EFILE and NETFILE

EFILE for individuals

Electronic filing (EFILE) allows registered tax professionals to electronically send your personal income tax return directly to the CRA. Since the returns are received and verified almost instantly, refunds can often be issued within a couple of weeks of submitting your return. Although almost all Canadians are eligible to use this system, there are certain returns that cannot be EFILED, such as returns for non-residents and certain deemed residents, taxpayers who have an address outside of Canada, and taxpayers who have to pay income tax to more than one province or territory.

NETFILE

You may also be able to file your personal income tax return directly with the CRA via the internet using their NETFILE service. If you qualify for NETFILE, you will need to prepare your return using one of the tax preparation software programs or web applications certified by the CRA for NETFILE. Once you are ready to file your return, you will need to provide your social insurance number and date of birth for identification purposes. Detailed information on the NETFILE service, including a list of certified software programs, can be found on the CRA’s Web site. NETFILE does not require that you file the supporting documentation used to prepare the return, unless requested to do so.

Electronic filing of GST/HST returns

Refer to topic 46 for information on the electronic filing of GST/HST returns.

Internet filing for T3s, T4s, T5s and other information returns

As noted in topic 160, businesses can file several different information returns over the Internet. The option to Internet-file is available to those businesses that file up to 50 slips and use authorized tax preparation software. Businesses that file more than 50 slips related to a particular type of information return are required to file electronically.

Corporation Internet filing

This filing option allows corporations to use a six-character alphanumeric Web Access Code (WAC) to file their corporate income tax returns directly to the CRA through the Internet. In prior years, the WAC was provided in a letter from the CRA; however, the CRA has discontinued the use of these letters. If you cannot remember your WAC, you can call the CRA Helpdesk at 1-877-322-7849 or use their WAC online service to obtain the WAC assigned to your business. Instead of using a WAC to file returns, tax professionals who file corporate income tax returns for their clients can register and transmit using an EFILE online number and password.

Certain corporations must file their returns in electronic format (mainly, most corporations with annual gross revenues in excess of $1 million). Also,  tax preparers who prepare more than 10 T2 corporation income tax returns are required to file them electronically.

To ensure compliance with the mandatory electronic filing changes, penalties have been introduced for filing a corporate tax return in an incorrect format. If you are required to file your corporation’s tax return electronically and fail to do so, you may be assessed a $1,000 penalty. Tax preparers who are required to file electronically but do not comply, may be charged a penalty of $100 for each T2 corporation return that is paper-filed.