Preparing income tax returns: before, during and after

Important note

An individual's information must be kept secure and confidential at all times.

  • Do not use or disclose the individual's information for any purpose other than to complete their return
  • Always be sure to securely store the individual's information in a locked drawer or cabinet. Never leave an individual's information unattended
  • In the event of any type of security breach, such as lost, stolen or compromised data, tell your community organization and your Canada Revenue Agency (CRA) coordinator immediately

Before preparing income tax returns

There are many steps to consider when completing tax returns. To ensure that you have everything you need before preparing income tax returns, we recommend you follow these guidelines: 



Registration reminders

Before you prepare income tax returns, you will first need to affiliate yourself with a CVITP organization and register:

  • as a CVITP volunteer (annual registration)
  • for EFILE, to allow you to electronically file tax returns (initial registration and annual renewal)
  • for a RepID (a one-time registration and only if you will be using Auto-fill my return)

You will also need to provide a valid police records check (PRC) to your organization, if you plan to use Auto-fill my return.

Note

If you do not plan on EFILING but will have access to taxpayer information, you will also need a PRC.

For more information, please refer to Register to volunteer.

Supplies and logistics

Check with the organization to confirm the availability of supplies and the logistics of the clinic.

Recommended supplies:

  • Desktop or laptop computer
  • Forms TIS60 (mandatory) and Authorization request – signature page (if using Auto-fill my return)
  • UFile activation key
  • EFILE number and password
  • Internet connection

Useful supplies:

  • Printer and USB flash drive
  • Pens, pencils, paper, notepad, post-it notes, calculator, stapler, and staple remover
  • Forms, such as the T1 Adjustment request (T1-ADJ), Address change request (RC325), Disability Tax Credit Certificate (T2201)
  • Federal Income Tax and Benefit Guide, pre-addressed tax centre envelopes, and Direct deposit enrollment forms

Note

Most of the forms that are commonly used by CVITP volunteers can be accessed and printed directly from Resources, under the Useful forms tab. You can also print or order forms through the Order forms and publications web page, by calling the dedicated help line for volunteers, or by contacting your CRA coordinator.

Logistics:

  • Time of arrival (before the start of your shift)
  • Duration of appointments (how much time is scheduled for each appointment)

Note

To ensure that you have sufficient time to set up your workstation, we recommend arriving at least 30 minutes before the start of your shift. Please check with your host organization to see if they can accommodate extra time for you to prepare.

UFile setup

A new version of UFile CVITP software is released each year. If you intend to have the software on your personal laptop for use at CVITP clinics, your organization or your CRA coordinator will email you the link required to download, along with an activation key. In instances where the organization supplies the computer/laptop, they will likely install and activate the software for you.

Prior year versions of UFile CVITP can also be downloaded and the applicable activation keys can be obtained. If you require UFile CVITP for a previous tax year, contact your organization or a CRA coordinator.

Always download the updates to UFile to ensure you are using the most up-to-date version available. We recommend that you set your tax software to Check for updates automatically.

Note

To ensure taxpayer information is safeguarded and to avoid systems issues with UFile CVITP, PC's or laptops must be upgraded to the Windows 10 OS. Macintosh (Apple) operating systems are not compatible with UFile CVITP software. For more information about system requirements, see UFile CVITP software overview.

Text version

UFile 2018 start page

Update your copy of UFile 2018 pop-up window is open

EFILE Netfile setup in settings

If you are working on a computer that is also used by other volunteers with the same community organization, go to the EFILE-NetFile setup to ensure that your EFILE number and password are entered correctly before completing returns.

Note

New this year, your organization will receive a CVITP Organization Identification Number (COIN) in their registration approval letter.

The COIN is a unique and permanent, eight-digit identification number. It will remain unchanged for your organization every year, even if your organization takes a break from participating in the CVITP.

Your organization is responsible for sharing the COIN with volunteers and ensuring it is entered into the appropriate field of UFile CVITP.

  • If a COIN has not been entered, the CVITP-provided tax preparation software will prompt the user to enter a COIN before transmission.
  • If you do not have a COIN, you may select No and proceed as normal.
  • You will still be able to prepare and transmit a tax return if you do not include a COIN. However, the tax return will not be added to your organization’s total number of returns filed if the organization applies for the CVITP Grant.

For more information on the COIN, see Free tax clinic host’s identification number.

For information on how to enter your EFILE number, password and COIN information, see EFILE-Netfile setup.

Preparing income tax returns

Establishing a consistent process can help you prepare returns more efficiently.

The following section will provide you with an overview of the steps required when completing a tax return, as well as suggestions and tips that may help you fine‑tune your own working method.



Screening to confirm eligibility

The screening of taxpayer information to ensure that they meet the eligibility criteria for the CVITP may be done by a volunteer whose specific role is screening, or by a volunteer tax preparer. If you are responsible for screening taxpayer information, see eligibility criteria.

Note

Some individuals may be eligible to file their income tax and benefit return using File my Return, by answering a series of short questions through an automated phone service. The service is only available to eligible individuals who are sent an invitation letter in the mail, usually by February. The invitation letter will give them all the information they will need to use the automated service.

If during the screening process an individual confirms they received a File my Return invitation letter, volunteers should verify if they contacted the CRA.

  • If they have not yet contacted the CRA, volunteers may:
    • suggest they do so; or
    • offer to complete their tax return for them in person or virtually by using the provided tax preparation software.
  • If the individual contacted the CRA to use File my Return:
  • No further action is required on the volunteer’s behalf.

For more information on this automated service, see File my Return.

Validating the individual's identification

Reminder for CVITP Virtual clinics

Temporary measures are available to help you with this step.

Please refer to the Important note: CVITP Virtual clinics – Guidelines and resources for volunteers.

You must get proof of identity from the individual before you complete their return.

Proof of identity should:

  • be valid
  • be government issued
  • include a photo


Examples of valid identification include:

  • provincial or territorial (or equivalent abroad) driver's license or photo identification
  • Canadian or foreign passport
  • Indian status and identification card
  • military or other government employee identification card

Important note

A power of attorney (POA) is a legal document giving one person the power to act on behalf of another person. POA can be granted to act on behalf of an individual specifically for property and finances, specifically for health or personal care decisions, or for both. It is important to ensure that the individual has the correct authority before proceeding. If an individual indicates that they have POA for someone, but they do not have the legal documentation on hand, contact the dedicated help line for volunteers. The individual will need to speak with a telephone agent and answer a number of confidentiality questions. If confidentiality screening is met, the agent will be able to confirm if the CRA has a record of the POA on file. Click here for more information on a power of attorney.

Signing the authorization forms (Section I of form TIS60, Authorization request – signature page)

Reminder for CVITP Virtual clinics

Temporary measures are available to help you with this step.

Please refer to the Important note: CVITP Virtual clinics – Guidelines and resources for volunteers.

In order to be authorized to complete an individual’s tax return (paper or electronic) as a CVITP volunteer, you must have the individual sign form TIS60, Community Volunteer Income Tax Program – Taxpayer Authorization:

  • see image below, followed by Step 1 of 2 – Completing form TIS60

If you will be using Auto-fill my return to complete the return, you must also have the individual sign an Authorization request – signature page.

Note

If you are using the Auto-fill my return service, be sure to read the script before having the individual sign the Authorization request – signature page. You can also refer to the Useful forms tab under Resources for a copy of the script.

To learn how to send the Authorization request – signature page, see the screen-by screen instructions under Using Auto-fill my return service for 2018, 2019 and 2020 returns.

TIS60, Community Volunteer Income Tax Program – Taxpayer Authorization

Section I

Text version

Community Volunteer Income Tax Program – Taxpayer Authorization form

Protected B

Section I – Authorization

Part A – Identification section is blank

Part B – Disclaimer section is blank

Step 1 of 2 - Completing form TIS60

Before you start preparing the return, Section I – Authorization needs to be completed and signed. By signing the TIS60, the taxpayer consents to have their tax return prepared by a CVITP volunteer. A TIS60 must be signed for each return being completed by a volunteer.

  • Part A – Identification identifies the taxpayer

  • Part B – Disclaimer, the taxpayer acknowledges with their signature that their return is being prepared by a volunteer. The taxpayer whose information is in Part A must sign Part B. Part B can be signed by a legal representative, on the individual’s behalf, provided they have the authorization to do so. More information on this can be found in the Important note for POA.

Note

Section II of form TIS60 is only applicable if the return will be electronically filed (EFILED), and instructions for completing this section (Step 2 of 2, Completing form TIS60) are provided further on in this topic.

Note

UFile CVITP will automatically generate form TIS60. The form is also available under Resources, Useful forms tab.

If you do not have the ability to print forms, hard copies of the TIS60 can be obtained by contacting your CRA coordinator or by calling the dedicated help line for volunteers.

Verifying the information on the slips and receipts

Ensure the information on the slips is correct (for example, name, SIN, and issuer).

Confirm that the individual has all required information slips and receipts.

Information slips and receipts may include:

  • T4, T5, T5007, T4A, and T4(OAS)

  • receipts for child care, medical expenses, and RRSP contributions

  • charitable donation receipts, including those made in the current year and any donations made and not claimed within the last 5 years

  • tuition receipts, such as T2202, TL11A, or TL11B

Note

If an individual is missing a slip, there are several ways for you to try to obtain the information. You can use Auto-fill my return, call the dedicated help line for volunteers at 1-866-398-3488, or the individual can contact their employer or payer. If a slip is not available, you can use pay stubs or statements to estimate the missing income and deductions.

If you call the dedicated help line for volunteers to obtain an individual’s information, they must be present. The individual will need to speak with a telephone agent to answer confidentiality questions. If confidentiality is met, the individual can provide the agent with verbal authorization for you to speak on their behalf. Verbal authorization is only valid for the duration of that telephone call.

Important note

If you know or suspect that the information an individual provides to you is not accurate or contains omissions, withdraw your services.

Organizing the slips and receipts

It is good practice to organize the slips as they apply to the different sections of the Income Tax and Benefit Return, such as income and deductions and credits. Next, sort the documents into similar types (for example, keep all T4 slips together). This follows the structure of UFile software and can help make entering the slips easier.

Questions to ask the individual

Although your community organization may have already confirmed this information with the individual when the appointment was booked, or during the screening process, it is recommended that you ask the following questions:

  • How many tax years do you need to complete? For what years?
  • Will we be preparing returns for other family members, such as spouse or common law partner?
  • Do you have children or other dependants? How many?
  • Have you, your spouse or dependant(s)(if applicable) been approved for the T2201, Disability Tax Credit Certificate?
  • How many places did you work at this year?
  • In the last year, have there been any changes to your marital status, address, or dependants (for example, custody changes)?
  • Did you receive or earn any tips?

Keep in mind, this list of questions is not exhaustive!

Note

Income, such as tips, gratuities, or occasional earnings may or may not be shown on a T4 slip. If they are not included, it is the individual’s responsibility to provide you with the amounts.

Entering the information in UFile

Click Start on a new tax file and enter all required information into the different fields in the Interview tab. Read each question carefully to ensure the correct information is provided.

Note

We strongly recommend that you read through the Frequent client scenarios. These examples will help you to become more familiar with the situations that are most commonly encountered when preparing tax returns at free tax clinics. Each scenario contains screen by screen instructions to help guide you through the tax software. Depending on your individual needs and the clientele assisted by your organization, it may be beneficial for you to complete more than one scenario.

It is also recommended that you familiarize yourself with the provincial and territorial benefits and credits for your region.

Identification

Enter the individual’s identification information, such as name, social insurance number, date of birth, province of residence, and marital status.

Current address

Enter the individual’s current mailing address. If the individual moved since they last filed a tax return and did not inform the CRA , providing the current mailing address here will ensure that their records are updated.

CRA questions

Complete all fields found on the Canada Revenue Agency (CRA) questions page.

If the individual has never filed a tax return and you will be completing multiple years for them, only select Yes for the question Are you filing an income tax return with the CRA for the very first time? on the oldest return you are preparing. For example, if the individual has to file 2018, 2019, and 2020, make sure to only answer Yes in the 2018 return. For subsequent years after 2018, you would select No.

If the individual indicates that they have sold their principal residence in the tax year, see Individuals reporting a sale of a principal residence.

Under the Elections Canada section, if you answer Yes to the question Do you have Canadian citizenship?, an additional question will appear, asking if the individual authorizes the CRA to share their name, address, date of birth, and citizenship information with Elections Canada. Answering Yes to this question will update the National Register of Electors (the Register).

Additional questions may also be generated on the Canada Revenue Agency (CRA) questions page, as well as in the left side menu, based on the individual’s province of residence on December 31 of the tax year. For more information, see CRA questions.

When selecting a response to the question I accept the terms and conditions and I choose to receive email notifications from the CRA, we recommend that you always answer No.

Note

Selecting Yes will authorize the CRA to provide all correspondence to the individual electronically through My Account, including their notice of assessment, and paper copies will no longer be issued.

Electronic filing – EFILE

The first question found on this page is Will you be using CRA-Auto-fill my return service for this taxpayer? If you answer Yes, refer to the screen-by-screen instructions under Using Auto-fill my return service for 2018, 2019 and 2020 returns. Once you have completed the AFR process you will proceed with the steps provided below.

Note

Using the Auto-fill my return service is optional. You can still electronically file returns without using this service. The CRA does, however, encourage the use of AFR as it helps to ensure fewer errors and more accurate returns.

As a CVITP volunteer, you can electronically transmit (EFILE) tax returns to the CRA for the 2017, 2018, 2019, and 2020 tax year(s). If you are completing a return for any of these years, select Yes to the question Will you be using EFILE to submit this return to the CRA?

In order to complete prior year returns with UFile CVITP software, you must install the applicable version for each year you wish to prepare. If you will be preparing prior year tax returns, select Yes in response to the question Will you be using EFILE to submit a prior year federal return, today or within the next two days?

Although you cannot transmit returns electronically prior to 2017, you can still complete and print the returns using UFile CVITP. You can file tax returns as far back as 10 calendar years. For information on how to print returns, see Providing the tax return and forms.

Note

When preparing previous year returns, it is recommended that you begin with the oldest year and proceed in order.

Interview setup

In this section, you must indicate any tax situations that apply to the individual, by checking the applicable boxes. For more information, see Interview setup.

Review

Once all of the individual’s information has been entered and you reach the Review tab, make sure:

  • all personal information (for example, name and address) has been entered correctly and is up to date
  • if applicable, spouse and dependant information has been accurately recorded
  • all information slips and receipts have been entered correctly
  • all applicable provincial credits and benefits have been claimed
  • to review any UFile warnings and error messages
  • to inform the individual if there is an amount owing, and refer them to Payment options for individuals and businesses

Note

If applicable, make sure that a profile has been added for each of the individual’s eligible dependants, as it could affect the calculation of their benefit and credit entitlements. For more information, see Individuals with a dependant.

Completing Section II of form TIS60

Reminder for CVITP Virtual clinics

Temporary measures are available to help you with this step.

Please refer to the Important note: CVITP Virtual clinics – Guidelines and resources for volunteers.

TIS60, Community Volunteer Income Tax Program – Taxpayer Authorization

Section II

Text version

TIS60, Community Volunteer Income Tax Program – Taxpayer Authorization form

Protected B

Section II – Electronic filing (EFILE)

Part C – Declaration section is blank

Part D – Declaration and authorization section is blank

Part E – Electronic filer identification section is blank

Part F – Document control number section is blank

Step 2 of 2 - Completing form TIS60

If the return is being electronically filed, both the volunteer and the individual must complete Section II.

  • Part C – Declaration, the volunteer must record the total and taxable income amounts, total federal non-refundable tax credits, and if applicable, the refund or balance owing from the completed tax return
  • Part D – Declaration and authorization, by signing, the individual acknowledges that they have reviewed the information from Part A (Identification), and Part C (Declaration) and that the information provided is correct. The individual’s signature also authorizes the volunteer to electronically file the tax return. Part D can be signed by a legal representative, on the individual’s behalf, provided they have the authorization to do so. More information on this can be found in the Important note for POA
  • Part E – Electronic filer identification, the volunteer must record their name and EFILE number
  • Part F – a Document control number, is generated upon EFILE transmission and must be recorded by the volunteer

Note

The Document control number (DCN) is a number that is assigned to the tax return at the time of transmission and acts as an identifier for that return while it is being processed by the CRA. It can also be assigned to a tax return the first time it is saved. It is important to remember that a DCN does not mean that the return has been successfully transmitted to the CRA. For more information on Accepted EFILE transmissions, see EFILING the tax return.

Remember

  • Always give the completed TIS60 to the individual for their records

  • Do not tell the individual to send it to the CRA

  • Never keep a copy of the TIS60 or send it to a CRA coordinator

Ensure that TIS60 has been signed by the individual and, if you are preparing returns for a family, ensure that each family member you will be filing a tax return for has signed their own TIS60.

Providing the tax return and forms

The CRA encourages electronic filing; however, it also recognizes that you may need to provide specific pages or a copy of the tax return to an individual. You can either save them as a PDF or print them for the individual. See Providing the tax return and forms.

If saving or printing is not an option, you can obtain hard copies of the TIS60 by contacting your CRA coordinator. Your coordinator can also provide you with blank copies of Form T1260, Income Tax and Benefit Return Summary, which is an option that can be used in lieu of a printed T1 summary.

These forms can also be found in Resources, under the Useful forms tab.

Important note

If you print tax returns or other documents containing the individual's information using a shared printer, ensure that you pick them up promptly. Do not leave them on the printer for others to see.

Some printers, scanners, and copiers may retain memory.

  • If you are using a personal printer that retains memory, it is important that you clear the memory regularly 
  • If you are using a shared printer, your organization will ensure that the memory is cleared on a regular basis
Transmitting the return

Each person's return must be transmitted individually, immediately upon completion. For step-by-step instructions on how to transmit the return using UFile CVITP, see EFILING the tax return.

Note

  • Transmission means the tax return has been electronically sent to the CRA
  • Accepted means that the tax return has been successfully received by the CRA

Once the return has been transmitted, verify the status found on the Federal EFILE Report.

For more information on the UFile CVITP, Federal EFILE report, see EFILING the tax return.

Note

The EFILE web service is only available for the transmission of the current tax year and the 3 preceding tax years. If you are completing tax returns for years beyond this period, they will need to be printed. The individual will have to mail them to the applicable tax centre. See Providing the tax return and forms.

Important note

Ideally, returns should be transmitted immediately upon completion. However, there are circumstances when this may not always be possible, such as clinic locations where internet isn’t available. In instances where you are unable to transmit a return immediately, ensure that you:

  • always encrypt returns using the tax software and save the files on a USB flash drive only
  • never save a copy of the individual's return on the hard drive of your computer. See Save a tax return for more instructions on this process in UFile CVITP.
  • delete the saved return no more than 48 hours after the transmission has been accepted by the CRA. To ensure that you are deleting the information properly, refer to the steps provided in Formatting your USB flash drive to erase the data
Verifying EFile transmission errors

If you receive error messages when transmitting the tax return, refer to the RC4018, Electronic Filers Manual, Chapter 2, for more information.

The manual provides explanations of how the error codes are set, what they mean, and how to respond to them.

Ensure that you correct the information as instructed in the manual, before attempting to transmit the return again.

If you cannot find an error code in the RC4018, or need additional help resolving an error code, contact your regional EFILE Helpdesk support. This information can also be found under Resources.

Note

When attempting to re-transmit a return after correcting an error, it is important to ensure that you have received either a green Accepted status, or a red Rejected status in the Federal EFILE Report generated by UFile CVITP before moving on to complete another individual's tax return.

If the Federal EFILE Report status for the re-transmission is:

  • Rejected - print a paper copy of the return for the taxpayer and instruct them to mail it to the CRA for processing. See Find a CRA address to ensure that you provide them with the correct mailing address for their applicable Tax Centre.
Paper returns

Here are a few reminders if you prepare paper returns:

  • Add all box numbers for the same type of income slips and enter the totals on the applicable lines on the paper return. For example, add up the amounts in box 14 for all of an individual's T4 slips and enter the total on line 10100
  • Ensure the individual signs the tax return at the bottom of page 8
  • Enter a 1 in box 48700 at the bottom of page 8 of the tax return to indicate that it was prepared by a volunteer. This field is automatically completed when the return is prepared using UFile CVITP
  • Attach all completed schedules, information slips, required forms, and receipts
  • Instruct the individual to mail their paper return to the applicable tax centre
  • Remind the individual to mail their return by the filing deadline to avoid delays in the processing of their benefit payments and possible late filing penalties

Note

If an individual would like to know when they can reasonably expect to receive their tax assessment you can refer to Service Standards in the CRA for the most up to date timeframes.

After preparing the income tax return

Once the tax return has been prepared and transmitted, completing the following steps will help you ensure that you have successfully EFILED the return and safeguarded taxpayer information.



Ensuring the return was accepted by CRA

Verify that the return was successfully transmitted and accepted. Even if UFile CVITP provides a report showing that the CRA successfully received the return, you must verify that the transmission was accepted.

  • Log in to your EFILE account.
  • Select Accepted transmission(s).
  • Verify that the transmission was accepted by entering the transmission date and selecting Submit. A list of accepted transmissions is displayed, with the most recent at the top.

If the transmission does not appear in the list of accepted transmissions:

  1. Use the Select action button to go back to the main menu of your EFILE account
  2. Select Rejected transmission(s) requiring correction(s)
  3. Enter the transmission date and Submit
  4. Select the file name to see the acknowledgement file
  5. Take note of any error clues or activity codes:
  6. Correct the errors on the return
  7. Retransmit the corrected return
  8. Verify that the retransmitted return was Accepted
Return all documentation to the individual (including the TIS60)

Do not keep any of the individual’s documents (paper or electronic). This includes the completed TIS60 and any calculations or notes you may have made while working.

Clear all user information from UFile

If the computer you are using is also used by other volunteers with your organization, be sure to clear all of your user information at the end of your shift.

  • Go to EFILE-Netfile setup in settings

  • Click Clear Part A to remove information in Part A - Identification Information

  • Click Save

Text version

EFILE-NetFile setup screen

Clear All button is highlighted

Clear Part A button is highlighted

Save button is highlighted

When you select Clear Part A, information about the business/organization will still remain in Part B. If you need to delete all information, including the organization, click Clear All and Save.

Formatting your USB flash drive to erase the data

If it was necessary to save the return, be sure to format your USB flash drive no later than 48 hours after the CRA accepts the return. Formatting it will erase all of the data. To format your USB flash drive, follow the steps:

1. Connect the USB flash drive to your computer

2. Click the Windows icon, search, and select This PC

Text version

Computer screen

This PC is highlighted

3. In the displayed window, find the name of the USB flash drive that you would like to format under the Devices and drives section

4. Right-click on the USB flash drive and select Format from the pop-up menu

Text version

Computer menu

Unlock Drive option

Format option is highlighted

5. Select Quick Format option and then Start to format the drive

Text version

Format sub-menu

Quick format is checked and highlighted

Start button is highlighted

6. Select OK to confirm that you will erase all data on the drive

Note

You do not have to save the tax return to EFILE or print it; therefore, this step is only necessary if you had to save the tax return. See Save a tax return.

Post filing - Good to know

If an individual returns to the organization where their tax return was completed with additional information that they forgot to provide at the time of filing, it is not your responsibility to adjust the return.

You can suggest that the individual submit a T1 Adjustment request (T1-ADJ), along with any supporting documentation, to their tax centre to have the return adjusted.

You can access form T1-ADJ, along with other forms commonly used by CVITP volunteers, under the Resources, Useful forms tab.

If an individual returns to the organization with follow-up questions about their return, please refer them to the CRA’s Individual tax enquiries line, 1-800-959-8281.

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