Mark Your Calendar: Expect a Record-Breaking Tax Season

The EFILE and ReFile services at CRA will officially close for transmission on January 26, 2024 as CRA gets its computers ready to receive 2023 tax returns.  However, records have already been broken in the tax filing world in 2024.  For the first time, over 32 million tax returns were filed with CRA in the period February 6, 2023 to January 5, 2024.  Only 7.7% of these returns were filed on paper, and 0.2% by phone under the File My Return option.  Here are some first glimpses at tax compliance, filing and investment milestones that take effect in January; the start to a tax season, which promises to break tax filing records again, especially because EFILE rules have changed:

File Late 2022 Returns Now.  The EFILE and ReFILE services are open for transmission from February 20, 2023 at 8:30 a.m. (Eastern time), until January 26, 2024. 

Filing 5 Returns or More?   Will CRA require an EFILE registration for those who prepare and accept payment for 5 or more returns this tax season?  It’s a budget 2021 announcement has now been officially confirmed.   In fact, mandatory electronic filing, which has its own acronym (MEF) will apply to 5 or more T1, T2 and T3 returns.  Don’t worry about this if you prepare friends and family returns for free or as an employee who files returns as part of duties at work.  However, these new EFILERs will need to get EFILE certified software this year – no home-based products will do.

Since January 1:   The new GAAR, AMT, Intergenerational Transfers, Employee Ownership Trust Rules begin.  Also, remittances to Receiver General over $10K must be electronic.  Tax Planning milestones:

• Contribute to the TFSA - Annual limit $7000; Lifetime limit $95,000
• Contribute to the new FHSA - Annual Limit $8000. Lifetime Limit $40,000

January 5:    GST/HST Credit payment arrived

January 12:  Canada Workers Benefit (CWB) Advanced Payment arrived

January 15:  Climate Action Incentive (CAI) Payment arrived.  Tax Planning milestones:

• Identify the value of these payments for lower income households, who often don’t understand why they are receiving them.Encourage savings in tax-preferred investment accounts like the TFSA, RRSP, FHSA, RESP or RDSP.Explain differences, eligibility and benefits.

January 17:  KB Virtual CE Summit: T1 Advanced Tax Update

January 18:  Pay off CEBA loan to preserve forgivable portion

January 19:  Canada Child Benefit (CCB) payment arrives.  Tax Planning milestones:

• Save CCB in RESP to receive the Canada Education Savings Grants or Bonds

January 24:  Bank of Canada interest rate announcement, KB Toronto: T1 Advanced Tax Update;

January 26:  KB Calgary: T1 Advanced Tax Update

January 29:  CPP, OAS, GIS benefits payment date

January 30:  Make interest payment on inter-spousal loans for the immediately prior tax year; Canada Veterans’ Disability Benefit arrives

January 31:  T10 PAR slip due, which restores RRSP room in case of exit from DPSP or RPP

Bottom Line:  January is a great month to kick off tax-efficient savings, share tax literacy education (do your clients really know what all these acronyms mean?) and share a 2024 Tax Filing and Investment Milestones Checklist.  You can receive a copy free – over 100 entries to consider – a New Year’s gift to you from Knowledge Bureau as a Knowledge Bureau Report subscriber.