Of Canada’s 33 million tax filers, 6.1 million people file a nil return to receive access to over $3 billion in federal benefits. The tax return, in other words, is a “gateway” to receiving those benefits and is therefore among the most important financial documents of the year for low-income Canadians. But there is an obstacle: filing a tax return is complex, and that results in low uptake of important benefits.
In fact, it is estimated that 12% of working-age Canadians miss out on claiming close to $2 billion in tax benefits because they don’t file a tax return.
What is SimpleFile?
To help, over the last several years the CRA has been inviting tax filers to participate in its SimpleFile pilot project. The project has had minimal uptake so far: only 83,000 people (less than 1% of all tax filers) have used it in the period February 7, 2025, to October 5, 2025.
More recently, the CRA sent invitations to use the service in February, March, and the summer of 2025, either by mail or through MyAccount.
What’s new for 2026?
Starting in 2026, about a million people will have access to a pre-filled tax return in the CRA’s online filing system. This will scale up to 5.5 million people by 2028, according to a recent pre-budget announcement by the Prime Minister.
In addition, the CRA intends to add new information to its “Auto-fill My Return” services for people who do their own returns using certified commercial tax software.
The CRA plans to “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.
Unfortunately, however, using the system is anything but simple. It may in fact be a very stressful and frustrating exercise. Further, the government doesn’t yet have its act together on processing the information it receives.
Recall how inaccurate and late the Auto-fill My Return service was in the past filing year. SimpleFilers may find themselves waiting longer than they would like for a reliable picture of their income from the CRA, delaying their T1 filing. Worse, because the onus of proof remains on the tax filer, SimpleFilers risk incorrect assessments that have expensive consequences down the line.
However, the CRA believes its service should improve exponentially. The Finance Minister, after all, gave the agency 100 days to do so in early September this year. We’ll have to wait and see.
When is the SimpleFile service available?
This service has been available 21 hours a day between 6 a.m. and 3 a.m. (Eastern Time), seven days a week starting February 24, 2025.
Who qualifies for the SimpleFile service?
Income must be under a certain amount based on a variety of factors like age, province of residence, and disability status. In short, it’s a bit of a mystery.
Are there income limitations?
Yes—income can only be from certain sources:
Seniors:
Three public income sources and two specific slips:
- T4A(OAS) – Old Age Security and Guaranteed Income Supplement / Net federal supplements
- T4A(P) – Canada or Quebec Pension Plan benefits (retirement, survivor, and disability benefits)
Employees:
Four possible slips:
- T4 – Employment income
- T4E – Employment Insurance benefits
- T5007 – Workers’ Compensation and Social Assistance payments
- T4A – Retroactive Canada Emergency Benefits
Investors:
Users may have a T5 slip (but not a T3 slip) with some interest income, although 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 the CRA or if they make a mistake. The information entered will only be saved if the tax filer makes it through the entire process.
You must also have a filing history to answer questions to access the service.
Once the return is filed, it is possible to receive an estimate of net income, taxable income, and any refund. But there is a catch: to receive this information, the tax filer needs a PIN to confirm identity. To obtain one, they must apply through CRA’s MyAccount, which requires a computer and internet access.
This seems like a circle of doom for the people using the phone service—especially because they may not have a computer.
Nuances – Digital Filing
Taxpayers are sent a link to use the service. These filers must have a filing history with the CRA and answer questions about their last assessed tax return.
Note: this service is only for the federal return, covering all provinces and territories except Quebec. People in Quebec must still file a separate provincial return.
Nuances – Paper Filing
With paper filing, 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 filers who identify as Inuit, Métis, or First Nations must also meet these conditions:
- The tax filer was not bankrupt at any time in the year, and the return is not for a deceased taxpayer.
- There were no repayments required for discontinued Universal Child Care Benefit payments (UCCB) or overpayments of COVID-19 benefits (2020–2022).
- The tax filer was a resident of Canada throughout the tax year with taxable income of zero.
- If there was taxable income, it could not exceed the thresholds shown in the chart below.
What could go wrong?
Plenty. We have noted some of the limitations above. Most importantly, if information is not properly entered or there are errors or omissions specific to the tax filer’s situation, it can significantly affect much-needed benefits.
For example:
- Incorrect marital status or family net income can affect eligibility for the Canada Child Benefit and other refundable credits, or the Canada Dental Care Plan.
- An incorrect birthdate can affect access to the GST/HST credit, Old Age Security, or CPP benefits.
Then there is the postal strike affecting those who must paper file. The CRA notes that SimpleFile by Paper returns will take longer than usual to receive and process. The proposed workaround: filers are encouraged to use the SimpleFile Digital link. If they must use the paper version, they are instructed to go to the nearest CRA drop box.
In short, it’s not simple.
Bottom Line
Unfortunately, many of the Canadians the CRA hopes to help with SimpleFile may not have the means—or the ability—to navigate a complex digital tax system or even pay for a phone. The mail service, meanwhile, has been completely unreliable.
There is also huge potential for error. Like the pandemic support measures that now require repayments of benefits such as CERB, the proof will be in the post-assessment audit “pudding.” Will refunds or benefits sent in error be clawed back? Time will tell.
Preserving appeal routes is also critical. Tax filers will receive ongoing communications about their tax scenarios from the CRA, but they must know when, where, and how to pick up important information—such as their Notice of Assessment—in a digital world to preserve their rights to appeal. These timelines are strict.
Not simple. So it is likely best for people who rely on government benefits to supplement their cash flow to double-check with an experienced tax preparer or professional should SimpleFile go offside for them.
Evelyn Jacks is President of Knowledge Bureau, a national financial education institute. Check out tax and finance courses at learn.knowledgebureau.com and catch her podcast Real Tax News You Can Use.
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