CRA Pushes SimpleFile

Evelyn Jacks

CRA is hoping that two million taxpayers will opt to use their new “SimpleFile” services - by phone, by mail or digitally – to have their tax returns filed “automatically by the Canada Revenue Agency (CRA). The goals is to help more vulnerable people receive access to over $3 Billion in tax credits and benefits. Unfortunately, however, using the system is anything but simple. It may in fact be a very stressful and frustrating exercise. However, CRA believes that will improve exponentially. Check out what’s to know about SimpleFile:

The Backdrop. The SimpleFile service is offered by invitation only. CRA sent invitations out to use the service in February, March and Summer of 2025 either by mail or through MyAccount.  CRA will do the tax return based on information on file for the taxpayer and the answers the taxpayer gives on the phone, digitally or by mail. Options are to use SimpleFile by phone, digitally or by mail.

Who qualifies? Income must be under a certain amount that is based on a variety of factors like your age, your province of residence and your disability status. In short, it’s a bit of a mystery.

Are There Income Limitations? Yes, income can only be from some income sources:

• Seniors: With three public income sources and two specific slips: The T4A(OAS) which contains the Old Age Security and Guaranteed Income Supplement / Net federal supplements – T4A(OAS), and the T4A(P) Canada or Quebec Pension Plan benefits which includes retirement, survivor and disability benefits
• Employees: Look for available 4 slips: The T4 for Employment income, the T4E for Employment Insurance Benefits, as well as the T5007 for Workers’ Compensation and Social Assistance payments or the T4A for retroactive Canada Emergency Benefits.
• Investors: Users of the service may also have a T5 slip (but not a T3 slip) with “some” interest income, although the amounts are undefined.  

Nuances - File by Phone. Taxpayers using the phone service, should be prepared to call back – again and again -  if they are disconnected by CRA, or they make a mistake. The tax filing information entered will only be saved if the tax filer actually makes it through the entire process. 

Once the return is filed, it is possible to receive an estimate of net income, taxable income, and any refund that the tax filer may be eligible for,  but three is a catch: to receive this information, the tax filer will need to provide a PIN to confirm their identity. To receive one, it’s necessary to apply through CRA’s MyAccount, which requires a computer and internet access. 

This seems like a circle of doom for the people who are using the phone service especially because they don’t have a computer, for example. 

Nuances – Digital Filing. Taxpayers will be sent a link to use the service. It’s also interesting to note that this service is only for the federal return, which includes all provinces and territories except one. People in Quebec will still have to file a separate Quebec return as well.

Nuances – Paper Filing. In the case of the paper filing service, there is no need for a filing history and those with exempt income (such as certain Indigenous filers) will qualify. The form is available at local friendship centres, through a community representative, band council office, Service Canada office, or a Northern Service Centre. 

Indigenous people who identify as Inuit, Metis and First Nations, must meet all of these conditions:

• The tax filer could not bankrupt at any time in the year nor can the return be for a deceased taxpayer; in addition,
• There were no repayments to be made for the now discontinued universal child care benefit payments (UCCB), or overpayments of COVID-19 benefits received from 2020 to 2022.
• The tax filer was a resident of Canada throughout the tax year with a taxable income of zero. If there was taxable income it could not be over the income thresholds shown in the chart below.

How Has the Pick Up Been? This service has been available 21 hours a day between 6 am and 3 am (Eastern time), 7 days a week starting February 24, 2025. CRA notes that by November of 2024, 93% of its invitees (1.5 Million people) had filed a tax return to receive benefits. However, according to recently tax filing stats for the 2024 tax year, the pick up for SimpleFile specifically, so far, has been poor: less than 1% (only 80,240 people).

The Bottom Line. It is estimated that 12%[1] of working age Canadians miss out on claiming close to 2 Billion is tax benefits because they don’t file a tax return. SimpleFile is targeted at low income people who should be receiving these benefits. Unfortunately, many of these Canadians may not have the means or the ability to navigate a complex digital tax system or even pay for a phone. Could it be that the tax system is not the best one to deliver such important income-tested benefits to the community? If not, what is a good alternative? These are questions worth addressing.

Please let us know in KBR’s October poll when it launches next week! This month, don’t forget to weigh in with your opinion on this important question:

On September 2, Finance Minister Champagne mandated CRA to implement a 100-day plan to “strengthen services, improve access, and reduce delays.” That’s by December 11, 2025. Do you believe this approach will help?

Additional educational resources:  

[1] The Mystery of Unclaimed Tax Benefits - School of Public Policy & Administration