T1 – Improvements to CRA services and new tax measures

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The information in this article comes form the article T1 season: What’s new this year? published on the CPA Canada website.

CRA service improvements

New authorization processes

The Canada Revenue Agency (CRA) has introduced new processes for authorizing taxpayer representatives. We invite you to download the summary prepared by CPA Canada. Before you ask your clients to authorize you, your clients should understand what level of access you gain and what it will allow you to do. If you can’t print the CRA version of the authorization forms to get your client’s signature, the CRA says it will consider granting authorization if you use your own document — as long as it contains all the information on the CRA form. From a practice risk perspective, however, CPA Canada believes that printing the authorization form from your T1 software and having the client sign that form will help minimize errors.

T2202 Tuition and Enrolment Certificate

You can now import the T2202 data from the CRA’s Represent a Client (RAC) portal to your clients’ income tax return. Although educational institutions are required to file the new T2202 annual information return with the CRA, this initiative is new for 2019 returns, so there may be problems during this transition. We therefore don’t recommend that you rely completely on this new feature. Rather, we suggest you ask your clients for this information directly and confirm that any information you import from RAC is complete and accurate.

PayPal payments accepted

You and your clients can now pay tax bills using PayPal through a third-party service provider.

Tax changes to come 

Some new measures don’t take effect until 2020, but you can help your clients plan for next year’s tax filings by discussing these changes with them now.

The basic personal amount (BPA) will rise to $13,229 in 2020, with more increases each year until the BPA reaches $15,000 for 2023 and later years. However, the enhanced portion of the BPA is gradually reduced for people with higher incomes and fully eliminated for the highest earners. Also, the new 2020 TD1 form requires people who won’t get the entire enhanced BPA to complete TD1-WS form, which helps them calculate their revised amount. Your clients may ask you to assist them with these forms.

New T1134 deadline

Next year, the deadline for reporting foreign affiliate information on T1134 forms changes to December 31, 2021 (i.e. 12 months after the reporting taxpayer’s tax year-end). For the following years, the deadline will change to October 31 (i.e. 10 months after the reporting taxpayer’s tax year-end).

Digital subscriptions tax credit

Starting in 2020, individuals can claim a new non-refundable tax credit of up to $500 for qualified digital subscriptions.

Journalism – qualified donee status

Also in 2020, individuals can claim the donation tax credit for donations to qualifying journalism organizations.

Finally, as you prepare your practice plan for the upcoming personal tax season, now is also a good time to review how your practice minimizes tax risk. Check the CPA Canada Tax Risk Management Guide for comprehensive advice on how to safeguard your practice.