Being registered as a non-governmental or charity organization in Canada paves the way to some benefits. Just as there are benefits, there are also challenges and regulatory obligations that must be fulfilled.
It is crucial to evaluate the benefits and challenges of running a charity organization in Canada. There are specific rules and regulations governing charity organization in Canada. Among the obligations required of a charity organization is filling the T3010 form.
The T3010 is a necessary form every charity organization should fill to avoid any penalties. If you run a registered charity in Canada or plan to run one, here’s an overview of the T3010 form.
What is the T3010 Form?
The T3010 form is an income tax return form for registered charities in Canada. This form is long and can be time-consuming. It includes a checklist to make sure taxpayers fill it out as required by the Canada Revenue Agency (CRA).
The T3010 has different sections that must be completed even during fiscal years where the charities are inactive. This form is necessary for registered charities to remain registered.
The form T3010 is for registered charities in Canada. It is also known as the Registered Charity Information Return. It is an income tax return for registered charities. It is a form that must be completed and filled every fiscal year for registered charities to maintain their registration status.
Financial Statements of the charities for the tax year being filed must be provided along with form T1235 (Directors/Trustees and Like Officials Worksheet), form T1236 (Qualifies Donees Worksheet/ Amount issued to other organizations) and form T2081 (Excess Corporate Holdings Worksheet for Private Foundations) (if applicable).
Let’s assume that your charity is incorporated in Ontario and is subject to the Ontario Corporations Act, along with all the forms above and financial statements. In that case, you must also include the RC232 (Corporations Information Act Annual Return for Ontario Not-for-profit Corporations).
Don’t include any of the following in your return;
- Amended governing document
- Donation receipts
- Requests for change of fiscal period-end
- Other correspondence
The document mentioned above should be submitted online in a different request or mailed out separately.
Who is Qualified to Fill the T3010 Form?
As mentioned earlier, the T3010 form is for registered charities. Authorized persons in the charities, such as any director registered with the My Business Account or any authorized representative registered with Represent a Client (for online completion of the return), can fill the T3010 form.
If your organization or association is a registered Canadian amateur athletic association (RCAAA), instead of filling the T3010 form, you are to file form T2052 (Registered Canadian Amateur Athletic Association Information Return).
When Should the Form be Filled?
Registered charities must fill out their annual return slips within and no later than six months after the end of their fiscal test. The inability to do this will attract penalties. Below is a screenshot showing each budgetary year-end and the due date for the return.
How to File a Charity Return
There are two ways you can file your charity returns in Canada. They include:
- Through My Business Account (MyBA)
This is a digital way of completing your charity return form. You can do this on your My Business Account. If it is your first time accessing the charity’s account using MyBA, follow the instructions under the “Registered charity, RCAAA, RNASO” to log into MyBA. Once you are in, select the link “File a return” under your RR account.
If you are not finding it easy or have any questions on the online return, you can contact Charities Directorate.
- On Paper
Filling the form on paper requires you to download and print the document’s PDF version and the other documents mentioned earlier. You can choose to complete by hand or use the PDF fillable or saveable version. Mail the completed forms along with your financial statements to the address below;
Canada Revenue Agency
105-275 Pope Road
Summerside PE C1N 6E8
If you mail your return to any other address, it might delay the processing. Filing the return online has advantages over filing it on paper. The advantages include:
- The online format is sectioned; you can complete it at your leisure.
- You can skip additional questions by merely clicking “yes” or “no” on previous queries or checking certain items on a list.
- Progress bars and status indicate the sections you have completed, started, or yet to start.
- You can start and stop it anytime, and the system saves your information up until the point you stop.
- Multiple individuals can work on it.
- You can review and edit any section at any time.
- You can also print your return after submission.
- There’s no need for a postmark; the CRA considers the date you submit as your received date.
After submission, either online or by mail, you will receive a confirmation message through the means your return was received. The received date on your return is the date you clicked “submit” online.
If mailed, the CRA considers the postmarked date on the envelope as the received date. If the postmarked date is regarded as ineligible, the CRA will use its stamp date. If you deliver the return by hand, the CRA will use its stamp date as the received date.
Sections in a T3010 Form
There are six sections in the T3010 form that you must fill. These sections are:
This section requires you to identify the type of charity organization you’re running. It has several lines for different types of charity recognized by the CRA.
Officials include directors, trustees, and any officiating members. This section has a few lines that allow you to write the names, date of birth and addresses of individuals managing or coordinating the charity.
- General Information
There are several lines in this section that require the general details of the charity and its programs. The information you provide in this section will determine if you need to get additional forms to complete other parts of the document.
- Financial Information
Everything about the financial details of the charity goes to this section. This section has the following part, Accounting method (D1), Summary of financial position (D2), Revenue (D3) and Expenditures (D4).
The T3010 form must be certified by persons authorized to sign for the charity. This section asserts that the charity is aware of the information provided and that they are accurate and recent.
- Confidential Information
This section includes all confidential data that are not accessible by the public.
Failure to File a Return
To remain registered, charities must file the return every year, whether they were active throughout the year or not. A charity will be considered ‘inactive’ by the CRA when the charity doesn’t spend its resources to carry out charity activities or projects in a fiscal year.
When this happens, the charity is still required to file a complete return and explain in the ‘Ongoing Programs’ section (C2) why it was not active. If the charity does not do this, it is at risk of losing its status as a charity. If the inactivity continues, the CRA may review the charity’s file to see if it still qualifies to be registered.
If a return is not filed within six months after the end of the fiscal year by a registered charity, the CRA can revoke registration. When the CRA cancels the registration, the following happens:
- The charity cannot issue official donation receipts anymore.
- The charity will have to pay income tax.
- The charity must give all of its remaining assets to an eligible donee or pay a revocation tax equal to its assets’ total value.
If the charity wants to reapply for registration, it will have to pay a late-filing penalty fee of CA$500.
If a charity is no longer in operation, it can request voluntary registration revocation. That is, its registration status will be revoked. However, the consequences of revocation will apply to it.
When a registered charity fails to complete the T3010 form, several penalties await them, revocation being the major one. Once Canada no longer recognizes an organization or corporation as a legal charity, they cannot provide official donation slips to their donors.
Also, they won’t be eligible for tax exemptions due to registered charities and charitable corporations. And according to Part V of the Income Tax Act, they will have to transfer their properties to an eligible donee.
There are some special requests that charities make that require the CRA’s approval and affect how they file their returns. Such requests include;
- Fiscal Year-end Change
If a charity receives approval for changing its fiscal year-end, it will have to file a different return for the period between its former budgetary year-end and the start of the new fiscal year.
- Permission To Accumulate Funds
If the CRA permits a charity to accumulate funds, the amount accrued in the fiscal year and income earned must be reported on line 5500 of the form. The accrued amount spent is reported on line 5510.
- Disbursement Quota Reduction
If a charity receives approval for disbursement quota reduction, it must file form T1240 (Registered Charity Adjustment Request) to adjust the fiscal year’s return in which the decline occurred.
The income tax return for registered charities in Canada includes a checklist that helps you avoid common mistakes when filing your charity return.
The T3010 form is one of the required documents needed for registered charities in Canada to file their income tax return at the end of every fiscal year. Failure to do this may lead to the revocation of their registration status by the CRA.