Offering and expanding automatic tax filing services

Many lower-income and vulnerable Canadians are missing out on valuable benefit and credit payments because they are not filing their income tax and benefit returns. Benefit and credit payments, such as the Canada child benefit and the goods and services tax/harmonized sales tax credit, help make life more affordable. Filing a tax return also confirms an individual’s eligibility for programs such as the Canadian Dental Care Plan.

In order to receive, or continue to receive, benefit and credit payments, individuals have to update their information with the Canada Revenue Agency (CRA) each year by doing their taxes. The CRA has introduced a number of initiatives to make it easier to file an income tax and benefit return. 

The announcement in Budget 2023 and Budget 2024 further expands these efforts by:

• increasing the number of eligible Canadians for SimpleFile by Phone (previously File My Return) to 2 million by 2025
• piloting a new automatic filing service that will help lower-income and vulnerable Canadians who currently do not file their taxes receive the benefit and credit payments to which they are entitled

Current automatic tax filing services offered by the CRA

The CRA offers several automatic tax filing services to reduce filing barriers for lower-income individuals, including:

• SimpleFile by Phone – this invitation-based service is the closest the CRA currently has to automatic tax filing. It allows lower-income individuals with a simple tax situation to auto-file an income tax and benefit return by answering a series of short questions over the phone. There are no calculations to do or forms to fill out. With a personal identification number, individuals can get an estimate of their net income, taxable income, and a refund amount (if eligible) at the end of the phone call. SimpleFile by Phone is a free, easy and secure automated service that has existed since 2018 and was used over 52,000 times in 2023. 
• Simple File: Let us help you get your benefits! – a paper-based simplified filing option available to all Indigenous communities.
• Auto-fill my return service (AFR) – a secure digital service that allows individuals and authorized representatives using certified software, to automatically fill in parts of an income tax and benefit return with information that the CRA has available at the time of the request.

Automatic tax filing services in the Canadian context

The CRA has had success with its current automatic tax filing services, but more can be done to reduce burden and remove barriers to tax filing.

It is important to recognize two key considerations when looking to enhance automatic tax filing in Canada:

• taxpayer consent is mandatory, which means the CRA must contact individuals before producing a notice of assessment
• the CRA must collect certain information to determine eligibility and payment amounts, such as their family situation and composition, rental payments, property tax paid, and self-employed income

Automatic tax filing targets and deliverables

For the 2024 individual tax filing season

• SimpleFile by Phone: The number of invitations increased from 700,000 in 2023 to more than 1.5 million lower-income Canadians this year. These invitations were issued in February 2024

For the summer of 2024

• SimpleFile services (phone, digital, and paper): The CRA will pilot automatic filing services targeting lower-income individuals who have never filed an income tax and benefit return or who have a gap in their filing history; therefore, they are not receiving the benefit and credit payments they could be entitled to. Invitations will be sent to Canadians starting in the summer of 2024

For the 2025 individual tax filing season

• SimpleFile by Phone: The number of invitations is expected to increase to 2 million
• the pilot is expected to continue into 2025 and beyond

Eligible individuals

Individuals eligible for the SimpleFile services must:

• have an income under a certain threshold based on factors that include age, province of residence, and disability status
• have income exclusively from the following sources:
  • Benefits
    • Old Age Security – T4A(OAS)
    • Guaranteed Income Supplement / Net federal supplements – T4A(OAS)
    • Canada or Quebec Pension Plan benefits (including disability benefits) – T4A(P)
  • Employment and related income supports
    • Employment income – T4
    • Employment Insurance Benefits – T4E
    • Workers’ compensation benefits – T5007
    • Social assistance payments – T5007
    • Canada Emergency Benefits – T4A
  • Investment income
    • Some Interest Income – T5 (box 13)
• Eligible individuals do not need to have income to use the SimpleFile by Phone service, but they must have a recent filing history.
• Eligible individuals for the SimpleFile by Paper service can report to have tax exempt income. 

The CRA assesses eligibility for SimpleFile services using information on file for the individual (for example, using information provided when individuals filed their income tax and benefit return the year before). If, however, an invited individual attempts to use the service and their personal situation has changed, they may no longer be able to complete their return this way.

Contacting the CRA

If you have comments about the CRA’s automatic tax filing targets and deliverables for 2024 and 2025, contact the CRA at filingsupport-soutientalaproduction@cra-arc.gc.ca.