Mandatory electronic filing for tax preparers
As of January 1, 2013, tax preparers who accept payment to prepare more than 10 tax returns in a calendar year are required to electronically file those tax returns. Mandatory electronic filing (MEF) applies to the filing of both T1 General income tax and benefit returns and T2 Corporation income tax returns for the 2012 and later tax years.
- Q1. I am a tax preparer; how does this affect me?
- Q2. Are there exceptions to the MEF legislation?
- Q3. If I use the ReFILE service to file my client’s amended T1 return, does that count towards the number of returns I prepare?
- Q4. I use in-house software to prepare returns for my clients, but I don’t use EFILE. What do I do?
- Q5. Are there penalties if I do not comply with the MEF legislation?
- Q6. Where can I get help to file returns electronically?
Q1. I am a tax preparer; how does this affect me?
A1. If you are an individual, a corporation or a partnership, and you accept payment to prepare more than 10 T1 General income tax and benefit returns or more than 10 T2 Corporation income tax returns per year, you must file those returns electronically. An employee who prepares tax returns as part of their work duties is not a tax preparer.
Q2. Are there exceptions to the MEF legislation?
A2.The exceptions to the legislation, for which you cannot electronically file a return, include:
- T1 return - exclusions;
- T2 return - restrictions;
- If you are a tax preparer that has applied to use EFILE but was not accepted; and
- If you are a tax preparer that has had their EFILE privileges suspended or revoked.
If you prepare T2 returns that are not restricted but you cannot use EFILE for the reasons stated above, you must use one of the other methods available to electronically submit T2 returns. For more information on how to file Corporation returns electronically, go to Corporation Internet Filing.
Q3. If I use the ReFILE service to file my client’s amended T1 return, does that count towards the number of returns I prepare?
A3. ReFILE is a new digital service that must be used with EFILE certified software. If you send an amended T1 return by paper or if the return is amended in the EFILE software and the printed version is sent to the Canada Revenue Agency (CRA), it will be counted as a paper-filed return when assessing non-compliance with the MEF legislation.
Q4. I use in-house software to prepare returns for my clients, but I don’t use EFILE. What do I do?
A4. Your software package will need to be certified by the CRA before you can use it to file electronically. To find out more about certification:
- For T1 General returns: EFILE – Certified software
- For T2 Corporation returns: Corporation Internet Filing
If you are preparing returns that do not have to be electronically filed (for example: you do not accept payment for the preparation of those returns), you can continue to use your in-house software.
Q5. Are there penalties if I do not comply with the MEF legislation?
A5. If you are required to file a return electronically as per the MEF legislation but do not comply, you may be charged a penalty of $25 for each T1 General return that is paper-filed and $100 for each T2 Corporation return that is paper-filed.
Q6. Where can I get help to file returns electronically?
A6. For T1 General returns, contact your designated EFILE Helpdesk.
For T2 Corporation returns, contact the Corporation Internet Filing Helpdesk.
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