Pandemic Creates Tax Filing Complications For Canadians

Despite an April 30 deadline, 60% of Canadians are yet to file their 2020 returns. A survey by H&R Block Canada has found that a third of taxpayers are dreading this tax season and claim not to have the time to file. Another quarter indicated they were clueless on tax preparation and disliked having to file taxes. The latter is looking to rely on help from tax professionals to help get their returns done. Another 50% confirmed having had their financial situation adversely affected by the pandemic and receiving financial benefits that have added to the confusion on how to go about filing.

As of March 29, the Canada Revenue Agency (CRA) reported having received just 9.1 million returns. This is out of 29 million returns that are expected to be filed by the end of this season. This figure is also lower than what was filed by the same date in previous years.

The CRA is encouraging people to avoid procrastinating on their returns to avoid delays in refunds. Of 8 million returns from the 2020 tax season that have already been processed by the CRA, 70% qualify for a refund. The average of these refunds thus far is $1,801. H&R Block Canada is also advising taxpayers to avoid delaying filing and to seek professional help where they are unsure of how to maximize their returns.

This professional help is being made available via multiple channels. The CRA is offering extra support over the Easter period. Their online Community Volunteer Income Tax Program (CVITP) is also available for those with lower incomes and simple tax situations to get free assistance. This program provides tax preparation clinics and assists eligible individuals in filing their returns.

The CRA’s Heather Daniels confirms that some community organizations have had to close since the beginning of the pandemic due to social distancing requirements. Estimates indicate about 60% of CRA-sponsored free tax clinics remain open. Realizing the pandemic would persist, the CRA initiated virtual tax clinics.

The program enables volunteers to assist taxpayers file returns through email, video-conferencing, and telephone clinic sessions. Some organizations are also facilitating drop-offs, whereby taxpayers can drop their paperwork which is then delivered to a volunteer who does the filing electronically.

These virtual clinics have proven useful in allowing volunteers to connect with taxpayers from just about anywhere, not just their local area. It is also enabling volunteers from outside local communities to contribute.

The government is being asked to boost their funding for financial clinics targeted at lower-income groups. CEO of Prosper Canada, Elizabeth Mulholland, says that low-income Canadians need to file to access public services and financial help.

The CRA has also approved multiple tax software programs. It is advising taxpayers to make use of the NETFILE certified software or use an electronic filer that is certified to use their EFILE service. Those filing by paper are being advised of possible delays due to COVID measures.