T5018 (Construction Contract Payments)

Le T5018, ou État des paiements contractuels, est un formulaire d'impôt de l'ARC (l'Agence du revenu du Canada). Une entreprise dont l'activité principale est la construction y déclare les paiements de 500 $ ou plus faits à ses sous-traitants, les autres entreprises engagées en renfort. Ce formulaire aide l'ARC à combattre le travail au noir.

Brief

Reports payments made to subcontractors (companies hired to provide additional support) in construction
Reporting threshold: €500 and over per subcontractor (including VAT)
You can choose: by calendar year (January 1st to December 31st) or by financial year (the company's accounting year)
To be submitted to the CRA within six months of the end of the chosen period

Why does this matter?

If construction is your primary business, the T5018 form is mandatory: the IRS charges a penalty for each late or missed form. Consider a general contractor who subcontracts plumbing and electrical work to two subcontractors: they must declare their payments. The reverse is also true: if you are the subcontractor, your client (the one who awarded you the contract) reports your amounts to the IRS, so your own declared income must match, otherwise you risk a tax audit. The best approach: from the very first contract, keep a clean list of your subcontractors with their business numbers, and have your accountant prepare the forms. Bankeo will connect you with a verified accountant or CPA who is familiar with the construction industry, free of charge, and we'll continue to support you afterward.

Frequently asked questions

What exactly is a T5018?

This is the form a construction company uses to report to the IRS how much it paid its subcontractors during the year. Think of it as a statement that tracks money in the industry: it allows the IRS to verify that each subcontractor is properly reporting the amounts received, thus helping to curb undeclared work.

Who is required to produce them and which payments must be declared?

Any business whose primary activity is construction and that pays subcontractors for construction work, whether you are a general contractor with a company or a self-employed worker, is eligible. Payments of $500 or more per subcontractor, including taxes, are reported. Purchases of materials alone do not count; a combined payment for materials and labor does. Collect the business number of each subcontractor at the start of the contract.

I received a T5018 as a subcontractor, what difference does that make?

The IRS keeps a copy of every tax return issued in your name and compares these amounts to your reported income. Any discrepancy raises red flags and can lead to an audit. For clean books and consistent tax returns, Bankeo will introduce you to a verified accountant or CPA who understands construction, free of charge, and we'll continue to support you afterward.