CRA SimpleFile Service

TD1 Income Tax and Benefit ReturnTD1 Income Tax and Benefit Return

Published December 18, 2024

Logo by Mike

By L.Kenway BComm CPB Retired

SimpleFile is a free, invitation-only, streamlined service introduced by the Canada Revenue Agency (CRA) in 2023 to make the process of filing tax returns easier for Canadian taxpayers.

This pilot program is designed to provide individuals with a straightforward and user-friendly experience. As many lower-income and vulnerable Canadians miss out on tax benefits by not filing an income tax return, FileService aims to reduce the complexity these individuals often associate with tax filing.

It is available only to file the for the immediate prior taxation year. It is not available to file for any other year.

As the pilot program was successful, it is expected to continue to be offered in 2025 for the 2024 tax filing season. The 2023 program for phone and digital services ends January 31, 2025. 


How Do Canadians Access Government Benefits?

Filing your income tax return in Canada is tied to accessing most government benefits and credits. Here's how it works:

Income Tax Return and Benefits Connection

  1. Annual Tax Filing Requirement: Filing your tax return determines your eligibility for benefits, updates your income information for benefit calculations, and maintains continuous benefit payments. You are required to file a tax return, even if you have no income to report if you want to receive the benefits you are entitled to.
  2. Common Federal Benefits Accessed Through Tax Filing: There are two types of tax credits accessed by filing your tax return - (1) refundable such as the GST/HST Credit, Canada Child Benefit (CCB), Canada Workers Benefit (CWB), and Climate Action Incentive Payment (in eligible provinces);   (2) non-refundable tax credits such as Basic Personal Amount, Age Amount, Disability Tax Credit, Medical Expenses, Charitable Donations, and Pension Income Amount.
  3. Benefit Calculation Process: Benefits are based on your net income and your family's net income for certain benefits. They are automatically calculated when you file which adjuster your benefit amounts every July based on previous year's tax return.
  4. Important Considerations: You must file on time to avoid benefit interruptions. Both spouses/common-law partners must file to receive certain benefits. It is your responsibility to notify CRA of address changes or significant life events. Some benefits require additional forms or applications (e.g., Disability Tax Credit).
  5. Provincial/Territorial Benefits: Many provincial/territorial benefits are also automatically calculated based on your federal tax return.

Why Did The Government Implement SimpleFile?*
The SimpleFile pilot project is part of the Canada Revenue Agency's broader strategy to help vulnerable Canadians access their benefits by making tax filing more accessible. Many Canadians miss out on benefits they are legally entitled to receive simply because they don't file a tax return.

The SimpleFile service shows the current government's commitment to removing barriers preventing eligible Canadians from receiving their benefits by providing a simplified, no-cost way to file their taxes.

Here is why this matters:

  1. CRA SimpleFile service is a no cost to use (it's a free service) with multiple filing options (phone, digital, paper). The simplified process requires no calculations, no tax software or professional help. It is invitation-based so as to reach eligible individuals directly.
  2. The CRA SimpleFile service focuses on vulnerable individuals with straightforward tax situations. 
  3. Many low-income Canadians miss out on benefits simply because they don't file taxes. Some may not realize they need to file to receive benefits, even with no income. Others might find the tax filing process too intimidating or complex.
  4. Potential benefits accessed through the CRA SimpleFile service are the GST/HST Credit, the Canada Workers Benefit, Provincial/territorial credits, Climate Action Incentive Payment, plus other income-tested benefits.


How Does The CRA SimpleFile Service Work?

To use the SimpleFile service, here are some typical requirements and features you might expect:

  1. Eligibility: SimpleFile is by invitation-only use. The CRA sends out invitations to taxpayers who meet specific eligibility requirements. If you receive an invitation, it means that the CRA has identified your tax situation as suitable for the SimpleFile service.
  2. Simplified Forms and Instructions: The SimpleFile service provides simplified forms and step-by-step instructions to assist you throughout the tax filing process, which helps in reducing errors.
  3. Filing Options: The goal of SimpleFile is to simplify the process of filing a tax return. While the service does offer multiple filing options, your invitation letter will indicate the filing option that is available to you.  Along with SimpleFile Digital, you might also be able to file using SimpleFile by phone or SimpleFile by Paper. As mentioned, it will depend on the instructions provided in your invitation.
  4. CRA My Account: If you choose the digital filing option, you will need to have access to the CRA's My Account service. If you don't have a My Account yet, you will need some lead time to register. Registering requires verifying your identity with the CRA, which then allows you to access and manage your tax information online.
  5. Income Sources: The service is tailored for those with common types of income below a certain threshold such as employment income, pension income, and simple investment income. If your income is derived from wages, interest, or retirement benefits, the CRA may send you a SimpleFile invitation.
  6. Personal Information: You will need to provide your Social Insurance Number (SIN), address, and other personal details to complete your tax return accurately.
  7. Previous Tax Returns: You cannot file previous tax years using SimpleFile. Although having your prior year tax return information on hand can be helpful, it is usually already accessible through your CRA My Account if you have filed online in previous years. 

Note that specific requirements and functionalities can vary, so it's always a good idea to visit the official CRA website or contact them directly for the most up-to-date and relevant information related to SimpleFile and your personal tax situation.


Who Is Eligible For CRA SimpleFile Services?*

Eligible taxpayers will receive an invitation letter from the CRA, which includes filing options and instructions. After filing, a notice of assessment will be issued.

To be eligible for CRA SimpleFile service, a taxpayer must have income below a certain threshold, which varies based on age, province, and disability status. The income eligible must come from one of these sources:

Benefits

  • Old Age Security (T4A(OAS))
  • Guaranteed Income Supplement or Net federal supplements (T4(OAS))
  • Canada or Quebec Pension Plan benefits (T4A(P))

Employment and Income Support

  • Employment income (T4)
  • Employment Insurance Benefits (T4E)
  • Workers' compensation benefits (T5007)
  • Social assistance payments (T5007)
  • Canada Emergency Benefits (T4A)

Investment Income

  • Some Interest Income (T5, box 13)

For Quebec residents, the SimpleFile program helps only with the federal tax return, not the provincial one with Revenu Québec.


Is Self-Employment Income Eligible?

As you can see from the above income sources, self-employment income automatically makes a taxpayer ineligible for this service. SimpleFile focuses on taxpayers with straightforward income sources, typically from employment, pensions, or social benefits.

Self-employed individuals usually have more complex tax situations that require additional forms and calculations, which are not covered by the SimpleFile service.

It is worth noting that having income from sources not listed also makes one ineligible for the SimpleFile service.


CRA SimpleFile Service Filing Options* 

Each filing option is designed to be straightforward, and the invitation letter you received from the CRA provides the necessary information and instructions.

SimpleFile by Phone

  • Availability: 21 hours a day from 6 am to 3 am Eastern time, from July 15, 2024, to January 31, 2025.
  • Process: You can auto-file your return over the phone without filling out forms or making calculations. There is no need to speak to an agent.
  • Completion Time: 5 to 10 minutes.
  • Steps: Verify personal information and answer short questions using your phone keypad.
  • Additional Criteria: No income is required to use; you must have a recent filing history. If disconnected, you must call again.
  • PIN Use: If you provide your PIN, the phone service offers an estimate of net and taxable income and any refund.
  • Make a Mistake: If you make a mistake or are disconnected during filing, hang up and start over.
  • Privacy and Security: Information is not saved during phone sessions


SimpleFile Digital

  • Availability: 21 hours a day from 6 am to 3 am Eastern time, from July 3, 2024, to January 31, 2025.
  • Process: File online using a web form, with no calculations required.
  • Completion Time: 10 to 20 minutes.
  • Steps: Use the validation code from your invitation, provide personal information, and answer short questions.


SimpleFile by Paper

  • Availability: No closing date, but the form is specific to the tax year on the form.
  • Process: File quickly by completing and returning the provided paper form.
  • Completion Time: 25 minutes or less.
  • Steps: Provide personal information, confirm income details on the form, and mail it back using the prepaid envelope.
  • Additional Criteria: No income or filing history is required; it allows tax-exempt income.

If you need assistance during or after filing, call the CRA. You will receive a notice of assessment once your return has been assessed.


What To Do With This Information

If you or any of your family and friends have not been filing their tax returns, take the time to explain that they are likely missing out on benefits they are entitled to by not filing.

*Source: CRA SimpleFile services – Summer 2024 pilot


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