What Is Netfile?
Netfile is a government-provided service that allows Canadians to file their taxes online to the Canada Revenue Agency (CRA), rather than through the mail.
Canadians opting for Netfile use software approved by the CRA. Filers prepare their tax returns, and then upload them on the CRA's website. The CRA allows up to 20 filers to upload returns from a single computer.
Netfile does not allow filers to make changes to their personal information such as their name, address, date of birth, or direct deposit information through Netfile. Changes to personal information require either a traditional paper return or contact with the CRA.
After an individual files taxes, the CRA sends this person a notice of assessment via regular mail. However, if a person registers online, they receive this notice electronically.
The CRA also operated a service called ReFILE, which began in 2018. This service allows taxpayers to file an amended income tax and benefit return electronically. The service is only available to amend previously filed returns via Netfile.
Benefits of Netfile
Besides doing away with the need to file a paper return, Netfile offers several other benefits. In many cases, individual filers receive their tax refunds more quickly than with paper returns. Refunds typically make their way to filers' accounts in as little as eight business days if they choose direct deposit.
According to the CRA, using Netfile produces a more accurate return because the CRA does not re-key information submitted electronically, cutting down on the chance of errors. Netfile also doesn’t require filers to mail in receipts unless the CRA requests them later on. Also, the service provides immediate confirmation the CRA actually received a filer's return.
Ineligibility From Using Netfile
The CRA permits most Canadian taxpayers to use Netfile, with a few exceptions. Netfile is only available to residents of Canada, and only to those filing on behalf of themselves. For spousal and family returns, each individual must file separately. Individuals who declared bankruptcy in the current or previous year cannot use Netfile. There are other, less common exclusions for using Netfile. The full list is available on the government’s official website.