The 2025 Federal Budget introduced a proposal that could make tax season a little easier for some lower-income Canadians – automatic tax filing.
Under this plan, the Canada Revenue Agency (CRA) could automatically prepare and file a tax return for individuals who meet certain criteria. This would mainly apply to people with simple tax situations and low income, such as those whose income is entirely from sources like employment, CPP/OAS, or social assistance — where the CRA already receives all the necessary tax slips.
To qualify, an individual would generally need to:
- Have income below the basic personal amount (plus the age or disability amount, if applicable);
- Have all income reported to the CRA through tax slips;
- Have missed filing a return at least once in the past three years; and
- Not have filed their own return for the current year by the deadline or within 90 days after.
Before the CRA files a return on someone’s behalf, they would first send a draft version for review. The individual would have 90 days to confirm or make changes. If there’s no response, the CRA could go ahead and file the return automatically.
Once filed, the CRA would issue a Notice of Assessment and apply any benefits or credits the person qualifies for (such as GST/HST credits or the Canada Workers Benefit).
It’s important to note that this program would be optional — individuals could choose to opt out if they prefer to file their return themselves or through a tax professional.
If implemented, this change would start with the 2025 tax year and could help ensure more Canadians receive the benefits they’re entitled to, even if they don’t file their own returns.
Source: 2025 Federal Budget Tax Highlights – Chartered Professional Accountants of Canada