If you have business clients filing six or more information returns, they will be affected
Those who prefer to use paper methods to file information with the Canada Revenue Agency may be about to lose that right.
The CRA is updating its mandatory electronic filing thresholds and those businesses that file six or more information returns, such the T4 payroll return (renumeration paid), T5 (investment income), T3 (trust income) and T4A (pension and other income return), must do so using electronic methods.
The rule comes into effect from January 1, 2024, and drastically cuts the previous threshold of fifty or fewer returns to just five.
Electronic filing can be done via the CRA’s secure portals like My Business Account, mobile apps, and other options depending on whether the business has a web access code or not. Details can be found on the CRA website.
Penalties for paper
For those businesses that will be required to provide electronic only returns there will be a scale of financial penalties imposed.
For those filing between 6 and 50 after January 1, 2024, the penalty is $125, rising to $2,500 for those filing more than 2,501 paper returns.
The CRA says that electronic filing is faster, provides quicker responses to businesses, and is less vulnerable to human error and disruption than paper filing.
The changes to the mandatory electronic filing threshold follow a change in legislation.
