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T1 season: What’s new this year?

Personal tax season is just around the corner. Find out about some new important tax measures and changes to Canada Revenue Agency services that can help you ease your workload and better serve your clients.

Every year brings complicated new tax rules and CRA service changes that tax practitioners need to keep up with. Below we highlight some of the most important of these changes coming onstream this year.

CRA service improvements

New authorization processes
The CRA has introduced new processes for authorizing taxpayer representatives (described in our summary). Before you ask your clients to authorize you, your clients should understand what level of access you gain and what it will allow you to do. If you can’t print the CRA version of the authorization forms to get your client’s signature, the CRA says it will consider granting authorization if you use your own document — as long as it contains all the information on the CRA form. From a practice risk perspective, however, CPA Canada believes that printing the authorization form from your T1 software and having the client sign that form will help minimize errors.

CRA dedicated telephone service for small firms
In response to the CRA’s 2018 Serving You Better Consultations, the CRA has made its dedicated telephone service for tax preparers permanent. This special helpline gives tax service providers free access to CRA employees who can help with complex technical issues. More information on eligibility and the registration process is available online.

Tax filing status tracker
The CRA has introduced a new tool for tracking processing times. For now, the status tracker provides general updates, but more file-specific information will be added over time (see our summary for details).

T2202 Tuition and Enrolment Certificate
Changes to the T2202, previously T2202A, take effect as of 2019 that allow you to import the T2202 data from the CRA’s Represent a Client (RAC) portal to your clients’ income tax return. Although educational institutions are required to file the new T2202 annual information return with the CRA, this initiative is new for 2019 returns, so there may be problems during this transition. We therefore don’t recommend that you rely completely on this new feature. Rather, we suggest you ask your clients for this information directly and confirm that any information you import from RAC is complete and accurate.

PayPal payments accepted
You and your clients can now pay tax bills using PayPal through a third-party service provider.

T1 formatting
Some line numbers on the personal income tax return that previously had three or four digits now have five digits. For example, you can now find employment income on line 10100, not line 101 as in previous years.  Also, the calculation of federal tax is now completed in the T1 jacket as schedule 1 has been retired.

Revised T4002 Self-Employed Guide
The CRA has updated the T4002 self-employed guide to clarify that farmers can still use the cash method of accounting for income tax purposes. The 2018 version wasn’t clear and led to some confusion amongst practitioners.

Top tax changes for 2019 T1 returns

Canada Workers Benefit
For 2019 returns, the former Working Income Tax Benefit (WITB) is replaced with an enhanced version, the Canada Workers Benefit (CWB). Like the WITB, the CWB is a more generous refundable tax credit that is meant to supplement the incomes of low-income Canadian workers.

Enhanced Canada Pension Plan (CPP) contribution deduction
As part of the gradual phase-in of CPP enhancements, employee CPP contributions have increased for 2019. To compensate those who would have otherwise contributed those funds to their RRSP, a tax deduction (rather than a tax credit) is allowed for the enhanced portion of the contribution.

Federal dividend tax credit
The small business tax rate was reduced as of 2019, so the tax treatment of non-eligible dividends has been adjusted accordingly.

More tax changes: 2020 and beyond

Some new measures don’t take effect until 2020, but you can help your clients plan for next year’s tax filings by discussing these changes with them now.

The basic personal amount (BPA) will rise to $13,229 in 2020, with more increases each year until the BPA reaches $15,000 for 2023 and later years. However, the enhanced portion of the BPA is gradually reduced for people with higher incomes and fully eliminated for the highest earners. Also, the new 2020 TD1 form requires people who won’t get the entire enhanced BPA to complete TD1-WS form, which helps them calculate their revised amount. Your clients may ask you to assist them with these forms.

Canada Training Credit
The new refundable Canada Training Credit is available for eligible tuition fees paid for courses taken in 2020 and future years. The CRA will track claimants’ CTC limits and provide it on their annual notices of assessment.

Home buyers plan
The maximum amount you can withdraw from your RRSP under the home buyers plan has been increased to $35,000. The plan will also be extended to help Canadians maintain homeownership after a marriage or common-law partnership breaks down.

New T1134 deadline
Next year, the deadline for reporting foreign affiliate information on T1134 forms changes to December 31, 2021 (i.e. 12 months after the reporting taxpayer’s tax year-end). For the following years, the deadline will change to October 31 (i.e. 10 months after the reporting taxpayer’s tax year-end).

Digital subscriptions tax credit
Starting in 2020, individuals can claim a new non-refundable tax credit of up to $500 for qualified digital subscriptions.

Journalism – qualified donee status
Also in 2020, individuals can claim the donation tax credit for donations to qualifying journalism organizations.

Finally, as you prepare your practice plan for the upcoming personal tax season, now is also a good time to review how your practice minimizes tax risk. Check out our Tax Risk Management Guide for comprehensive advice on how to safeguard your practice.

Keep the conversation going

Are there more ways CPA Canada’s taxation team can help you prepare your practice for personal tax season? Post a comment below.


CPA Canada’s Tax Blog is designed to create an exchange of ideas on tax policy and practice issues, and their impact on those who practice tax. Your comments can provide helpful input into the public interest advocacy positions developed by CPA Canada.