Important Update for Canadian Taxpayers

The Canada Revenue Agency (CRA) has recently advised taxpayers to wait before filing their 2024 income tax returns if they need to report capital gains from last year. Here’s everything you need to know and how this impacts your tax filing process.

Why Is the CRA Asking Taxpayers to Wait?

The CRA is currently updating its systems to reflect the correct capital gains inclusion rate. Initially, the government planned to increase the inclusion rate from 50% to 66.7% in the 2024 federal budget. However, the change has been delayed until January 1, 2026 (or may be scrapped altogether), meaning the 50% rate still applies for 2024 and 2025.

Although the CRA has restored its tax forms to reflect the 50% inclusion rate, CRA systems are still being updated. This means:

• Some tax software may not allow affected taxpayers to submit their returns yet. (Chequer Tax, however, is ready but CRA systems still need to be updated)
• The CRA cannot issue a Notice of Assessment for these returns until the updates are finalized.
• Some financial institutions may delay issuing tax slips as they correct previous calculations.

Who Needs to Wait to File?

You Can File Now If:

• You did not have capital gains in 2024.
• Your investments were only in registered accounts (e.g., RRSPs, TFSAs).
• You are not waiting for tax slips from financial institutions.

You Should Wait If:

• You sold stocks, real estate, mutual funds, or other investments that generated capital gains in 2024.
• You are waiting for corrected tax slips (T3, T5, or T5008) from financial institutions.
• Your tax preparation software does not yet allow you to file capital gains.

New Filing Deadlines for Affected Taxpayers

To accommodate the delay, the CRA has extended certain tax filing deadlines:

• Individuals reporting capital gains: The deadline to file is extended to June 2, 2025, with no interest or penalties.
• Financial institutions issuing tax slips:
  • T3 slips (mutual fund & trust income): Deadline extended to May 1, 2025.
  • T5008 (securities transactions) and some T5 slips (investment income): Deadline extended to March 17, 2025.

These delays may mean that some tax slips will not be available in CRA My Account, Represent a Client, or Auto-fill My Return services for taxpayers who try to file early.

How This Impacts You

1. Ensure You Have All Necessary Tax Slips

If you file your tax return too early and miss reporting investment income, you may need to re-file or risk penalties. Double-check that you have received all required tax slips before proceeding.

2. Be Aware of Tax Software Updates

If you file taxes using tax preparation software, be sure to check if capital gains reporting is available before submitting your return. The CRA is working with software providers to certify updates, with most expected to be ready by the end of March 2025.

3. Plan for Delayed Tax Refunds

If you typically receive a tax refund early in the season, be aware that delays in processing tax returns could affect refund timelines. Filing with missing information could also lead to corrections later, affecting benefits and potential audits.

Chequer Tax by PayEvo

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With Chequer Tax, you can:

 ✔︎ File with confidence – Our seamless integration with the CRA ensures fast, accurate submissions.

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