New things to know for tax-filing and benefit returns for 2024
Published April 13, 2024 at 10:32 am
Thirty-two million Canadians opted for electronic filing during the 2023 tax season, with the Canada Revenue Agency (CRA) processing over 18 million refunds averaging $2,262 each.
To address the often time-consuming and complex nature of tax filing, the CRA has introduced key updates to streamline the process and ensure applicants receive the benefits and credits they may be entitled to.
New services offered by CRA
The CRA has introduced a new fully digital application process for the Disability Tax Credit (DTC), making it quicker and simpler for individuals with disabilities and their medical practitioners.
Now, applicants can complete Part A of the form online or by phone, eliminating the need to print and fill out the form by hand. The form is also prepopulated with existing CRA information. Once completed, applicants receive a reference number for their medical practitioner to complete Part B.
The CRA has improved the T1 notice of assessment for clarity and understanding. An updated RRSP table has also been released.
Due to cheque notice production changes, if you’re expecting a refund and not signed up for direct deposit, you’ll receive a paper notice and cheque separately.
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Individuals are encouraged to enroll in direct deposit to avoid waiting for a mailed cheque.
Changes to income tax and benefit returns
Slimmer Tax Package: The CRA is cutting down on paper by removing detailed instructions, saving about 20% of package content.
Advanced Benefit Payments: Individuals who received the Canada Workers Benefit last year will now receive advance payments automatically without needing to apply.
More Deductions for Tools: Tradespeople can now deduct up to $1,000 for eligible tools, doubling the previous amount.
COVID-19 Benefit Repayments: Repayments of federal, provincial, and territorial COVID-19 benefits made in 2023 can be deducted on line 23200 of your 2023 tax return.
First Home Savings Account: The First Home Savings Account (FHSA) will help eligible individuals save for the purchase or construction of a qualifying home. Contributions to an FHSA are generally deductible, and withdrawals for buying or building a qualifying home are tax-free. Similar to the RRSP, notices of assessment will include a table detailing FHSA balances where applicable.
Home Renovation Tax Credit: The new Multigenerational Home Renovation Tax Credit (MHRTC) offers a refundable tax credit for eligible individuals. It allows them to claim up to $50,000 in certain renovation costs for creating a secondary unit within an eligible dwelling. This enables a qualifying individual — either a senior or an adult eligible for the disability tax credit — to live with a qualifying relative. Each eligible renovation can earn a maximum credit of $7,500 per claim.
Home Office Expenses: The temporary flat rate method for claiming home office expenses is unavailable in 2023. Eligible employees wishing to claim these expenses must now use the detailed method and obtain a Form T2200, Declaration of Conditions of Employment, and have their employer sign it.
Property Flipping Rule: As of January 1, 2023, profits from the sale of a housing unit in Canada, or a right to one, that was held for less than 365 days will be considered business income, not capital gains. Exceptions are made if the property was inventory or the sale was driven by certain life events.
Fuel Charge Proceeds to Farmers Credit: Self-employed farmers and members of partnerships operating farming businesses with permanent establishments in certain provinces—Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, or Saskatchewan—can claim a tax credit for returned fuel charge proceeds.
The CRA encourages applicants to register for My Account, granting them full access to convenient online tax management.
Individuals can update personal details like their address, marital status, and phone number without contacting the CRA.
Online applications offer speed and security when filing taxes. The CRA provides a list of user-friendly NETFILE-certified tax software, some of which are free.
With My Account access and filing through NETFILE-certified software, individuals can benefit from features like Auto-fill My Return, which automatically populates parts of the tax return with CRA-held information from the past seven years.
Additionally, Express Notice of Assessment (NOA) allows individuals to promptly view their return in their certified tax software and My Account after the CRA processes it.
Combining online filing with direct deposit could see individuals receiving any owed refunds in as little as eight business days. Paper returns, on the other hand, are slower, with processing times potentially extending to eight weeks.
Here are some key dates for filing your 2023 tax return:
- Feb. 19, 2024: Start filing online or receive paper tax packages.
- April 30, 2024: Deadline for most Canadians to file and pay taxes owed.
- June 15, 2024: Deadline for self-employed individuals to file, with payment due by April 30, to avoid interest.
For more information on benefits and filing tax returns, you can visit the CRA here.
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