CRA has recently made changes to the Disability Tax Credit (DTC) application process. The key changes include:
- a significant revamp of Form T2201, Disability Tax Credit Certificate
- the launch of a new digital application that guides medical practitioners through the completion of Part B of Form T2201 and creates a completed form
- Form T2201, and any supporting documents can now be submitted using “Submit Documents” in My Account or Represent a Client
- updates to Guide RC4064 Disability-Related Information 2020
As a reminder, the Disability Tax Credit Promoters Restriction Act (DTCPRA) was enacted earlier this year and will limit the amount “promoters” can charge for preparing DTC claims to $100. The DTCPRA will come into force on November 15, 2021. In our discussions with the CRA, we outlined our key concerns with the new rules and asked for further clarity on the types of services that will be captured under the DTCPRA.
We will continue to keep you informed of developments in this area.
September 23, 2021
Update on trust reporting proposals
In the 2018 federal budget, the government announced new reporting requirements that will apply to certain trusts. Under the proposals, affected trusts will be required to report the identity of all trustees, beneficiaries and settlors, as well as the identity of each person who has the ability to exert control over specific trustee decisions. Significant penalties can apply for non-compliance. These proposed rules were scheduled to apply to returns required to be filed for the 2021 and subsequent taxation years.
It should be noted that draft legislation for these proposals was released but has not been passed into law. Based on feedback received, many want to start the data collection process well before the 2021 T3 filing deadline and they have asked us whether we have any insight on when the CRA will provide details on what will be needed. We have asked the CRA whether they can release a draft version of the new T3 schedule that will have to be completed, or a list of the specific information that will be needed to complete the form. We are awaiting the CRA’s reply.
We will also follow up with the CRA on the status of T3 efiling as it was our understanding that it will be possible to efile most 2021 T3 returns which should make the filing of these returns and the additional required information easier.
Status of key announcements from the 2021 federal budget
When implementing changes announced in a federal budget, two bills are generally tabled in Parliament to enact the changes. Changes that require immediate enactment are generally included in the first bill, which is normally passed into law before Parliament adjourns for the summer (this year, it was Bill C-30, Budget Implementation Act, 2021, No. 1). The balance of the legislative changes is typically released as draft legislation during the summer and tabled in Parliament as a bill in the fall. However, legislation was not introduced for the remaining 2021 federal budget proposals before the election was called.
As there was not a change in the governing party, our expectation is that the government will follow through on their previous proposals and draft legislation will be released soon.
Some of the key proposals for which legislation has not been released include:
Income tax proposals:
- interest deductibility
- immediate expensing of capital expenditures
- rate reduction for zero-emission technology manufacturers
- CCA for clean energy equipment
- new mandatory disclosure requirements
- avoidance of tax debt rules
- hybrid mismatch arrangements
- electronic filing and certification of tax and information returns
- tax on selected luxury goods
- digital services tax
- tax on unproductive use of Canadian housing by foreign non-resident owners
We will continue to track developments on these changes and provide updates as warranted.
September 22, 2021