Money Matters

Tax season Canada 2020: 6 ways to get your clients ready for tax Season

Getting clients ready for the Canadian tax season offers rewards that can last throughout the year. Here are five tips for accountants.

*Although the dates listed in this article were correct at the time of publication, there have been recent changes due to the Government of Canada’s COVID-19 Economic Response Plan. Please visit the Government of Canada’s website for the most up-to-date information.

It’s that time of the year again – tax season Canada for your clients!

Canadians from Mt. St. Elias to Cape Spear are required to get their 2019 taxes ready for the 30 April 2020 filing deadline (15 June 2020 for self-employed or their partners).

Of course, this is also the accountant’s time to shine. If tax season really is the only time most clients make contact with their accountant, then you should make it matter. Not only can you provide the core services of tax preparation but can also take time to enhance relationships and sell your business and tax planning services for the fiscal year underway now.

If nothing else, accountants should get in touch with their clients to tell them what’s required during tax season – and when.

Here’s some suggestions about what to discuss. Feel free to link to this blog, or copy and paste the details into your own communications.

1. Give clients a calendar for the Canadian tax season

Or at least tell them the most important dates. This year the obvious and less obvious dates are as follows, but one you should add is the date when you require them to get their paperwork to you in order for you to file for them in good time:

  • Mid-February 2020: Clients eligible to use the automated phone service to file their taxes (File my Return) should’ve received an invitation letter. If they haven’t then they or you should raise inquiries with the CRA.
  • 17 February 2020: Clients filing using paper forms should’ve received their tax package (see “Check for the T1 mail out” heading below).
  • 18 February 2020: Tax season officially begins! This is theoretically the earliest day that tax returns can be filed.
  • 24 February 2020: NETFILE, EFILE and ReFILE open for electronic filing of initial and amended T1 forms. In other words, this is the earliest clients can submit tax returns electronically.
  • 2 March 2019: Deadline for contributing to an RRSP if the client intends to get a tax refund.
  • Early March: Your clients will be receiving their tax slips and receipts needed to file a tax return. If these don’t arrive they should immediately raise inquiries.
  • 30 April 2020: End of tax season for most individuals. Tax returns (T1, T1135 etc) should be filed before midnight on this date, and payments made.
  • 1 May 2020: Date from which interest is charged by the CRA if tax isn’t paid.
  • 15 June 2020: Tax deadline for the self-employed (or for those who have a spouse or common-law partner who is self-employed). Note: Due tax payments should’ve been made by 30 April 2020 to avoid interest charges.

2. Check you’re the client’s representative

This is especially relevant if you’ve been approached by new clients across the year. Have you added them using EFILE? Also, did your practice complete your yearly renewal for EFILE in late October? You should be able to check all of this within your accounting software. If not, you can log in to the EFILE system online and both check and renew there.

Don’t forget that there’s a new e-authorisation process for new clients as of 10 February 2020. The process must now be done using a web form, through Represent a Client in EFILE or your accounting software. Form T1013 is discontinued for access to individual tax accounts, while there’s now a new form called AUT-01: Authorize a Representative for Access by Phone and Mail. This replaces the T1013, RC59 and NR95.

Confused? The CRA offers a dedicated phone line to help income tax service providers with queries — even “complex tax questions”.

3. Check for the T1 mail out for the Canadian tax season

Have those clients who don’t use computers – or can’t use them – received the paperwork to file their T1?

People who file using paper forms should’ve received their income tax package by 17 February. This will contain all they need, including instructions.

If the client hasn’t received their package they have a number of options. They can go to a Service Canada outlet until 1 May 2020 to order a copy, but the government says this will be in “limited quantities”. They can also try phoning to request a copy of the package be mailed to them, using the automated line: 1-855-330-3305 (English), or 1-855-330-3310 (French).

Of course, they can request a package online – but if they’re don’t use computers then this won’t be an option! So, what better time to provide a truly personal service by helping them out by logging in for them, and ordering the package?

If the client intends you to complete the paper form for them then don’t forget to inform them they should send the form to your office well in time for you to complete it before the deadline.

4. Tell clients turnaround times for the Canadian tax season

The CRA is open about their service standards, and you – or your client – can check online how long they’re likely to take for the processing of most taxes (including associated rebates and benefits).

Here are some common examples of CRA processing times anticipated this tax season:

  • T1 electronic filing and adjustment requests: within 2 weeks of receiving the return and any supporting docs.
  • T1 paper filing and adjustment requests: within 8 weeks of receiving the return and any supporting docs.
  • GST/HST return electronic filing: within 4 weeks of receiving the return and any supporting docs.
  • GST/HST return paper filing: within 8 weeks of receiving the return and any supporting docs.

Again, be sure to communicate to clients your own timeframe if you’re completing the return on their behalf.

5. Tell your clients what’s new in Canadian benefits and credits

As you know, there are a handful of changes coming into effect for the 2019 and later fiscal years. Here’s a quick summary:

  • Enhanced CPP contributions: There’s a new line – 22215 – on the income tax return to list deductions for enhanced CPP contributions on T4 earnings. For the self-employed, what’s required a little more complex – line 31000 should now be used to report as a non-refundable tax credit half of the base amount of their CPP (or QPP) contributions. The remaining half of the base amount, plus the full amount of the enhanced CPP contributions, are allowed as a deducting on existing line 22200.
  • Canada Training Credit: This new tax credit can be claimed from 2020, and in future years, but the CRA will start determining eligibility based on information in the 2019 return. Those who are eligible will be informed via a notice of assessment in their CRA My Account dashboard once their 2019 return has been processed.
  • Canada workers benefit: Formerly known as the income tax benefit, a simplified version of the advanced payments application is now available in the CRA My Account dashboard. It was introduced in February 2020.

Also modified this year are changes to the Climate Action Incentive Payment, Home Buyers’ Plan withdrawals, a new Tuition and Enrolment Certificate (T202), and more. The CRA lists details on a special page for tax professionals.

Finally, why not help your clients out by providing them with a list of requirements for what they need to do in the 2020-21 tax year? You can direct them to the Sage Year-End Centre, or use what’s mentioned at the site as an aide-memoire or inspiration for your own more personalised advice.

*Although the dates listed in this article were correct at the time of publication, there have been recent changes due to the Government of Canada’s COVID-19 Economic Response Plan. Please visit the Government of Canada’s website for the most up-to-date information.