News from the Canada Revenue Agency
Every tax season, community organizations partner with the Canada Revenue Agency (CRA) and Revenu Québec to offer free tax clinics. This is made possible through the Community Volunteer Income Tax Program (CVITP). In Quebec, this program is called the Income Tax Assistance – Volunteer Program.
Currently, community organizations that run tax clinics must cover the cost of these events. The CRA knows that these costs can be a challenge for participating organizations and that they may be a barrier for encouraging others to sign up.
To offer more support to community organizations and to encourage others to sign up, the CRA is piloting a new grant program for the upcoming tax season. The grant program will help organizations offset some of these costs and provide funding for returns filed so they can focus on what they do best – helping people in need.
The CRA will be investing more than 10 million over three years toward the new grant program. Organizations will be able to submit grant applications starting in May 2021.
You can find more information about the grant program, including eligibility criteria, at canada.ca/free-tax-clinics-grant.
If you’re interested in running a free tax clinic in 2021, visit Host a free tax clinic. With more organizations offering the service, more Canadians will have the support they need to get their taxes done cost- and stress-free, and receive their benefits and credits.
To receive updates on what is new at the Canada Revenue Agency (CRA), you can:
The Canada Revenue Agency (CRA) recognizes that businesses are being affected by the outbreak of the COVID-19 virus, and is committed to helping them better understand their tax obligations during this critical period. To do so, we are hosting a free webinar to help small and large employers alike understand, prepare, and file the required information summaries and slips for their tax year-end. This also includes information about filing requirements for businesses who claimed COVID-19 support in 2020.
This webinar will provide an overview of:
- remittances and year-end filing;
- who is subject to year-end filing;
- how to ensure proper year-end filing;
- how to report certain COVID-19 relief measures announced in 2020;
- year-end forms (T4, T4A, and others); and
- GST/HST and TD1 considerations.
Register for the webinar
You should register for this webinar if you are:
- a business with remunerated employees; and/or
- a business using the services of non-employee worker or contractor
- a business looking for additional direction on filing in light of new measures announced in 2020 as a result of Covid-19.
This webinar is on Wednesday, January 27, 2020, at the following times:
Need more information?
The CRA has a number of resources available to help employers with their tax year-end obligations. For more information, including filing and payment deadlines, visit canada.ca/taxes.
For more information on how COVID-19 relief measures affect employers, please visit the CRA and COVID-19: Information for employers web page on canada.ca.
To receive updates on what is new at the Canada Revenue Agency (CRA), you can:
This year has been filled with unprecedented challenges due to the COVID-19 pandemic. Many Canadians unexpectedly had to work from home which resulted in millions of Canadians setting up their work space in their kitchens, bedrooms and living rooms.
In response, the Honourable Diane Lebouthillier, Minister of National Revenue, provided today additional details on how the Canada Revenue Agency (CRA) has made the home office expenses deduction available to more Canadians, and simplified the way employees can claim these expenses on their personal income tax return for the 2020 tax year. Employees with larger claims for home office expenses can still choose to use the existing detailed method to calculate their home office expenses deduction.
Employees who worked from home more than 50% of the time over a period of a least four consecutive weeks in 2020 due to COVID-19 will now be eligible to claim the home office expenses deduction for 2020. The use of a shorter qualifying period will ensure that more employees can claim the deduction than would otherwise have been possible under longstanding practice.
A new temporary flat rate method will allow eligible employees to claim a deduction of $2 for each day they worked at home in that period, plus any other days they worked from home in 2020 due to COVID-19 up to a maximum of $400. Under this new method, employees will not have to get Form T2200 or Form T2200S completed and signed by their employer.
To simplify the process for employees choosing the detailed method, the CRA launched today simplified forms (Form T2200S and Form T777S) and a calculator designed specifically to assist with the calculation of eligible home office expenses.
For more information on working from home expenses go to Canada.ca/cra-home-workspace-expenses.
- Home office expenses can be claimed as a deduction on an employee’s personal income tax return. Deductions reduce the amount of income they pay tax on.
- For those using the detailed method to calculate their home office expenses, the CRA has expanded the list of eligible expenses that can be claimed to include home internet access fees. A comprehensive list of all eligible expenses is available online.
- According to Statistics Canada, “Working from home continues to be an important adaptation to COVID-19 health risks, with 2.4 million Canadians who do not normally work from home doing so in October.
- The CRA engaged many stakeholders in the fall of 2020 about the simplified Form T2200 and work-space-in-the-home expenses prior to introducing these temporary measures. For more information, go to the Backgrounder – Consultation on the simplification of Form T2200.
- The new temporary flat rate method to calculate the deduction for home office expenses was announced on November 30th in the Fall Economic Statement.
- Backgrounder – Simplifying the process for claiming a deduction for home office expenses
- Backgrounder – Employer-provided Benefits and Allowances: CRA and COVID-19
- Backgrounder – Consultation on the simplification of Form T2200
- Home office expenses for employees
- Frequently asked questions – Home office expenses for employees
- Form T2200S Declaration of Conditions of Employment for Working at Home During COVID-19
- Form T777S - Statement of Employment Expenses for Working at Home Due to COVID-19
- Infographic: Working from home?
To receive updates on what is new at the Canada Revenue Agency (CRA), you can:
Submitting legal documents related to T1 in Represent a Client
As of October 19, 2020, our online Represent a Client (RAC) service allows you to submit legal documents, such as a will or a power of attorney, to identify you as a legal representative.
This means you don’t have to mail or fax us documents, saving you time and postage.
Changes to authorization validation for representatives over the telephone
The CRA has a legal obligation to protect confidential taxpayer information. Therefore, we can provide confidential information only to the taxpayer or individuals the taxpayer has authorized.
To share confidential taxpayer information with you over the phone, the CRA needs to be able to validate that you are authorized on the taxpayer’s account.
As of January 2021, if you are a representative associated with a firm, a business or a group, you must have your own RepID and provide it to the CRA before you can represent your client. This will significantly enhance the security of confidential taxpayer information by allowing our agents to verify that you are authorized on the taxpayer’s account.
The taxpayer does not have to sign and submit a new authorization request for this change. The administrator within RAC for the business number (BN) or GroupID with administrative rights on the business number (BN) or the GroupID can associate your new RepID to the BN or GroupID.
You can register for your RepID in advance at canada.ca/taxes-representatives.
To receive updates on what is new at the Canada Revenue Agency (CRA), you can:
If you are interested in participating in one of the CRA CEWS Q&A sessions, please see the schedule and RSVP information in this PDF.
The Dedicated Telephone Service (DTS) is now a permanent CRA program available nationally.
By using the service, income tax service providers can connect with experienced CRA officers from the Income Tax Rulings Directorate who will be able to help them interpret the provisions of the Income Tax Act. After determining the nature of the tax issue, these officers will carefully consider the question and then send the service provider helpful information and guidance.
While these officers do not have access to individual taxpayers’ accounts, the DTS is a valuable technical resource to help service providers resolve their interpretive tax issues.
To register, small- and medium-sized income tax service providers – those with 50 or fewer partners – are invited to fill out and send the completed DTS registration form to firstname.lastname@example.org. You can also visit the DTS web page for further information about the service, including eligibility criteria and more details on how the service can help.
We recognize the vital role that the Scientific Research and Experimental Development (SR&ED) Program plays in supporting Canadian businesses. We are doing everything we can to ensure that businesses receive their credits as soon as possible during these difficult times, and that innovation and creativity are fully supported when they are most needed.
The Canada Revenue Agency (CRA)’s Business Continuity Plan has been adjusted to include priority activities that support the economic well-being of Canadians. This includes programs like SR&ED.
Here are some measure the CRA is implementing:
- Most refundable claims will be processed as soon as possible with minimal burden on the claimants, injecting funding into businesses that need it now to help manage the adverse financial implications of the pandemic. Claims accepted at this time may be subject to review/audit at a future date to ensure eligibility.
- The CRA is prioritizing objections inventory related to critical programs, including SR&ED claims.
- We will generally not contact small or medium businesses to initiate any SR&ED claim reviews. This pause is reflective of the CRA’s efforts to mitigate health risks and minimize the burden on businesses, while concentrating on prioritizing the delivery of benefits to Canadians during this challenging time.
- Any taxpayer under audit who wishes or needs their SR&ED claim review to proceed may work with their auditor remotely by telephone and through My Business Account to advance the file as much as possible under the current circumstances.
- If you have questions about the status of your SR&ED claim, we continue to be available to help and answer questions; please contact the SR&ED Program in the tax services office that serves your area. For contact information, go to canada.ca/taxes-sred.
- Should you have questions on other topics such as filing and payment deadlines and proactive relief measures, the CRA’s liaison officers will be available exclusively by phone to provide the key information that small businesses and self-employed individuals need most urgently. Business owners and self-employed individuals can fill out the Liaison Officer Service request form to have a liaison officer contact them by phone.
To help employers keep and re-hire workers amidst the challenges posed by the COVID-19 pandemic, the Government is implementing the Canada Emergency Wage Subsidy (CEWS). This important economic measure provides a 75% wage subsidy of up to $847 per employee per week, to eligible employers, for up to 12 weeks, preventing further job losses and encouraging employers to re-hire workers previously laid off as a result of COVID-19, retroactive to March 15, 2020.
The Canada Emergency Wage Subsidy calculator is available to support employers as they prepare to apply for the CEWS.
The CEWS calculator can be found on CRA’s Canada Emergency Wage Subsidy Web page. This Web page incorporates feedback received during user testing with stakeholders, including the Canadian Federation of Independent Business and the Chartered Professional Accountants of Canada. It includes detailed information and instructions about who can apply for the subsidy, how eligibility is assessed, and how the subsidy is calculated. The calculator also includes a printable statement feature that employers can use to view their claim at a glance and, as of April 27, enter required information into the CEWS application form quickly and easily.
By providing employers with additional details about their subsidy claim, the CEWS calculator can equip employers with important information they can use now to make more informed decisions about retaining and re-hiring workers. A series of information sessions will be held in the coming days to provide a forum for eligible employers.
The CRA also encourages employers to sign up for My Business Account or Represent a Client, as employers will be able to apply through these portals. The CRA will open the application process on April 27, 2020. CEWS claims will be subject to verification by the CRA. Funds for approved applications will begin to be released on May 5.
The Canada Revenue Agency (CRA) understands that individuals and businesses might be dealing with difficulties filing their income and benefit returns, and could experience cash-flow challenges in the coming months. In response, the CRA is applying the measures below.
Administrative income tax measures
In addition to the income tax filing and payment deadline extensions announced as part of the fiscal measures, unless otherwise noted, taxpayers may defer a number of other administrative tax actions required under the Income Tax Act (ITA) that are due after March 18, 2020, until June 1, 2020.
These administrative income tax actions include the filing of returns, forms, elections, designations, and responses to information requests. Payment and remitting requirements are not covered by this announcement.
- This measure also does not apply in respect of a prescribed form, receipt or document, or prescribed information, that is required to be filed with the Minister on or after the day specified, in respect of the form, receipt, document, or information, in subsection 37(11) or paragraph (m) of the definition investment tax credit in subsection 127(9) of the ITA.
- Payroll deductions and all related activities (except to the extent they relate to the reduction of remittances related to the temporary wage subsidy) must continue to be done on time.
Trusts, Partnerships and NR4 Information Returns
The deadlines for trusts, partnership and NR4 Information returns are all extended to May 1, 2020. This is due to administrative requirements in advance of the June 1st deadline for filing individual income tax and benefit returns.
To learn more about how the CRA is helping Canadians with the economic impact of the COVID-19 Pandemic, go to Helping Canadians with the Economic Impact of the COVID-19 Pandemic.
The Canada Revenue Agency has cancelled IC 87-2R International Transfer Pricing.
IC 87-2R has been cancelled and archived because it is inconsistent with the interpretation and application of Canadian transfer pricing legislation and does not reflect updates to the Organisation for Economic Co-operation and Development (OECD) Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (the “Guidelines”). It is the CRA’s practice to generally apply the Guidelines in administering Canada’s transfer pricing rules.
For example, IC 87-2R stated that as a general rule, the specific provisions of the Income Tax Act (the “Act”) relating to cross-border debt would be applied before considering the more general provisions of section 247 of the Act. This is inconsistent with CRA’s interpretation of the Act’s transfer pricing legislation. Except as otherwise specified in the tax rules, the CRA considers that section 247 applies to all cross-border transactions with non-arm’s length entities that are relevant under the tax rules. The CRA is generally of the view that subsection 247(2) can apply in conjunction with other provisions of the Act. (See, for example, Income Tax Rulings Document No. 2017-0691071C6 (E) released June 9, 2017, that addresses the interaction between s17 and s247).
IC 87-2R also stated that instances where it is necessary to recharacterize a transaction, under paragraphs 247(2)(b) and (d) of the Act for tax purposes are limited. Specific reference was made to two examples in the 1995 Guidelines. Subsequent to the release of IC 87-2R, the Guidelines have been updated twice – in 2010 and 2017, and now, consistent with the wording of the transfer pricing provisions of the Act, provide support for a broader application of the recharacterization provision. The CRA will consult the Transfer Pricing Review Committee regarding the application of paragraphs 247(2)(b) and (d) in any material situation involving a transaction or series of transactions that would not have been entered into between persons dealing at arm’s length where it is reasonable to consider that the transaction or series was not undertaken primarily for bona fide purposes other than to obtain a tax benefit.
In addition to the OECD published Guidelines, the CRA has published a number of transfer pricing memoranda (TPMs) to provide further, and more current guidance on specific aspects of the transfer pricing legislation. The CRA will continue to issue and update its TPMs and will look for an opportunity to consolidate its guidance into a new information circular or similar document in the future.
New and enhanced services
Check CRA processing times – Want to find out quickly how long CRA will take to handle your request? Use the Check CRA Processing Times tool on canada.ca to get a targeted completion date. The new tool uses published service standards and information you select from drop-down menus to calculate targeted completion times for various programs.
Dedicated telephone service for tax service providers – CRA is offering this service to small and medium income tax service providers across Canada for the 2020 tax filing season. By using this service, income tax service providers can connect with experienced CRA officers who assist with complex tax questions.
Changes to the income tax and benefit return – CRA has made a couple of formatting changes. Line numbers that were three or four digits are now five digits (for example, line 150 on the return is now line 15000), and the former Schedule 1 is now part of the return.
Representative authorizations – A new e-authorization process for online access to individual tax accounts was introduced February 10, 2020. You will be able to request access to individual tax accounts using a web form through Represent a Client. The existing T1013 form will be discontinued for access to individual tax accounts. The T1013, RC59, and NR95 will be combined into one form called the AUT-0 Authorize a Representative for Access by Phone and Mail. This form will only be used to request offline access to individual and business tax accounts.
Changes to benefits, credits, deductions, and programs
Canada Pension Plan (CPP) enhancement – Employed individuals should report their base CPP/Quebec Pension Plan (QPP) contributions on T4 earnings as a non-refundable tax credit at line 30800 of the income tax return. For 2019 and subsequent tax years, the new deduction for the enhanced CPP contributions on T4 earnings will be allowed at new line 22215 on the income tax return.
Self-employed individuals should report half of the base amount of their CPP/QPP contributions on self-employed income at line 31000 (formerly line 310 for 2018 and prior tax years) as a non‑refundable tax credit. The other half of the base amount and the full amount of the enhanced CPP contributions on self-employed earnings will be allowed as a deduction at existing line 22200.
Canada training credit limit – Eligible workers of at least 25 years old and less than 65 years old at the end of 2019 and later years, and who meet certain conditions will accumulate $250 a year, up to a lifetime limit of $5,000 to be used in calculating their Canada Training Credit, a new refundable tax credit available for 2020 and future years.
Based on the information on their return, the CRA will determine their Canada training credit limit for the 2020 tax year and provide it to them on their notice of assessment for 2019 and will be available in My Account.
For 2020 and future years, an individual may be able to claim a Canada Training Credit equal to their Canada Training Credit Limit for the year or 50% of their eligible tuition and fees paid to an educational Institution in Canada, whichever is less.
Canada workers benefit – The Canada workers benefit, formerly the working income tax benefit, is a refundable tax credit available to eligible individuals and families who work, but earn low income. As of February 2020, a simplified version of the advance payments application will be available in My Account.
Climate action incentive payment – The federal fuel charge will no longer apply in New Brunswick as of April 2020. This means that residents of New Brunswick will no longer receive the climate action incentive payment when they file their income tax returns.
Eligible individuals who are residents of Alberta may now claim the climate action incentive payment. The climate action incentive payment may still be claimed by eligible individuals who are residents of Saskatchewan, Manitoba, or Ontario.
A 10% supplement is available to eligible individuals in these provinces who are residents of small or rural communities. The climate action incentive payment is first used to reduce any balance owing, and then it may create or increase a refund.
Withdrawals have increased under the Home Buyers’ Plan – The maximum amount that can be withdrawn from a registered retirement savings plan under the Home Buyers’ Plan increased from $25,000 to $35,000, for withdrawals made after March 19, 2019.
Cannabis as a medical expense – Certain cannabis products bought for a patient for medical purposes are eligible for the medical expense tax credit.
The patient must:
- be a holder of a medical document as defined in the Cannabis Regulations
- be registered as a client of the holder of a licence for sale; and
- make their purchases from the holder of a licence for sale they are registered with.
Tuition and enrolment certificate – The new T2202, Tuition and Enrolment Certificate replaces T2202A, Tuition and Enrolment Certificate for the 2019 and following tax years. Flying schools and clubs will now report information on the new T2202.
Kinship care providers – For 2009 and later years, for the Canada workers benefit and the former working income tax benefit, a care provider may be considered to be the parent of a child in their care, regardless of whether they receive financial assistance from a government under a kinship care program. As a result, the care provider may be entitled to claim the child as an eligible dependent for purposes of claiming the benefit.
Also, for these years, financial assistance payments received by care providers under a kinship care program are not included in income and not included when determining entitlement to benefits and credits based on income.
Communal organizations – For 2014 and later tax years, business income earned by the trust that is allocated to a member of the communal organization is deemed to be income from a business carried on by that member. This may allow members of a communal organization to claim the Canada workers benefit for 2019 and later years and the working income tax benefit for the 2014 to 2018 tax years.
The federal basic personal amount for most Canadians increased on January 1, 2020.
The CRA has updated the following payroll references on Canada.ca with the new basic personal amount for 2020:
- Form TD1 2020 Personal Tax Credits Return;
- Guide T4032, Payroll Deductions Tables;
- Guide T4008, Payroll Deductions Supplementary Tables;
- Guide T4127, Payroll Deductions Formulas; and
- Payroll Deduction Online Calculator.
For more information on the increased basic personal amount, visit the Basic personal amount web page on Canada.ca.
The Canada Revenue Agency is introducing new digital processes in February 2020 to simplify the way practitioners request online authorizations.
- A new e-authorization process for online access to individual tax accounts. As a representative, you’ll be able to request access using a web form through Represent a Client. Similar to the authorization process for business tax accounts, you will need to scan and submit a signature page that has been signed by the individual.
- The existing T1013 form for access to individual tax accounts will be discontinued. The T1013, RC59, and NR95 will be combined into one form called the AUT-01 Authorize a Representative for Access by Phone and Mail. This form will only be used to request offline access to individual and business tax accounts.
Do not submit the AUT-01 form if you have an existing authorization for online access. All AUT-01 submitted to the CRA will be processed as new requests and will override previous T1013 submissions. This means representatives will lose their online access if they submit an AUT-01 form (with the exception of non‑residents, as there are no online services for non-residents).
- If you use T1 or T2 software, instead of Represent a Client, to e-submit a request for online access to individual and business tax accounts, a new signature page will be generated. This new page must be signed by the client and retained by the representative for six years.
There is no requirement to submit a copy of this signature page, unless requested by the CRA.
- Removal of some restrictions for e-submitting an authorization using T1 or T2 software.
- Discontinuation of barcodes for authorization requests.
- Existing authorizations for individual tax accounts of deceased persons will no longer be cancelled. This will avoid having to re-authorize the same representative after the client’s date of death.
Practitioners should note that these changes will take effect on February 10, 2020 and continue to use the existing Representative authorization processes until that date.
The Canada Revenue Agency (CRA) is planning a number of sessions across the country to consult on changes being proposed to the Agency’s authorization processes. The two sessions in BC will be held in Vancouver on November 12, 2019 at 9 a.m. to 12 noon, and 1 to 4 p.m. Interested practitioners can sign up by sending an email to: BRD-BN-PPG@cra.gc.ca.
This is your opportunity to provide input to the Business Number and Authorization Division at CRA as they determine how to streamline and improve their processes around third-party authorizations. CRA has indicated that they wish to understand where the issues are for third-party representatives, and hear suggestions and ideas on how to make the process more efficient, secure, and effective.
Hybrid mismatch arrangements are one of the types of base erosion identified in the Organisation for Economic Co-operation and Development (OECD)/G20 project on Base Erosion and Profit Shifting (BEPS). Hybrid mismatch arrangements are tax plans intended to secure a tax advantage within a multinational enterprise by exploiting differences in the tax treatment of the same financial instrument or entity between different jurisdictions. The Canada Revenue Agency (CRA) confirmed that it has resolved a file regarding a hybrid mismatch arrangement involving the deduction of non-arm’s length interest in a series of transactions that included a forward subscription agreement (outlined in the diagram below) on the basis that paragraphs 247(2)(b) and (d) of the Income Tax Act and transfer pricing penalties applied.
It is the CRA’s general view that such transactions are undertaken primarily to obtain a tax benefit and that they would not be undertaken by parties dealing at arm’s length. When the CRA finds transactions similar to the example below, the Transfer Pricing Review Committee will be consulted regarding the application of paragraphs 247(2)(b) and (d). Where these paragraphs apply, related transfer pricing penalties will generally apply on the basis that taxpayers engaging in this type of tax planning did not use reasonable efforts to use arm’s length prices, terms and conditions in their transfer pricing.
Taxpayers and their advisors are invited to contact their International and Large Business Case Manager or the CRA’s International and Large Business Directorate for more information.
The Government of Canada is making updates to its secure online services to feature higher security standards. To protect the confidential information of Canadians, the Canada Revenue Agency (CRA) has upgraded its online security protocols to safeguard your data.
The security upgrades apply to all secure communications to or from the CRA. This includes, for example, accessing services or submitting documents through My Account or My Business Account.
If you are using an older internet browser that has not been updated, you might see one of the following messages when attempting to access the CRA’s secure online services:
- Page Can’t Be Displayed
- Cannot Establish a Secure Connection
- Page Not Available
Upgrading to an updated version of your browser will resolve this issue. Find more information about updating your browser to use CRA’s secure online services.
The Honourable Diane Lebouthillier, Minister of National Revenue, has released the Report on the Canada Revenue Agency’s 2018 Serving You Better Consultations with Small and Medium Businesses.
Stay up to date on the implementation of CRA’s action plan by tracking how the CRA is helping small and medium businesses.
The Canada Revenue Agency (CRA) has identified a high risk of non-compliance with tax laws in the real estate sector. To make sure taxpayers meet their tax obligations, the CRA has been increasing its efforts in this sector by identifying and auditing transactions where individuals and businesses are not paying their fair share of taxes.
The CRA is making significant progress in detecting non-compliance within this sector by using intelligence gathered through a variety of sources at its disposal, as well as through specialized audit teams. New technologies are also helping the CRA to more effectively integrate, and analyze data, resulting in better business intelligence.
Since 2015, CRA audits have identified over $1 billion in additional gross taxes related to the real estate sector. During this same period, CRA auditors reviewed over 41,700 files in Ontario and British Columbia, resulting in over $100 million in assessed penalties. Specifically in 2018-2019, the CRA assessed $171 million more in additional gross taxes related to real estate than in 2017-2018, a 65% increase. Penalties also totaled over $57 million, which is more than double compared to the year prior.
Budget 2019 proposes to build on this success by providing $50 million over five years and $10 million ongoing to create a Real Estate Task Force that will focus initially on the Greater Toronto and Greater Vancouver areas, and which will follow the risk as it evolves over time. This Task Force will further enhance the Agency’s efforts to combat tax non-compliance in the real estate sector. This will have a direct impact in deterring tax non-compliance in the real estate market. The additional taxes also support the social programs administered by the federal government that benefit all Canadians.
Taxpayers should be aware of their tax obligations when conducting real estate transactions. Learn more on the key areas of compliance risk in the real estate sector and see the results of the CRA’s compliance actions.
The Canada Revenue Agency has launched public consultations to improve its service to Canadians. Practitioners and their clients are encouraged to provide feedback using the online consultation until June 18, 2019.
The Canada Revenue Agency offers free in-person support and guidance to small businesses and self-employed individuals to help them understand their tax obligations, and avoid common errors that could end up costing time and money. Check out the details in this presentation and visit canada.ca/cra-liaison-officer for more information on the Liaison Officer service.
- Email notifications – In February 2019, CRA is launching an improved email notification service. Once signed up for the service, your clients will receive an email notification when correspondence is available to view in My Account and the MyCRA mobile web app or when there are important changes made to their account, such as an address or direct deposit update. You can help your clients get started with email notifications by entering their email address on the income tax and benefit return you prepare for them through EFILE or on paper. If you have provided your email address in Represent a Client, you will be notified at the same time as your clients when there is mail for you to view. You will only get an email if your client is signed up for email notifications and if you are the current representative.
- ReFILE lets you adjust your client’s returns using tax software – The ReFILE service lets tax professionals and tax preparers send changes to the CRA for their client’s 2018, 2017, 2016 and 2015 returns using EFILE filing software. Tax professionals and tax preparers must make sure their clients have received their notice of assessment before sending a change through ReFILE.
- Mailing a paper 2018 Income tax package to your client – This year, the CRA will mail the new all-in-one 2018 Income tax package to Canadians who paper filed in the previous tax season. If your client does not receive a tax package from the CRA by February 11, 2019, Canadians can find what they need online or order a paper copy from the CRA. An order limit of nine packages per individual will ensure all Canadians have access to what they need this filing season. Please encourage your client to bring their personalized 2018 Income tax package to you.
- Expansion of the Dedicated Telephone Service (DTS) for small and medium income tax service providers – This year, the DTS is available nationally and eligibility for the service has expanded to include more Chartered Professional Accountants (CPAs) and non-CPA income tax service providers such as bookkeepers and tax preparers. By using the free service, you will be able to connect with experienced CRA officers from the Income Tax Rulings Directorate who will be able to help you solve complex tax problems. To register, you are invited to access the DTS registration form on our website.
Changes to credits and deductions
- The Medical expense tax credit has been expanded to allow expenses related to service animals who are specially trained to perform specific tasks for a patient with a severe mental impairment that helps the patient cope with the impairment. Eligible expenses paid in 2018 include the cost of the animal, the care and maintenance of the animal (food and veterinary care), reasonable travel expenses paid for the patient to attend a school, institution, or other facility that trains in the handling of these animals, and reasonable board and lodging expenses paid for the patient’s full-time attendance at a school, institution, or other facility.
- The Climate Action Incentive (CAI) payment can be claimed by eligible individuals who are residents of Saskatchewan, Manitoba, Ontario or New Brunswick. A new Schedule 14 will be included with the T1 package for these provinces to allow eligible individuals to claim the CAI payments they are entitled to based on their family composition. A 10% rural CAI supplement is available to residents of small and rural communities who live outside a Census Metropolitan Area (CMA), as defined by Statistics Canada
This is a reminder that your clients might have to submit the new Form NR95 Authorizing or Cancelling a Representative for a Non-Resident Tax Account to maintain your current authorization(s).
If not already done, owners of non-resident tax accounts must reauthorize their current representatives using Form NR95 by December 31, 2018 to maintain their existing authorization. All future authorizations must be submitted to the Canada Revenue Agency using Form NR95. Visit the CRA website for more information on the new process and/or to obtain the new form.
The purpose of “Serving You Better” consultations is to help the Canada Revenue Agency better understand the needs of Canadian small and medium businesses. “Serving You Better” is a key part of the CRA’s commitment to delivering first-class federal government services to small and medium businesses. Through these consultations, CRA invites comments and suggestions from small and medium business owners and their accountants. When you give feedback to CRA, you are helping CRA create programs and services that are fairer, more helpful, and easier to use.
- Introducing the Pensionable and insurable earnings review (PIER) service– In February 2018, a new service will be introduced in My Business Account and Represent a Client (level 2 and 3 representatives) that will display:
- a list of PIER cases sorted by tax year or case number
- a detailed summary of PIER discrepancies
- a list of employees included in the PIER, including their total earnings, pensionable earnings, insurable earnings, deductions reported and required, and deficiencies.
- Changes to Form T183 and Form T1013 – T183, Information Return for Electronic Filing of an Individual's Income Tax and Benefit Return, no longer has an area for taxpayers to authorize a representative to deal with the Canada Revenue Agency (CRA). Instead, authorization is given through T1013, Authorizing or Cancelling a Representative.
- Auto-fill a T2 Return – The latest version of a T2 return will be available with Auto-fill my return for authorized individuals to import, review, and accept into their EFILE software.
- Submit a Business consent form RC59 through EFILE – Approved Efilers can now submit electronic business consent (RC59) or cancel business consent or delegated authority (RC59X) forms online year round through certified EFILE software.
- View transactions and pay balances with CRA BizApp – The CRA has released a new mobile web app called CRA BizApp. This app lets small businesses and sole proprietors view their business account balances and make payments by pre-authorized debit to their corporation, goods and services tax / harmonized sales tax (GST/HST), payroll, and excise duty accounts.
- Don’t make clients wait for notices of assessment; get them an Express NOA – This service delivers a notice of assessment directly into your certified tax software shortly after you file the return electronically. To use the service, individuals must be registered for online mail and file electronically using a certified tax software.
- ReFILE lets you adjust returns using tax software – The ReFILE service now lets individuals send the CRA changes to their return using NETFILE filing software. Individuals must make sure they receive their notice of assessment before sending a change through ReFILE.
- Get Online mail directly in My Account – The CRA is adding more mail for individuals to receive directly in My Account. This tax season, online mail provides correspondence about tax free savings accounts, notices of assessment, benefit notices and slips, and more, including correspondence from some of the CRA’s review programs (e.g. requests for receipts).
- Protect your account with Account Alerts – For added security, when a representative is added, deleted, or changed on an individual’s account, an email will be sent to the individual notifying them of the recent activity on their account.
- Automatically fill in parts of a return with Auto-fill my return – Authorized representatives will now see more information, such as their clients’ repayable balance for the Home Buyers’ Plan and the Lifelong Learning Plan.
Changed credits and deductions
- Canada caregiver credit – This non-refundable tax credit replaces the family caregiver credit, the credit for infirm dependants age 18 or older, and the caregiver credit. It gives tax relief to eligible individuals who have a spouse or common-law partner or a dependant, with an impairment in physical or mental functions.
- Disability tax credit (DTC) certification – Nurse practitioners across Canada can now certify the application form for the DTC.
- Medical expense tax credit – If you need medical intervention to conceive a child, you may be eligible to claim certain expenses even if you do not have a medical condition. These expenses are the same as those that would generally be allowable for individuals who have a medical condition. If you had fertility-related expenses for any of the 10 previous calendar years and you have not claimed them, you can request a change to your income tax and benefit return(s) to include these eligible expenses.
- Tuition, education, and textbook credits – As of January 1, 2017, the federal education and textbook credits were eliminated. However, you can still carry forward unused amounts from previous years. Also, with certain conditions, you may now be able to claim the tuition amount for fees you paid to a post-secondary educational institution for occupational skills courses, even if they are not at a post-secondary level.
- Children’s credits – As of January 1, 2017, the children’s arts tax credit and children’s fitness tax credit were eliminated.
- Public transit tax credit – As of July 1, 2017, this credit was eliminated. For this tax year, you can claim the cost of eligible public transit expenses only for travel taken from January 1 to June 30, 2017.
Did you know businesses can use the CRA’s Internet file transfer or Web Forms application to file some information returns online? Using Web Forms, businesses can access some electronic slips, send them to the CRA, and receive an immediate confirmation of receipt. Our Web Forms application saves time and money.
Use the Web Forms application to:
- file original, additional, amended, and cancelled slips directly from the CRA website;
- validate data in real time, with prompts to correct errors before filing your slips;
- calculate summary totals;
- save and import information;
- print slips for recipients; and
- securely send encrypted returns online.
For more information, go to the Web Forms page.
Managing a trust can be taxing, but filing your tax return shouldn’t be. New this year, trust administrators and their representatives can file a simple T3 Trust Income Tax and Information Return (T3RET) online using the Canada Revenue Agency’s (CRA) secure Internet File Transfer service. A simple or “NIL” return means that a trust’s taxable income, total taxes payable, and refund or balance owing are $0.00.
Online filing for simple trust returns is available for 2017 and later tax years. Certain conditions must be met in order to file your trust return online. Find out if your return is eligible for online filing on the How to file a T3 return webpage.
Canadians expect and deserve a fair and equal, user-friendly tax system, and that’s what the CRA is working to deliver.
It’s been just over a year since the Auditor General tabled the 2016 Fall Report on the Canada Revenue Agency’s (CRA) objections process. In his report, the Auditor General found that the CRA faced some challenges in resolving objections in a timely manner, and made eight recommendations to help improve the process.
Over the past year, the CRA has taken several steps to improve the way it manages objections, and has been seeing results. Since fall 2016, the CRA has:
- updated its objections-related webpages to provide clear and accurate information about the different levels of complexity for objections and their processing times;
- improved internal processes and hired more employees to support the changing workloads;
- began communicating with many taxpayers within 30 days of receiving an objection to ensure their file is complete and ready to be worked on; and
- introduced a new service standard for resolving low-complexity objections within 180 days, 80% of the time.
While the CRA has made progress in implementing the recommendations from the Auditor General’s report, the Agency will continue building on this success to ensure that objections are processed in a timely manner.
Starting in April 2018, the CRA will implement a new service standard for resolving medium-complexity objections within 365 days, 80% of the time. These objections involve issues with business expenses, partnerships, more complex individual income tax issues, and issues related to small and medium corporations. This service standard has recently been published on our objections-related webpages.
To provide taxpayers with more accurate and transparent information about the objections process, the CRA is updating its objections webpages monthly to include the average number of days taken to resolve medium-complexity objections, starting from the date they were submitted. To ensure these timeframes are accurate, the estimates include the entire time an objection has been within the control of the Government of Canada.
The CRA recognizes the importance of providing timely, client-focused service to Canadians, and will continue taking steps to improve the objections process. As a result of past and ongoing improvements, the CRA is on track to reach its timeliness goals during the 2017-2018 fiscal year.
For more information on objections and timelines updates, go to the CRA’s complaints and disputes webpage.