Tax software providers and CRA has created an end-to-end solution for tax professionals. No matter what tax returns you file, individual or corporation taxes, you can use the EFile system to transmit your client’s tax returns electronically. This EFile system can also be used by corporations responsible for filing multiple income tax returns. There is no limit to the number of filings you can do under one EFile number.
Having an EFILE number allows one to use of certain services. Other than filing tax returns, you can transmit authorizations, download data to fill tax returns, and generate a notice of assessment for client.
Eligibility for an EFile
Anyone that provides tax preparation services to people can apply for an EFile number. But there are certain screening criteria that you need to pass first. Here is what Canada Revenue Agency (CRA) has to say,
- The applicant can’t be convicted under the Income Tax Act or the Excise Tax Act
- Has no records of penalty under the Income Tax Act or the Excise Tax Act
- Has a clean record of filing their own personal taxes on time
- Has registered themselves under the Excise Tax Act
Other than these, there are many more criteria that you can look through on their website.
Applying for an EFile
The first step to applying for an EFile number is to fill out the online EFile registration form. This application process is a once-in-a-lifetime thing, but sometimes applicants might need to update information per changes in guidelines. But you need to renew this registration every tax year.
This application is largely designed to cater to tax preparer businesses that provide services for others. But individuals can also apply and get their own EFile numbers. But when the system/registration form asks for your “Name of proprietorship, partnership, or corporation,” individuals should provide their own names.
Further, any applicant or person who is managing the application on someone’s behalf must themselves be,
- Over 18 years of age
- Be a Canadian resident
- Have a Social Insurance Number (SIN)
Issuance of the EFile number and password
The EFile number and password are issued after you submit all the necessary information on the registration form. The CRA system then verifies the information you have provided, it runs a background check for authenticity and then issues the number. But if you fail to fill out mandatory details, the system will give you an update about it. You will then have to revisit the site and provide valid answers to these. Once the process is over, and the system has approved and validated your application, it will also provide you with the EFile number and password.
Although you can get a number and password right away for the first time, the services are activated only once the suitability criteria are passed.
What is the right time to apply?
Even if do provide all the correct details and information during the EFile registration, the verification process might take a very long time. This can last up to 30 business days to process. So if you want to prepare for taxes on time, you must file for the EFile number before the tax filing window closes. The CRA advises that if you want to get the work done in time, then you must register before December 31 to provide CRA enough time for verification.
You must be in CRA’s system as well! This is important for those who are returning to Canada as tax residents or newcomers to Canada. If you are a newcomer to Canada and trying to get EFILE Number, make sure you transmit your first tax return on the very first day as soon as the T1 e-filing open so that you do not have to wait for more than longer to start your business.
Once you have the EFile number and password, you can easily start your work as a tax preparer and help people, businesses, or corporations prepare and file their taxes.
