How lower income individuals can receive valuable tax benefits by using CRA's new free SimpleFile program

Introduction to the CRA SimpleFile Program

David J Rotfleisch, CPA, JD is the founding tax lawyer of Taxpage.com and Rotfleisch & Samulovitch P.C., a Toronto-based boutique tax law corporate law firm.

THE Canada Revenue Agency has launched a new program that allows lower-income and vulnerable Canadians to gain access to valuable tax benefits and tax credits which arise from filing a tax return each year. In order to receive benefit payments such as the Canada child benefit or goods and services tax sales credit, taxpayers must file a yearly T1 individual income tax return.

Some Canadians who would benefit from the assistance offered within the tax system are unable to take advantage of available tax credits by failing to file the T1 tax returns necessary to begin receiving benefits embedded within the Canadian tax system.

SimpleFile: Access To Benefits for All

The SimpleFile system is intended to allow eligible individuals to file their 2023 income tax and benefit return by phone, digitally, or by paper— increasing the accessibility to the tax system by a simplified filing method which is free, secure, and easy to use. In early 2024, the CRA invited more than 1.5 million Canadians with a low or fixed income with simple tax situations to use SimpleFile by phone to file their 2023 returns. Over 90 per cent of those invitees have utilized SimpleFile to file their 2023 T1 income tax returns.

On July 30, 2024, the CRA expanded the program and sent more invitations to over 500,000 eligible individuals by mail or email notification to view the letter in CRA My Account. The SimpleFile program has already enabled tens of thousands of Canadian taxpayers to access benefits that have been previously lost, due to the difficulty many taxpayers face in filing a yearly T1 income tax return.

Eligibility Requirements For SimpleFile Services

To be eligible for the SimpleFile services, a taxpayer must:

• have income under a threshold determined based on age, province of residence, and disability status;
• have income exclusively from one of the following sources:
  • Old Age Security – T4A(OAS)
  • Guaranteed Income Supplement / Net federal supplements – T4(OAS)
  • Canada or Quebec Pension Plan benefits (including disability benefits) – T4A(P)
  • Employment income – T4
  • Employment Insurance Benefits – T4E
  • Workers' compensation benefits – T5007
  • Social assistance payments – T5007
  • Canada Emergency Benefits – T4A
  • Some Interest Income – T5 (box 13)

If a taxpayer falls into the eligibility requirements listed above, the CRA will send an invitation letter to file. The invitation will indicate the filing options available and instructions on completing them. Once the return is assessed, a notice of assessment will be issued in connection with the applicable tax year. It is important to note that for Quebec residents, the SimpleFile program only assists with the federal tax return. Meaning it does not complete and submit a provincial tax return with Revenu Québec.

SimpleFile Filing Options

Taxpayers who are invited to participate may receive the following options for using SimpleFile:

SimpleFile by Phone:

• Available 21 hours a day between 6 am and 3 am (Eastern time), 7 days a week from: July 15, 2024, to January 24, 2025. This option will take approximate 5 to 10 minutes.
• Taxpayers will need to verify some personal information and answer a series of questions using the phone keypad.
• There are no forms to fill out or calculations required.
• There is no need to speak to an agent to use this service.
• In order to be eligible for this service, a taxpayer must have a recent filing history. Taxpayers do not need to have an income to use this option.

• Available 21 hours a day between 6 am and 3 am (Eastern time), 7 days a week from: July 3, 2024, to January 24, 2025. This option will take approximately 10 to 20 minutes.
• Taxpayers will need to use the validation code provided in the invitation letter, provide some personal information, and answer a series of questions.

SimpleFile by Paper:

• Always available, but the form can only be used for the tax year specified on the form. This option will take approximately 25 minutes or less.
• Taxpayers will need to provide some personal information, confirm the information about income provided in the invitation letter package, and send the form back to the CRA using the envelope provided (no postage necessary)
• This option is available to those with tax exempt income and without income. This option is also available to those without a filing history.

The current pilot program rollout of the SimpleFile services will only allow taxpayers to file for the immediately prior taxation year. It is unclear whether the future program will permit taxpayers to file for tax years outside of the most recent year but, as of right now, taxpayers will not be able to use SimpleFile for any other preceding year.

David J Rotfleisch, CPA, JD is the founding tax lawyer of Taxpage.com and Rotfleisch & Samulovitch P.C., a Toronto-based boutique tax law corporate law firm and is a Certified Specialist in Taxation Law who has completed the CICA in-depth tax planning course. He appears regularly in print, radio and TV and blogs extensively.  

With over 30 years of experience as both a lawyer and chartered professional accountant, he has helped start-up businesses, cryptocurrency traders, resident and non-resident business owners and corporations with their tax planning, with will and estate planning, voluntary disclosures and tax dispute resolution including tax audit representation and tax litigation. Visit www.Taxpage.com and email David at david@taxpage.com.

Read the original article in full on Tax Law Canada. Author photo courtesy Rotfleisch & Samulovitch P.C. Title image: iStock (modified). Title image: Screenshot, SimpleFile program, Canada Revenue Agency.