New T2054 capital dividend account election form – follow up

As a follow up to our September 12, 2022 news item, “Questions on the new Form T2054 – Election for a Capital Dividend Under Subsection 83(2)”, the Canada Revenue Agency (CRA) has responded to our question on whether taxpayers can continue to use the previous version of the T2054 until tax software developers have incorporated the new T2054 into their products.

The CRA has confirmed that the old T2054 can be used on an interim basis until the tax software is updated and, in particular, the CRA will accept the filing of the old form as a valid capital dividend election. However, the CRA also stated that it may contact taxpayers for additional information (i.e., any new information that would be reported on the new form) and this may slow down processing. The CRA has indicated that using the most current version of the T2054 will ensure that the CRA has the information required, reduce the need for client contact, and improve processing time. We have communicated the need to better coordinate the release of forms such as the T2054 so that new forms can be incorporated into tax preparation software before a new form is required to be filed to the CRA.  

Questions around the process to file the form electronically remain outstanding. We will continue to keep you updated on relevant developments around this issue.