The Canada Revenue Agency (CRA) is set to pilot a new automatic tax filing system in 2024.
This new pilot program was announced in the federal government’s 2023 to 2024 fiscal budget on March 28, 2023, as part of its goal to “Making Life More Affordable” for Canadians. Automatic tax filing is already a reality in many other countries, including the United Kingdom and New Zealand.
Up to 12 per cent of Canadians currently do not file their tax returns—the majority of whom are low-income, and would pay little to no income tax. In fact, many of these low-income Canadians are missing out on valuable benefits and support to which they are entitled, such as the Canada Child Benefit and the Guaranteed Income Supplement.
Since 2018, the Canada Revenue Agency (CRA) has delivered a free and simple File My Return service, which allows eligible Canadians to auto-file their tax return over the phone after answering a series of short questions. Canadians with simple tax situations and lower or fixed income receive an invitation letter from the CRA to use File My Return, and in the 2022 tax filing season, approximately 53,000 returns were filed using this service.
To ensure more low-income Canadians have the ability to quickly and easily auto-file their tax returns, Budget 2023 announces that the federal government will increase the number of eligible Canadians for File My Return to two million by 2025—almost triple the current number. The government will report on its progress in 2024.
Budget 2023 also announces that, starting next year, the CRA will pilot a new automatic filing service that will help vulnerable Canadians who currently do not file their taxes receive the benefits to which they are entitled. Following consultations with stakeholders and community organizations, the CRA will present a plan in 2024 to expand this service even further.
How do I use Auto-fill my return?
Individuals
To use the Auto-fill my return service, you must:
- be registered for My Account
- be using a NETFILE-certified software
When you are ready to use Auto-fill my return, your software will prompt you to enter your My Account user ID and password. Follow the steps provided in the software you are using. Once Auto-fill my return has populated your return with the information, make sure that all the proper fields on the return are filled in and that the information provided is true, accurate and complete before you file your return.
Preparing a tax return for a family member or a friend
Individuals can also use Auto-fill my return on behalf of a family member. If you prepare a tax return for a family member or a friend, you need to:
- be authorized by your family member or friend to use Auto-fill my return on their behalf. You will need a RepID, which you can get through the Represent a Client portal. The RepID identifies you with the CRA.
- give your RepID to your family member or friend so they can authorize you as their representative through their My Account. For more information on authorizing a representative, go to Authorize or cancel a representative.
- once you are authorized, you can use Auto-fill my return to access their tax information and file a return for them.
Each individual should enter their own CRA user ID and password to use this service. Auto-fill my return can be used for the current tax filing year plus the previous six tax years.
Sources:
https://www.budget.canada.ca/2023/report-rapport/chap1-en.html
https://www.canada.ca/en/revenue-agency/services/e-services/about-auto-fill-return.html