matter when you read a client's slip. Box 84 holds the whole mixed payment, goods included, so it isn't a service income figure. And both boxes include reimbursements canada.ca, so travel your client billed at cost sits in the total. Match it to the expense side of the file before you treat a gap as missing income.

Why box 82 rarely matches the T2125: a worked example

The slip is built on cash paid in the calendar year, before sales tax. The T2125 is built on accrual income: all self employment income other than farming, fishing and commission income must use the accrual method, and sole proprietors generally use a December 31 year end canada.ca. Amount 3A on the T2125 is gross fees including GST/HST collected or collectible, and the tax comes back out at 3B before line 8000 canada.ca.

Take an Ontario IT consultant, a sole proprietor registered for HST, who works for one federal department in 2026. Fees billed for 2026 work: $40,000 plus $5,200 HST. The department pays $36,000 of that in 2026, and the December invoice of $4,000 is paid in January 2027. In February 2026 it also paid a $1,500 invoice for November 2025 work, which your client already reported for 2025.

Keep a note of the $1,500 difference. T4002 tells T4A recipients not to report an amount a second time when a slip includes income already reported in a prior year, and to write a letter showing the amount and the year it was reported, kept on file if you EFILE canada.ca. T4002 doesn't mention the T1204, but the same letter answers a CRA matching query. More on the form itself is on the T2125 page.

A corporate contractor follows the same logic on its T2. Under ITA paragraph 12(1)(b), an amount receivable for services rendered in the year is income for that year even if it's due later, and it's deemed receivable on the day the account is rendered, or would have been without undue delay laws-lois.justice.gc.ca. So the slip year and the corporation's fiscal year will often differ.

When must the federal payer file, and what does late filing cost?

The T1204 return is due March 31 after the calendar year it covers, so 2026 payments are due March 31, 2027, a Wednesday. If the date lands on a weekend or a public holiday the CRA recognizes, a return received or postmarked by the next business day is on time canada.ca. The CRA lists the T1204 as a return that must be filed electronically, with no small filer exception like the 5 slip rule for the T4A and T5018 canada.ca.

The T1204 is a prescribed return under Income Tax Regulations subsection 205(3) for the late filing penalty in ITA subsection 162(7.01) laws-lois.justice.gc.ca. Since it gets no reduced policy, the legislated rates apply: the greater of $100 and a daily amount for up to 100 days laws-lois.justice.gc.ca.

Example: a Crown corporation files 30 T1204 slips 20 days late. 20 days at $10 is $200, which beats the $100 minimum, so the penalty is $200. A payer with 3 slips filed 5 days late owes $100, because 5 days at $10 is only $50.