The Canada Revenue Agency processes more than 25 million tax returns each year and nearly two-thirds of these returns are filed electronically.
The CRA has gradually been pushing for electronic returns vs. paper returns for the last few years, as the advantages, including ease-of-reporting & quicker refunds, offer a more streamlined experience for both parties.
This is where NETFILE comes in. We’ll explain what NETFILE is and why you would use it to file your CRA taxes online.
What Is NETFILE?
“NETFILE is an electronic tax-filing service that allows you to send your individual income tax and benefit return directly to the Canada Revenue Agency (CRA) using the Internet and a NETFILE-certified software product.
Here are some of the following benefits that are associated with filing your taxes online using NETFILE.
- NETFILE is secure and confidential. Your personal information & tax return information is electronically encrypted and secure.
- Using the NETFILE service you can file your returns using any of the NETFILE-certified products.
- You will no longer need to upload your “.tax” file.
- Thanks to the Direct Deposit option refunds are not only filed faster but in some cases may be received in as little as 8 days.
- There is no need to mail a paper return. Less hassle filing and physically mailing a return.
- With a paper return, you may have to send in receipts. With NETFILE, unless asked at a later date by the CRA to provide paper receipts, you will not be required to attach or send in your receipts with your NETFILE return.
- As long as you file within the NETFILE hours of operation you will receive an immediate record of your return. This means that you will have proof your return has been sent and received by the CRA nearly instantly.
NOTE: Though this is not required to file a return, CRA’s My Account service helps to streamline the CRA tax return process. For instance, if you’re a returning user you can choose to have your information auto-filled on your new return. Also, for those of you using a smartphone, the CRA has an app available called MyCRA Mobile App that will allow you to access and modify your information directly from the app.
NETFILE sounds great, right? Faster tax return delivery and quicker refunds. Everyone should be filing taxes online! Well, not everyone. While 90% of Canadians are eligible to file their returns electronically, there are certain restrictions that the CRA has in place for certain filings and types of modifications that are not eligible for NETFILE.
Below are some of the reasons, but not all as it’s quite extensive and obscure for some of the older restrictions (such as Nova Scotia Research And Development Tax Credit Recapture) and for this reason we recommend you also read the full list of eligibility.
- Filing an amended return
- Filing a tax return older than 4 years (2013 – 2017 only!)
- Filing a tax return for another person.
Also, NETFILE is not allowed for these reasons.
- First time filers that are filing an income tax and benefit return where the CRA does not have your complete date of birth record
- Anyone that has filed for and was granted bankruptcy protection in the current year (2018) or the previous year (2017)
- You are NOT a resident of Canada (That sounds pretty fair!)
GST & HST NETFILE
For those filing their Goods & Services Tax (GST) / Harmonized Sales Tax (HST) returns and eligible rebates, you are able to use NETFILE to do this electronically.
Filing Your Tax Return Using NETFILE
Please note, Netfile no longer uses access codes to file. You are now able to file your CRA return using your social insurance number and birth date.
1.) Collect all T4 and T5 slips, covering employment and investment income, as well as any other T slips you may have received for the previous year.
2.) Use a NETFILE-certified tax software product. Fill in the required information, ensure the information is accurate and send!
It’s that easy. As long as you have the proper documentation necessary to fill out the form (your T Slips) and your personal information (found in the MyCRA section of the website), it should work smoothly.
NETFILE Hours Of Service
This is actually an important part of NETFILE, it’s not always open! For instance, you’ve got the hours listed below. 7 days per week for the majority of the day and through the night. Sounds super convenient, right?
Well as of this writing (January 3oth, 2018) NETFILE is actually closed until February 26th, 2018! We highly recommend visiting the hours of service page on the CRA site before attempting to NETFILE.
Time zone 7 days a week
Pacific time 3:00 a.m. to midnight
Mountain time 4:00 a.m. to 1:00 a.m.
Central time 5:00 a.m. to 2:00 a.m.
Eastern time 6:00 a.m. to 3:00 a.m.
Atlantic time 7:00 a.m. to 4:00 a.m.
Newfoundland time 7:30 a.m. to 4:30 a.m.
Because of solutions like NETFILE, Canada has made filing your personal income taxes online a breeze for the majority of Canadians.
If you’re eligible to file using NETFILE, it would be wise to take advantage of both the NETFILE service and the MyCRA Service.
Please note, that while you’re not required to send in your receipts, you’re still going to need to save them on record. Right now, there’s no better way to track your deductible business mileage (CRA Mileage Rate), expenses, and revenue than Everlance. Everlance saves the average person $6,500 and hundreds of hours per year vs. https://www.everlance.com/mileage-trackermileage logs and manual expense/revenue tracking.