The Canada Revenue Agency (CRA) is the body in charge of overseeing the tax laws and the receipt of tax revenue for Canada. It also manages the registration of charities as well as the regulation of tax credit programs. The Agency was established in November 1999 through the enactment of the Canada Revenue Agency Act of 1999.
The CRA has its headquarters in Ottawa. The head office is in charge of planning, budgeting, and reporting to the minister responsible for the Agency. For administration, the CRA is divided into five regions with tax service offices in each of these regions. They are:
Tax Returns Process
There are two systems in the Canadian tax system, which are the self-assessment and mandatory compliance systems. Each taxpayer must file their tax returns as at when due. If the individual or corporate entity fails to file before the deadline, the CRA has the right to impose penalties. Once the Canada Revenue Agency processes a tax return, it immediately issues a Notice of Assessment. Some of the tax returns the CRA processes for the Canadian government include:
- Income Tax Returns
- GST/HST Returns
- Payroll Tax Returns
Income Tax Returns
It is the duty of residents of Canada and non-residents in diaspora (under exceptional circumstances) to file a yearly tax return. The CRA has different forms depending on the entity that’s filing a return.
- Individuals file using the T1 return
- Corporations file using the T2 return
- Trusts file using the T3 return
Individuals may use NETFILE to file their returns or by paperwork. Third-party software provided by developers works with NETFILE. However, paid professionals and accountants use the e-file method that requires them to be registered with the CRA.
Individuals who need access to the Canada Child Benefit (CCB) benefits need to file their T1 returns; otherwise, the benefits won’t be available. The Registered Retirement Savings Plan is another program that depends on income being reported on the returns.
Almost everyone individual need to file their returns to the Canada Revenue Agency before the 30th of April. But if you’re self-employed, you may defer your returns till the 15th of June. However, the interest on the tax starts to accrue from the 30th of April. If you file a tax return that’s more than the tax you owe for a given period, the CRA may offer you a tax refund.
The Canada Revenue Agency is also in charge of collecting GST/HST returns. Entities that may register for GST/HST account include:
- Sole Proprietors
- Non-profit Organizations
Although non-profits are exempt from filing income tax returns, they are obligated to register for a GST/HST. Unlike the income tax that’s returned yearly, GST/HST may be returned monthly or quarterly. Businesses making less than C$30k a year may not be allowed to register for. GST/HST.
Payroll Tax Returns
Employers are mandated by law to subtract income tax and payroll taxes, remitting same to the CRA monthly quarterly, biannually, or yearly depending on the sum withheld. However, such an employee must file a T4 return to the Canada Revenue Agency. The T4 slip summarises all the wages paid by the establishment.
CRA My Account
The CRA “My Account” is a secure online service that individuals can use to access their benefits and tax information from the comfort of their smart devices or PC. It streamlines the process of paying your taxes, and receiving your benefits, cutting the wait time. Documents are readily available, eliminating the need of receiving them by courier.
How to Register for CRA’s My Account
Before you can benefit from CRA’s seamless tax service, you’ll have to provide the following information to sign up:
- Social Insurance Number
- Date of birth
- Tax return info of the previous year
- Current postal code
After this, you’ll create a user ID with a password. Once you create and answer the security questions and answers, you’ll be required to log in using your security code.
Benefits of CRA My Account
Once you register with My Account, you’ll receive every information relevant to you on time without the wait time using the Canada Post.
You may also be able to submit and view your application for Child Benefits and Universal Child Care Benefits.
You won’t have to worry about hackers getting access to your financial information because it is secure online.
Filing your tax returns is more convenient with the Auto-fill feature that loads all your tax information into the appropriate boxes.
All your financial data can be loaded from your T-slips, RRSP contributions, etc.
And talking about RRSP, you can quickly know how much contribution you’ve made into your RRSP straight from My Account.
When Should You Register for My Account?
There’s no better time than now. It isn’t compulsory to wait until you have a kid or relocate someplace else before you register. Besides, you can always update your account whenever you like online. If you’re pregnant, you should register now so your child benefits won’t be delayed.
Protecting your Information
The CRA has as one of its core mandates the protection of your taxpayer information. The Agency processes millions of tax returns each year, which means it can be a target for hackers. This is why the CRA provides steps to take for you to secure and safeguard your information.
- Once you register with the CRA’s My Account, you’ll be given the option to receive email notifications that inform you of essential activities happening with your account.
- You’ll go through an authentication process whereby the CRA call centre agents ask you security questions to prove your identity. This authentication process currently includes a unique PIN for your account before a call centre agent can access it.
If there’s a likelihood your taxpayer information is compromised, affecting your ability to file your tax returns, you may be considered for tax relief in the form of incurring interest or penalties.
There are so many other ways the CRA tries to protect your information. You may visit the slam the scam page for more fraud-related information.