Some New Provisions Will Not Be Assessed Right Away

Walter Harder

Last week, CRA warned taxpayers that two of the proposed revisions for 2021 return are included on the T1 and schedules but will not be assessed until those provisions are given Royal Assent.

The two credits are

• the rate increase from 15% to 25% for the Eligible Educator School Supply Tax Credit and the inclusion of additional types of expenses and
• the Refund of Fuel Charge Proceeds to Farmers.

CRA will not process claims for these credits until Bill C-8, which includes these changes, is passed by both houses and receives Royal Assent.  The bill is currently in review by the House of Commons Standing Committee on Finance.

So, what do you do for clients who are eligible for these credits?  If you claim them and file the returns, their assessment will be held up until the Bill is passed.  If the client has a refund coming, then that refund will be held up.  If the client has a balance due, that balance must still be paid by April 30 to avoid interest charges.  And, should the credit not be accepted, the amount paid could be insufficient to cover the assessed taxes due resulting in interest charges on the amount underpaid.

Probably the best course of action for such clients is to file the return without the claim and then file a Request for Adjustment once the Bill is passed.  You’ll want to keep a list of affected clients so you can contact them when the Bill is passed.