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Tax

Know the details of CRA's 2024 digital improvements

As the Canada Revenue Agency (CRA) works to create a more digital tax system, practitioners will see new and enhanced services in My Account and My Business Account, a new digital application process for the Disability Tax Credit, and more. Find out what’s coming up for you and your clients.

The CRA has several projects in its pipeline to enhance and extend its digital services for taxpayers and practitioners. The organization often seeks practical input from CPA Canada and our members on the best way to design and implement new digital features.

As part of these ongoing consultations, the CRA-CPA Canada Technology Working Group regularly brings together senior CRA officials, tax preparers, tax software developers and other stakeholders to share information and brainstorm ideas. At the group’s latest virtual meeting in May, the CRA previewed several service improvements now in place or in the works for the coming months.

In this blog, we summarize updates on the CRA’s digital services in the following areas:

  • Service consultation campaign
  • Digital services update
  • Mandatory electronic filing
  • Disability tax credit
  • Digital correspondence — My Business Account
  • Cancelling authorizations — EFILE update.

SERVICE CONSULTATION CAMPAIGN

CRA announced the launch of a 2024-2025 Service Consultation Campaign starting in summer 2024. Objectives for this campaign are to inform Canadians on advancements made to date on previously identified service challenges and gain insight on existing gaps and other challenges faced when interacting with the CRA. 

There is an opportunity for CPA Canada members who act as tax intermediaries for individuals and businesses to partner with the CRA for phase 3 of this campaign, scheduled for Fall 2024.

DIGITAL SERVICES UPDATES  

The CRA provided an update on recent and upcoming enhancements to the CRA’s digital services as follows:

Connect with us in My Account — A new link called “Connect with us” was added to the “Correspondence” side bar in My Account taking users to a page with options to contact the CRA or to get help on specific topics which can be found outside of the portal. A similar update was added to My Business Account in May 2024.

First Home Savings Account in My Account — The 2022 federal budget created the Tax-Free First Home Savings Account (FHSA), a new registered account to help individuals save for purchasing their first home. In My Account, individuals can view FHSA information such as:

  • FHSA transaction details and summaries for all years
  • FHSA deduction limit
  • Accepted and rejected FHSA information records from financial institutions
  • FHSA return based on CRA assessed and reassessed results
  • FHSA deduction limit statement: to have annual and cumulative FHSA allowable deduction amounts and taxable income on FHSA withdrawals displayed.

Improvements in My Trust Account — Improvements and new services were added to My Trust Account, giving users more options to manage their trust account online. New features include:

  • View returns
  • Mail
  • Email notifications
  • Account balance information
  • Online payment options.

Progress tracker — My Account and My Business Account — The CRA’s Progress Tracker service provides status updates on files and enquiries submitted to the CRA, as well as target completion dates. Enhancements made in early 2024 include:

  • My Business Account users and their authorized representatives can now track the progress of GST/HST returns and GST/HST reassessments.
  • The Validations and Pre-Match programs were incorporated into the T1 Initial Assessment Progress Tracker in My Account.

Single Sign-in for all CRA portals — Expected in January 2025, the CRA is developing a means where users will only be required to sign in once to access any of their CRA portals. Users will be able to access:

  • My Account
  • My Business Account
  • Represent a Client
  • My Trust Account 
  • And any new account types as applicable

Users will simply sign in and access any account available to them.

Enhancing the security of CRA’s digital services

Authentication updates — As part of the CRA’s continuing efforts to enhance the security of its digital services, the following updates were added:

  • Reducing maximum number of active credentials — New users are now able to register for one credential only (CRA user ID and password or Sign-In Partner). In addition to this one credential, they are able to enroll with a provincial partner (BC Services Card or Alberta.ca Account) for My Account only.
  • New authentication requirement for registration — In addition to the existing shared confidential information that taxpayers must enter to validate their identity during registration, they are now asked to provide their gross income (line 15000) that has been calculated and reported on their most recent tax return.

New email notifications for all portals — The following new email notifications were implemented:

  • My Account users can receive an optional email notification when their reply to a T1 Initial assessment is received.
  • Users of the CRA's sign-in services will now receive an email notification letting them know they have successfully enrolled in Multi-factor authentication (MFA) with either the telephone option, passcode grid option, or authenticator application option.
  • Users of the CRA's sign-in services will now receive an email notification when they have been locked out of their account.

Time-based one-time passcode (TOTP) for all portals — The CRA now offers a new option for MFA that uses third-party authenticator apps. These apps can generate a TOTP that the user can access quickly and easily to sign in to the CRA sign-in services.

MFA timed lockouts for all portals — Previously, if the user was locked out of the system after multiple failed attempts of MFA, they needed to contact the CRA to have an agent reset the account to let them try again. The CRA has implemented the following changes as of February 2024:

  • The lockout is now temporary (30 minutes)
  • After a combined total of three temporary lockouts, the user will need to contact the CRA 
  • When a successful entry is made on any MFA code entry page, all the MFA counters will be reset to 0
  • When an account is locked out, the user will receive an email notification.

Document Verification Service (DVS) for all portals — The CRA has introduced a new digital identity validation option when registering for the CRA sign-in services. The service allows users to securely register and get immediate and full access to their online accounts. 

The option requires the user to be 16 years of age or older and have a camera-enabled mobile device to take a picture of their government-issued photo identification and of themselves to verify their identity. Once an individual’s identity has been validated, they will immediately have full access to the CRA sign-in services.

Centralized communication centre — The CRA is working on a centralized communication centre. The CRA performed user testing and public opinion research to ensure the new page functions well.

The page will have a new look and feel – similar to Outlook or Gmail. There will be improved sorting and filtering and email count numbers; users will easily be able to find their unread mail. 
Final release of this new page is expected in October 2024. 

The new communication centre will include "action may be required”  buttons in some correspondence that require an action by the user. These action buttons will include links to our payment services to ease the burden on the user on finding the proper payment allocation, which was confusing for users in the past. For submitting documents, it will also be clearer what users need to do. The page will have a reply feature so users can attach documents or make payments.

As mentioned above, a new “Connect with us” page will include contact info for CRA with links to different communication routes. Chat features are coming.

MANDATORY ELECTRONIC FILING 

Changes to mandatory electronic filing for GST/HST returns — Changes to electronic filing requirements for GST/HST registrants became effective in January 2024. Previously, mandatory electronic filing was based on a sales threshold. The mandatory electronic filing threshold for GST/HST returns has been eliminated for reporting periods that begin on or after January 1, 2024. Most GST/HST registrants, other than charities or selected listed financial institutions, must now file electronically. For those who file annually, their first electronic return will be due in 2025. To help GST/HST registrants that file monthly or quarterly and that were not previously required to file electronically, the CRA waived the mandatory electronic filing penalty for GST/HST returns with filing periods beginning on or after January 1, 2024 and before April 1, 2024.

The CRA sent a letter to paper filers, advising them that the mandatory electronic filing threshold has been removed and that they are now obligated to file electronically. An access code is required, which is provided with their filing packages. The change does not affect a large population, as 96% of returns are already filed electronically. 

The CRA has received feedback that not everyone has access to a computer or reliable  Internet — GST/HST TELEFILE is available for them. All that is required is a touch-tone telephone and the access code provided with their filing packages. Computer or Internet access is not needed.

The CRA has an exemption process if people really can’t file electronically. A written request, including the reasons why they cannot comply, must be sent to the Atlantic Tax Centre. These requests will be considered on a case-by-case basis. If an exemption is granted, the CRA will note that GST/HST TELEFILE is a valid electronic filing option which does not require computer or Internet access so that a registrant may consider using this service in the future. The CRA has received about 400 requests and questions. They expect 3,000-5,000 requests as the change takes effect.

Mandatory electronic income tax filing for corporations — Amendments in April 2023 to the Income Tax Regulations (in Bill C-47) removed the exception to mandatory electronic filing for corporations with gross revenue of $1 million or less, for tax years beginning after December 31, 2023. The exception still applies to:

  • Insurance corporations
  • Non-resident corporations
  • Corporations reporting in functional currency
  • Corporations exempt from tax under section 149 of the Income Tax Act.

The CRA said the penalty applies for tax years that begin after December 31, 2023. Information related to this change was published in the T2 guide. 

DISABILITY TAX CREDIT (DTC)

New digital application process — A digital form can now be used to apply online:

  • Step 1 – The applicant fills out Part A of Form T2201online through My Account. They will receive a reference number once it is submitted. 
  • Step 2 – The applicant gives the reference number to the medical practitioner. They will use it to complete and submit Part B of the digital form online.

Note: The applicant may be the person with the disability, or their legal representative. 

A video on Part A of the DTC digital application form is available here.

After an application is submitted, the CRA will review the application; progress of the application can be tracked in My Account and Represent a Client. 

DIGITAL CORRESPONDENCE — MY BUSINESS ACCOUNT

Brief background — The CRA provided background on changes to its digital correspondence policy as follows:

  • Most correspondence that is currently mailed to businesses is also available for viewing in My Business Account.
  • In May 2025, the CRA will switch the default delivery method to digital for existing businesses that have access to My Business Account and will no longer mail this correspondence.
  • Any new businesses registering for a BN after May 2025 will be automatically set up for digital delivery method.
  • It’s important for businesses to sign up for email notifications.
  • Existing businesses that are not currently registered for My Business Account through an owner or authorized representative will not be impacted.
  • Business owners that would like to receive their correspondence by mail will have the opportunity to formally request it.
  • The CRA said non-resident businesses not currently registered for My Business Account through an authorized representative will not be switched to digital; they will continue to receive paper mail.

Requests for paper mail — Business owners who wish to receive correspondence by paper mail will need to make their request 30 days in advance. The CRA also noted that:

  • Owners will need to ensure their mailing address is up-to-date and will need to renew the request in two years 
  • A service will be available in My Business Account for business owners, legal representatives, and delegated authorities to request paper mail
  • For business owners without access or who cannot use My Business Account, a paper form is being developed.

CANCELLING AUTHORIZATIONS — EFILE UPDATE 

Authorize or Cancel a representative service — This service allows EFILERS to submit third-party authorization and cancellation requests directly to the CRA using an EFILE certified software.

  • The Cancel a representative service is being updated to allow EFILERS to submit requests to cancel only their own authorizations and not other representatives’ authorizations.
  • The change will provide additional security and ensure representatives can only make changes based on the level of authorization their client consented to.
  • Implementation is projected to be October 2024.

Watch for further developments

The CRA is working on numerous technology-related initiatives to improve its services to taxpayers. We will continue to provide the CRA with our feedback and keep you informed as more changes are introduced.